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Right to transit ITC cant be taken away: Siddharth Enterprises vs Nodal Officer


Brief Analysis of Writ Petition filed under Article 226 of the Constitution before High Court of Gujarat at Ahmedabad in case of Siddharth Enterprises vs Nodal Officer.

Purpose of Writ:

a. To allow filing of declaration in form GST Tran-1 and GST Tran-2, to enable it to claim transitional credit

b. Filing of declaration of TRANS-1 and 2 is procedural and not a mandatory provision

Plea by Writ Applicants:

1.CGST Act, 2017, allowed the carry forward of the CENVAT credit on the duty paid stock on the appointed day, i.e. 1st July2017

2. The credit was allowed because the intention of the Government was not to collect tax twice on the same goods

3. TRANS-1 could not be filed due to Techncial Glitches

4. Without giving any opportunity of hearing to his clients, the office of the Nodal Officer reached to the conclusion that the writ-applicants had neither tried for saving/submitting or filing the form GST TRAN- 1 as per the GST System Logs.

5. Learned counsel submitted that this could be termed as violative of the principles of natural justice.

Submission by Respondents

1. Jurisdictional Officer, Bharuch, did bring to the notice of the Nodal Officer about the various problems and difficulties faced by the tax payers

2. Nodal Officer had acted promptly and had also forwarded the grievances of the tax payers to the GSTM & GSTN.

3. Submission of various Articles from websites such as business standard, financial express are secondary evidences.

4. the petitioner has not joined GSTN nor the I.T. Grievance Redressal Committee as party respondent and therefore, the petitioner suffices of lack of non-joinder/misjoinder of parties.”


(1) Section 140(3) of the CGST Act provides for a substantive right which cannot be curtailed or defeated on account of the procedural lapses- Madras High Court, in the case of Tara Exports v. Union of India, reported in 2019 (20) G.S.T.L. 321 (Madras), The Supreme Court, in the case of Commissioner of Central Excise, Madras v. Home Ashok Leyland Ltd., reported in 2007 (210) E.L.T. 178 (S.C.), The Madras High Court, in the case of Hospira Health Care India P. Ltd. v. Development Commissioner, MEPZ, SEZ &Heous, Chennai, reported in 2016 (340) ELT 668 (Madras), Allahabad High Court, in the case of Global Sugar Ltd. v. Commissioner of Central Excise, Kanpur, reported in 2016 (334) E.L.T. 604 (Allahabad), Commissioner of Central Excise, Allahabad vs. Hindalco Industries Pvt. Ltd, 2013 (293)ELT 208, Supreme Court, in the case of Sambhaji and Others v. Gangabai and Others, reported in (2008) 17 SCC 117 

(2) The entitlement of the credit of carry forward of the eligible duties is a vested right- Gujarat High Court, in the case of Filco Trade Centre Pvt.Ltd.v.Union of India, reported in 2018 (17) G.S.T.L. 3 (Gujarat), Eicher Motors Ltd. v. Union of India, reported in 1999 (106) E.L.T. 3 (S.C.), Supreme Court, in the case of Collector of Central Excise, Punev. DalIchi Karkaria Ltd.,reported in1999(112) E.L.T. 353 (S.C.)

(3) The rights accrued under the existing law have been saved by the CGST ActPara 27. The Objects and Reasons of the Constitution 122nd Amendment Bill, 2014 clearly set out that it is intended to remove the cascading effect of taxes and to bring out a nationwide taxation system

(4) The right to carry forward the CENVAT credit is a constitutional right.

(5) It is arbitrary, irrational and unreasonable to discriminate in terms of the time limit to allow the availment of the input tax credit with respect to the purchase of the goods and services made in the pre-GST regime and post-GST regime and the same could be termed as violative of Article 14 of the Constitution of India (Para 33)- Supreme Court, in the case of Ajay Hasia and Ors. v. Khalid MujibSehravardi and Ors., reported in AIR 1981 SC 487, Courtin International Airport Authority’s case ( (1979) 3 SCR 1014) at p. 1042: (AIR 1979 SC 1628) (supra) of the Report

(6) The doctrine of legitimate expectation also could be said to be violatedSupreme Court, in the case of MRF Ltd. v. Assistant Commissioner(Assessment) Sales Tax, reported in 2006(206) E.L.T. 6 (S.C.), Gujarat High Court in Bannari Amman Sugars Ltd. v. Commercial Tax Officer, 2005 (1) SCC 625

(7) By not allowing the right to carry forward the CENVAT credit for not being able to file the form GST TRAN-1 within the due date would definitely have a serious impact on the working capital of the writ-applicants and such action could be termed as violative of Article 19(1)(g) of the Constitution of India- Para 38. Gujarat High Court, in the case of Indsur Global Ltd. v. Union of India, reported in 2014 (310) E.L.T. 833 (Gujarat) 

(8) The liability to pay GST on sale of stock carried forward from the previous tax regime without corresponding input tax credit would lead to double taxation on the same subject matter.

(9) The action could be also termed as violative of Article 300A of the Constitution of India- CENVAT credit earned under the erstwhile Central Excise Law is the property of the writ-applicants and it cannot be appropriated for merely failing to file a declaration in the absence ofLaw inthis respect.

Final Crux

Due date contemplated under Rule 117 of the CGST Rules for the purposes of claiming transitional credit is procedural in nature and thus should not be construed as a mandatory provision- Para 43

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