GST: Benefit of Input Tax Credit can’t be denied for entering the details in Wrong Column: Madras High Court

09-Mar-2021 Admin 3 Input Tax Credit, ITC, Value Added Tax, VAT, GST TRAN-1, GSTN, CGST, SGST 598 Views

The Madras High Court held that the benefit of Input Tax Credit (ITC) cannot be denied for having entered the details in the wrong column.

The petitioner, M/s.Ram Auto is a dealer in two-wheelers. He was an assessee registered under Tamil Nadu Value Added Tax Act, 2006. The petitioner was having input tax credit to the tune of Rs.4,85,684/-. Following the introduction of the GST regime, transition and migrations from the earlier system had to be made. The petitioner like any other dealer was required to file the necessary GST TRAN-1.

While filing the said Form, instead of entering the details under column 7(a), the petitioner erroneously entered the details against column 7(d). The column 7(d) would apply only in cases of stock of goods not supported by invoices/documents evidencing payment of tax.

In the case on hand, the petitioner was very much having the necessary invoices/documents evidencing payment of tax. Since the petitioner did not correctly enter the details, the petitioner was not given the consequential credit under the new GST regime.

The petitioner submitted a request wherein it pointed out that the mistake committed by them was purely inadvertent. As a result, the petitioner was not able to adjust the claimed credit amount against their present liability.

In order to enable the jurisdictional Assistant Commissioner to take up the follow-up actions, necessary details were furnished by the petitioner to the jurisdictional Superintendent of Central GST and Central Excise. The details furnished by the petitioner were duly verified and vide communication, the jurisdictional Assistant Commissioner gave a finding that taxpayer’s request was genuine and that the mistake committed by them was unintentional and recommended their case to GSTN for consideration. Even after such a positive recommendation was given by the jurisdictional Assistant Commissioner nothing further took place. Therefore, the petitioner reiterated their request vide letter. In response thereto, the impugned communication came to be issued.

The jurisdictional Commissioner/first respondent informed the petitioner that it is not possible for them to consider the petitioner’s request in the absence of any specific Court order.

The single bench of Justice G.R.Swaminathan noted that the petitioner had filed FORM GST TRAN-1 in time and he is being denied the benefit of input tax credit for having entered the details in the wrong column.

The court while allowing the petition said that respondent is directed to forward the petitioner’s application to the respondent forthwith and without any delay. Then respondent will verify the correctness of the averments set out in communication of the jurisdictional Assistant Commissioner to the Commissioner of Central Taxes & Central Excise, Madurai. Upon the respondent being satisfied with the correctness of the same, the third respondent will grant the relief as sought for by the writ petitioner. The entire exercise shall be concluded within a period of twelve weeks.

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