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2020 ] “TRAN-1” CREDIT AVAILMENT UNDER GST AND ITS DEVELOPMENTS J55
• The above mentioned amendment took place after the judgment de-
livered in the case of Brand Equity Treaties Limited and Others v. Un-
ion of India.
• Further, mere making an amendment in the section to empower the
rule making authority to fix the timeline within which TRAN-1
could be filed, cannot take away the vested right or concession of
the assessee altogether.
• It was because of the system glitches that the assessees were not
able to file TRAN-1 which prompted them to approach the High
Courts for remedial action.
• Those who could not file TRAN-1 because of the technical difficul-
ties have been given the benefit of filing TRAN-1 on proof of their
showing evidence that they attempted to file the TRAN-1 but could
not do so.
• The after effect of the amendment is time tested and the results need
to be awaited and seen in the forthcoming days.
• As per the settled legal principles, Parliament is empowered to
make the retrospective amendment with respect to provisions bene-
ficial to the taxpayers. No retrospective amendment can be made
which ”restricts the rights” of the taxpayers.
4. SKH Sheet Metals Components v. Union of India [2020 (38) G.S.T.L. 592 (Del.)]
• In the order of SKH Sheet Metals the Delhi High Court has held that
judgment in Brand Equity will continue to apply in spite of retro-
spective amendment to Section 140 by The Finance (Amendment) Act,
2020.
• It was observed that the restriction that prevented the Petitioner
from taking the entire credit by revising the return, based on the
footing of a “human error” and not “technical difficulty on common
portal” is wholly unreasonable, being irrational and arbitrary and
therefore, violative of Article 14 of the Constitution of India.
• The Court noted their earlier order in Brand Equity case to the effect
that - “Petitioner is permitted to revise TRAN-1 Form on or before
30-6-2020 and transition the entire ITC, subject to verification by the
Respondents. We issue a writ mandamus to the respondents to either
open the online portal so as to enable the petitioner to file revised
declaration TRAN-1 electronically, or to accept the same manually.
Respondents shall thereafter process the claims in accordance with
law”.
• The Court further maintained that the said judgment should be con-
strued to apply also to those assessees who were not before the
Court and, thus, protecting their rights also. Therefore, all those
assessees who have so far not filed TRAN-1 irrespective of whether
they had filed the Writ Petitions or not should file the same manual-
ly by 30-6-2020.
• The Court held that the time-limit prescribed for claiming transition
credits under Rule 117 is only directory and not mandatory despite
the retrospective amendment to Section 140 since the consequences
of non-compliance is not indicated in the Act and Rules.
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