2026-VIL-290-GSTAT-TVP
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SGST Tribunal

GST - Transitional credit under Section 140 of the CGST Act, 2017 - Credit claimed in TRAN-1 as balance carried forward from the last return under the existing law - Appellant claimed credit in TRAN-1 as a balance of VAT credit carried forward, while the return filed under the existing law for the last month showed the balance of tax at credit as nil - Whether credit claimed in TRAN-1 as a carried forward balance is admissible when the last return under the existing law showed no balance - HELD - The return for the last month under the existing law showed the balance of tax at credit as nil, so the Appellant had no credit at hand as on the appointed date to claim in TRAN-1. The contention of the Respondent was therefore correct - The claim is rightly rejected and the appeal is dismissed to that extent - Transitional credit on VAT paid on capital goods purchased before the appointed date - Non-filing of the application for credit within thirty days under the existing law - Appellant purchased a truck chassis with engine before the appointed date for body building, and declared the purchase as eligible for credit in the return for the last month under the existing law. The credit claimed in TRAN-1 was rejected because it was not reflected in the relevant part of the return and the application in the prescribed form was not filed within thirty days - Whether the Appellant is eligible for transitional credit under Section 140 on the VAT paid on the truck purchased before the appointed date and put to use after it, though the credit was not reflected in the returns - HELD - The Appellant had declared the purchase in the return as a local purchase eligible for credit. The truck, being a goods vehicle, could be put to use only after the body building was completed, by which time the GST regime had been introduced and the only method prescribed for availing the credit was TRAN-1. No other condition is attached to TRAN-1 under Section 140 - The High Court in PK Joseph Vs Commercial Tax Officer has held that the thirty days run from the date on which the capital goods are put to commercial use and not from the date of purchase, so failure to obtain sanction before the appointed date cannot be equated with absence of substantive entitlement – Further, during the initial period of GST implementation there were many hurdles, and procedural infractions are to be viewed with a judicial eye. The Appellant was made a victim of procedure although it was eligible for credit under both regimes - The order of the FAA is quashed and set aside, and the appeal is allowed
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