Supreme Court Stays Delhi HC Judgment Directing Dept
to Open GST TRAN-1 Till 30th June 2020
The Supreme Court of India on 19 June 2020 stayed Delhi High
Court Judgment directing GST Department to open the facility to file GST Tran-1
till 30th June 2020.
Transition Form of TRAN-1 is filed by those taxpayers who
are eligible to claim the credit on the tax already paid in the pre-GST regime.
In order to claim the complete amount as a credit, TRAN-1 is to be filed along with
the particulars of stock carried forward.
The above ruling of the Delhi High Court and various other
High Courts have held already held that the provision in the GST Act, prescribing
a time limit to file TRAN-1 is ultra vires to the Constitution. The Courts were
of the view that transitory credit is a vested right and any time limit cannot be
fixed to avail that right. The Government, in order to override the effects of these
judgments, introduced
The Central Government amended section 140 of the CGST Act,
2017, through Finance Act, 2020 with retrospective effect from 1st July 2017 and
provided that transitory credit taken after due date will be disallowed.
A two-judge bench of the Delhi High Court had directed the
Central Government to allow the taxpayers to claim an input tax credit under Form
GST TRAN-1 till 30th June 2020 since the statutory time limit for the same is a
directory and therefore, the period of limitation of 3 years under the Limitation
Act would apply. Last month, the Central Board of Indirect Taxes and Customs (CBIC),
notified the above provision in the Finance Act which in effect, nullified the effect
of the judgment.
“The judgment was a great relief to all those who could not
file TRAN-1 and claim the input tax credit as the direction would apply in rem,”
said Advocate Ruchir Bhatia, the counsel appeared for
one of the petitioners.