Case: M/s Nagorao Auto Engineering Works v. Union of India & Ors.
High Court of Chhattisgarh, Bilaspur
WPT No. 129 of 2021
Category: Input Tax Credit – Transitional Credit (TRAN-1)
Date of Judgment: 02.12.2021
Relevant Sections: Section 140 of CGST Act, 2017; Rule 117 of CGST Rules, 2017
Facts (Paras 1–4)
The petitioner, a trader in two- and three-wheeler spare parts, was entitled to carry forward pre-GST input tax credit through filing of TRAN-1. The proprietor expired on 20.09.2017, just before the original deadline. The legal heir later attempted to file the TRAN-1 but due to technical glitches, repeated attempts failed. Despite extensions granted up to 31.03.2019, the portal did not allow submission. Representations were made but remained undecided, leading to filing of this writ petition seeking either portal opening or manual filing.
Questions before Court
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Whether the petitioner, who could not file TRAN-1 within time due to death of proprietor and portal glitches, could be denied transitional credit?
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Whether procedural lapses under Rule 117 override the substantive right to carry forward credit under Section 140 of CGST Act?
Observations (Paras 5–10)
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The State argued that without challenging Rule 117, the relief could not be granted and that no evidence of glitches was produced.
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The Court noted multiple High Courts (Kerala HC in Merchem India, P&H HC in Adfert Technologies, Gujarat HC in Siddharth Enterprises, Delhi HC in Blue Bird Pure and Aagman Services, Odisha HC in Sunny Motors, Allahabad HC in Ratek Pheon Friction Technologies) had consistently held that ITC is a vested right protected under Articles 14, 19(1)(g), 265 and 300A of the Constitution.
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Procedural time limits could not extinguish substantive credit rights. Technical glitches and transition difficulties were widely recognized across India.
Judgment (Paras 11–12)
The Court endorsed the view of other High Courts and emphasized that the petitioner’s inability arose from circumstances beyond control – death of the proprietor and technical glitches. It directed the respondents to permit filing of TRAN-1 either electronically (by reopening portal) or manually, and to process ITC claim within 60 days.
The writ petition was accordingly allowed.
Table of referred cases
| Case | Court | Citation | Verdict |
|---|---|---|---|
| Union of India v. Merchem India Pvt. Ltd. | Kerala HC | (2021) 67 TLD 420 | ITC is vested right; technical glitches cannot defeat substantive credit |
| Adfert Technologies Pvt. Ltd. v. UOI | P&H HC | (2020) 64 TLD 277 | Transitional credit is vested right; denial violates Arts. 14 & 300A |
| Siddharth Enterprises v. Nodal Officer | Gujarat HC | 2019 TIOL 2068 | Time-limit for TRAN-1 discriminatory; denial of credit violates Arts. 14, 19(1)(g), 300A |
| C.P. Marble v. UOI | P&H HC | (2021) 40 GSTJ | Repeated extensions prove technical glitches; denial of ITC arbitrary |
| Sunny Motors v. CBIC | Odisha HC | 2021 | Allowed filing of TRAN-1 manually; upheld by SC |
| Blue Bird Pure Pvt. Ltd. v. UOI | Delhi HC | 2019 SCC Online 9250 | Permitted manual filing of TRAN-1 |
| Aagman Services Pvt. Ltd. v. UOI | Delhi HC | W.P.(C) 1329/2019 | Allowed manual filing; SLP dismissed by SC |
| Ratek Pheon Friction Technologies Pvt. Ltd. v. Principal Commissioner | Allahabad HC | Writ Tax 477/2021 | Allowed filing of TRAN-1/2; strict timelines arbitrary |
Between Fine Lines
This judgment reassures businesses that transitional ITC cannot be denied merely due to portal glitches or unavoidable hardships like death of the proprietor. Courts recognize ITC as a property right, and procedural deadlines cannot nullify it. Businesses facing similar issues can seek relief for manual or re-opened filing of TRAN-1/2.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
