2026-VIL-315-GSTAT-KOL
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  2. 2026-VIL-315-GSTAT-KOL

SGST Tribunal

GST - Transitional credit under Section 140(3) of the CGST Act, 2017 - Entry of credit in Table 5(a) instead of Table 7(a) of Form GST TRAN-1 - Respondent availed transitional credit on stock held on the appointed day under Table 5(a), which is meant for credit carried forward under Section 140(1) - Adjudicating Authority confirmed the demand under Section 73 on the sole ground of entry under the wrong head, also holding that earlier judgments were inapplicable after the Board Circular permitting revised TRAN-1 - FAA allowed the appeal and Revenue challenged the same - Whether transitional credit can be denied merely because it was entered in the wrong table of TRAN-1 - HELD - Registered persons claiming credit under Section 140(1) enter details in Table 5(a), while those claiming under Section 140(3) enter them in Table 7(a). Several High Courts have viewed filing a credit claim in a wrong head or table as an inadvertent error or a procedural lapse which should not impede the right to claim transitional credit if the person is otherwise eligible - The reasoning of the Adjudicating Authority that earlier judgments stood displaced by the Circular is surprising, as these judgments not only permit filing of a corrected TRAN-1 but also reiterate the cardinal principle that procedural lapses cannot impair substantive rights. The notice and the order-in-original were silent on any inability of the Respondent to fulfil the conditions of Section 140(3) and were based solely on entry in the wrong column - The credit cannot be denied on the ground of entry in the wrong table - The impugned order is upheld and the Revenue appeal is dismissed - Ground of ineligibility under Section 140(3) not taken in the SCN and raised first in appeal - Raising a ground of non-fulfilment of conditions under Section 140(3) for the first time before the Tribunal when the SCN and the order-in-original were based only on entry in the wrong table - Revenue contended that the Respondent had not produced documentary evidence of eligibility except hard copies of invoices - Whether the Revenue can raise such a ground at the appellate stage - HELD - The Respondent had offered to produce the prescribed documents and registers, but the Adjudicating Authority did not scrutinise them or call for additional records, and never undertook an enquiry under Rule 121 despite being empowered. The ground of eligibility under Section 140(3) having been omitted in the order-in-original, it is deemed to have been constructively held not to be a ground for disallowing the credit. The Revenue cannot take such an inconsistent stand in appeal, which amounts to approbating and reprobating on the same issue - The contention of the Revenue is not sustainable and rejected - Duty of the FAA to make further enquiry under Section 107(11) - Whether the FAA was obliged to verify the entitlement of the Respondent to transitional credit under Section 140(3) and whether failure to do so renders the order invalid - HELD - The expression "as may be necessary" in Section 107(11) shows that the appellate authority is not required to undertake an enquiry in every appeal as a matter of routine, the sub-section conferring a discretionary power to be exercised when the facts of the case demand. No infirmity is found in the reasoning of the FAA - The contention of the Revenue has no merit, the impugned order-in-appeal is upheld and the appeal of the Revenue is rejected.
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