2026-VIL-248-GUJ
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SGST High Court Cases

GST - Transfer of Unutilized Input Tax Credit on Amalgamation, Validity of endorsement on statutory Form - Sections 18(3) of CGST Act, 2017 and Rule 41 of CGST Rules, 2017 - Petitioner company got amalgamated with another company and sought to transfer the unutilised ITC of the transferor company to itself – Denial of transfer of ITC on the ground that both the entities are not of the same State / Union Territory - Whether the transfer of ITC can be allowed even if the transferee and transferor companies are located in different States – HELD - The transfer of the ITC on amalgamation of the company is permissible as per the provision of Section 18(3) of the CGST Act read with Rule 41 of the CGST Rules. Neither of the provision prohibits or debars transfer of the ITC on the ground that the transferee and the transferor company are located in different States - In the statutory Form ITC-02, the respondent has made an endorsement denying the transfer of ITC on the ground that both the companies / entities should be of the same State / Union Territory, without referring to any provisions. The reasons assigned in the statutory Form should be separate, clearly demarcating the opinion of the Department and shall not be embossed on the statutory form which has been done in the present case. The statutory ITC form which is issued under Rule 41 of the CGST Rules does not contain any such column of specifying or recording of the opinion of the concerned officer assigning his/her reason for not accepting the statutory Form - The Dept cannot incorporate something in a statutory form ITC-02 which is absent in the statutory provisions - Neither the statute permits nor debars the transfer of ITC after the scheme of amalgamation has been approved by the NCLT. Such an action of restricting the transfer of ITC on the online GST portal is de hors the intention of the provision of Section 18(3) of the CGST Act read with Rule 41 of the CGST Rules - The respondents to allow the petitioner to manually file the Form ITC-02 and process the same, as the GST portal does not have the mechanism to deal with such inter-State transfer of ITC on amalgamation - The writ petition is allowed
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