Case Summary: W.P.(C) 13075/2023, Delhi High Court, decided on 01.03.2024
Category: Refund / Transitional Migration Error
Relevant Provisions: Sections 54 & 164 of the CGST Act, 2017; Rule 92 of the CGST Rules, 2017; GST Migration Framework under transitional provisions.
Facts of the Case (Paras 1–7)
The petitioner, BCC Developers and Promoters Pvt. Ltd., held both VAT and Service Tax registrations prior to GST. When GST migration commenced, only one registration could be migrated, and the petitioner chose to migrate its VAT registration, which resulted in a valid GSTIN: 07AAACB0226C2ZI.
Unbeknownst to the petitioner, the GSTN system automatically migrated the service tax registration also, generating a second GSTIN (termed “non-migrated GST number”). The petitioner had no knowledge of this number and continued using only the valid migrated GSTIN.
The petitioner later discovered that ₹16,19,838 was lying as balance/credit under the unintended GSTIN when a client reported depositing tax against that number. A GST portal search confirmed this.
The petitioner therefore sought (i) refund of the said amount, or (ii) transfer of the amount into its valid GST registration.
Questions / Issues
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Whether GST credit lying in an automatically created, unintended GSTIN (non-migrated GST number) can be transferred to the petitioner’s valid migrated GSTIN?
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Whether the absence of a GST portal mechanism to transfer such credit defeats the petitioner’s substantive right to refund/adjustment?
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Whether the Court can direct the Department and CBIC to rectify system-generated duplicate GSTINs and ensure administrative consistency?
Court’s Observations (Paras 8–12)
The Court noted that the department conceded there is no statutory or portal-level facility to transfer credit between two GSTINs belonging to the same legal person. However, it also accepted that the petitioner never opted for migration of the service tax registration, and that the second GSTIN was created automatically by the system, constituting a technical error.
Given this peculiar factual situation, the Court held that the petitioner cannot be deprived of its legitimate credit merely because of a system-generated irregularity. The absence of a portal mechanism cannot frustrate a taxpayer’s substantive entitlement.
The Court further directed the CBIC to examine and rectify the broader issue of “non-migrated GST numbers” that continue to remain active, and complete the exercise within four weeks, with a compliance listing date fixed as 08.04.2024.
Judgment / Final Directions (Paras 9–14)
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The Court directed that ₹16,19,838 standing to the credit of the non-migrated GST number be transferred to the petitioner’s valid migrated GSTIN.
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CBIC was directed to identify and cancel all such system-generated non-migrated GST numbers, and take corrective steps.
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Matter listed for reporting compliance.
Classification of the Case under GST Act, 2017
✔ Refund arising from transitional migration errors / portal-generated duplicate GSTINs
✔ Procedural & System-related compliance issue
✔ Credit Adjustment between GSTINs of the same PAN
Summary of Cases Referred (Tabular Form)
The Court did not cite any precedent cases in this judgment.
Accordingly, the table is presented as “Not Applicable”.
| Sr. No. | Case Name | Citation | Issue | Verdict |
|---|---|---|---|---|
| 1 | None cited in the judgment | — | — | — |
Between Fine Lines (Industry Takeaways)
Businesses that held multiple legacy registrations (VAT, Service Tax, etc.) during GST rollout may still face auto-generated duplicate GSTINs created by the system without their knowledge. If tax or credit is inadvertently deposited in such unintended registrations, the absence of a portal facility cannot extinguish the taxpayer’s right to such credit. Courts will protect substantive entitlements and may order direct transfer of credit, while also directing CBIC to correct systemic flaws.
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