In Union of India v. Merchem India Pvt. Ltd. [WA No. 570/ 2021 decided on July 5, 2021] Merchem India Pvt. Ltd (“the Petitioner”) attempted to file TRAN-1 Form on September 26, 2017 multiple times but the Petitioner received communication ‘processed with error’. Thereafter, the Petitioner filed a complaint with GST Helpdesk but no response was received.
The Hon’ble Kerala High Court held that unutilized ITC of erstwhile regime can be denied from being credited to the electronic ledger only under the contingencies mentioned in proviso to Section 140(1) of the Central Goods and Service Tax Act, 2017 (“CGST Act”). Further, stated that the statutory right cannot be defeated by any procedural rules under the GST regime.
Furthermore, observed that CGST Law does not provide for any provision for lapsing unutilized ITC for non-filing of TRAN-1.
Noted that the computer literacy has not reached its pinnacle in our country therefore technical glitches at the transition stage to GST should not affect the statutory rights. Attempt must always be made not to deprive a taxpayer from a bona fide claim, through technicalities.
Concurred with Punjab and Haryana High Court’s judgement in the case of Adfert Technologies Pvt. Ltd v. Union of India and others [2019 SCC Online P&H 5701] and upheld Single-Judge’s direction to consider ITC transition request.
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