2026-VIL-46-GSTAT-THN
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  2. 2026-VIL-46-GSTAT-THN

SGST Tribunal

GST – Jurisdiction of Tribunal to examine transitioned ITC - Proceedings under pre-GST regime versus GST regime - Appellant transitioned ITC balance by filing Form GST TRAN-1 under Section 140 of CGST Act including credits of CENVAT credit of eligible duties and VAT credit on stock-in-trade goods. Department issued Notice disputing the transitioned ITC alleging non-production of relevant evidence to substantiate eligibility under GST law - Appellant contended that credits were never disputed under erstwhile regime and cannot be questioned under CGST regime - Whether CGST authorities can initiate proceedings under Section 74 of CGST Act to question admissibility of ITC transitioned from pre-GST regime when such credits were never challenged under erstwhile law - HELD - Section 142(6)(a) and Section 174(2)(e) of CGST Act make it clear that recovery proceedings related to inadmissible credit under erstwhile laws can be initiated only under provisions of erstwhile laws even after enactment of CGST Act. The CGST authorities are not empowered to initiate proceedings under CGST Act for determining correctness of credits availed and transitioned from erstwhile regime - Following the ratio of High Court of Jharkhand in Usha Martin Ltd and in Steel Authority of India Ltd cases, the proceedings initiated by respondents to deny transitioned ITC on ground that such credits were inadmissible under erstwhile laws are beyond jurisdictional powers vested under CGST Act - An Appellant under Section 140(1) is entitled to carry forward CENVAT credit of eligible duties reflected in returns preceding 01.07.2017 subject to conditions specified. Since credit was never disputed or challenged under erstwhile regime, same cannot be questioned under CGST Act. Examination of correctness and eligibility of credit availed under erstwhile law under guise of powers under Section 140 is without authority of law - Reliance of the revenue on Section 174 of the CGST Act is also of no avail inasmuch as it only authorizes continuation of the proceedings initiated under the erstwhile law. However, it doesn’t authorize the officers appointed under the CGST Act to examine correctness of ITC availed by the appellant under the erstwhile regime - The ITC transitioned by the appellant is in accordance with law and same is held to be eligible. The impugned order is set aside and the appeal is allowed - Transition of Krishi Kalyan Cess (KKC) – HELD - The Appellant had transitioned the same into the GST regime by filing Form GST TRAN-1. However, due to lack of clarity regarding the availability of ITC in respect of KKC, the Appellant, out of abundant caution, reversed the amount under protest – As per the ratio of Godrej & Boyce Mfg Co Ltd judgment, transitional credit of Krishi Kalyan Cess is in order. Merely because the revenue is before the Hon’ble Supreme Court that cannot be sole reason to hold our decision, particularly when the Apex Court has not granted the stay from the operation of the Bombay High Court judgment. Moreover, the view on the issue of transition of KKC is not only based on the judgment in the case of Godrej & Boyce but also on our independent interpretation of the provision and Board’s Circular dated 02.01.2019. The transition of Krishi Kalyan Cess by the Appellant is in order - Transitioned VAT Credit under Section 140(6) – HELD - With respect to VAT credit transitioned into the GST regime, the Appellant had provided all the details required to claim VAT credit on Stock-in-Trade goods lying in stock as on 30.06.2017. There is no finding to the contrary to deny this amount of transitioned credit. Without giving any specific objection for denial of this credit, the lower authorities have rejected this credit considering it to be part and parcel of the other credits. Thus, in the absence of contrary findings, denial of this credit cannot be countenanced. Moreover, the revenue has not brought any material evidence on record to justify denial of VAT credit and consequent transition thereof to GST regime – Further, certain other reasons given to deny transitional credit such as incorrect address on the invoice, description of service not mentioned, copies of invoice or credit register not produced, etc are not sustainable at this stage especially when at the stage of claiming credit such objections were not raised.
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