Genuine mistakes in filling up the correct details of credit in TRAN-1 Form should not preclude taxpayers from having claims examined by the authorities

The Delhi High Court has ruled that genuine errors made when filling in details on the GST TRAN-1 form should not prevent taxpayers from having their input tax credit (ITC) claims examined. The court considered a case where a company made mistakes in its TRAN-1 filing but argued these were unintentional. The judgement suggests that the tax authorities should not automatically reject claims due to minor inaccuracies if the taxpayer can demonstrate a genuine mistake.

IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 21st December, 2020
Pronounced on: 27th May, 2021

W.P.(C) 4143/2020
R.R. DISTRIBUTORS PVT. LTD. ….Petitioner

Through: Mr. Rajesh Jain with Mr. Virag
Tiwari, Mr. Deepak Gupta and
Mr. Ramashish, Advocates.

versus

COMMISSIONER OF CENTRAL TAX,
GST, DELHI NORTH & ANR. …..Respondents
Through: Mr. Avnish Singh, Advocate
for Respondent No.2/UOI.

CORAM:
HON’BLE MR. JUSTICE MANMOHAN
HON’BLE MR. JUSTICE SANJEEV NARULA

J U D G M E N T

[VIA VIDEO CONFERENCING]

SANJEEV NARULA, J.

CM APPL. 14908/2020 (for exemption)

1. Exemption allowed, subject to just exceptions.

2. The application is disposed of.

W.P.(C) 4143/2020
3. The present petition was heard on 21st December, 2020 along with other batch matters relating to difficulties faced by taxpayers in filing form GST TRAN-1 (hereinafter “TRAN-1 Form”). However, considering that the issue involved in the present petition is slightly different as compared to the other batch matters, it is being decided separately by way of this judgment.

4. The Petitioner- R.R. Distributors Private Limited, is engaged in the trading of paper and other like goods. It migrated from the Delhi Value Added Tax Act, 2004 into the GST regime, and as on the appointed date under the GST laws, it had a closing stock of finished goods of Rs. 7,44,41,433/- on which it was entitled to claim transitional input tax credit (hereinafter “ITC”) in terms of Section 140(3) of the CGST Act, 2017 (hereinafter “the Act”). Accordingly, on 22nd November 2017, the petitioner filed the statutory TRAN-1 Form for transitioning ITC of Value Added Tax (hereinafter “VAT”) of Rs. 23,57,203/- under the DGST Act, 2017. On 27th December 2017, an additional claim of State tax of Rs. 59,433/- was made and transitional ITC of Rs. 52,166/- was claimed under the Act. For claiming the ITC on the stock of Rs. 7,44,41,433/-, Petitioner filed TRAN-2 Form for which no date had been specified under Rule 117(4)(b)(iii) of the CGST Rules, 2017 (hereinafter “the Rules”). On 4th January 2018, the Petitioner attempted to file the TRAN-2 Form for availing the transitional credit amounting to Rs. 17,35,293/- on the above stock under the proviso to Section 140(3) of the Act read with Rule 117(4) of the Rules. However, it was not allowed on account of the following reasoning:

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