GST Department to allow all assessees to claim ITC in TRAN-1 by 30.6.2020

GST Department to allow all assessees to claim ITC in TRAN-1 by 30.6.2020 In a landmark judgment today, the Hon’ble Delhi High Court has held that period of 90 days for claiming input tax credit in TRAN-1 is directory and therefore, period of limitation of 3 years under the Limitation Act would apply. The Court has directed the Department to allow all assessees to claim input tax credit in TRAN-1 by 30.6.2020. The direction would apply in rem to all those who could not file TRAN-1 and claim input tax credit.

Main submissions on behalf of Petitioner were:-

1. Input tax credit is property and the same cannot be deprived without the Authority of law in terms of Article 300A of the Constitution. There is no substantive provision in the GST Act to deprive the claim on the basis of period of making the claim. 2. Limitation period is provided under the Rules and not the Act and no penal consequences have been provided. Therefore, the period under the Rules is directory and not mandatory. 3. Judgment of P&H HC in Adfret was relied wherein it was held that unutilized credit is vested right which cannot be taken away on procedural/technical grounds. 4. In the absence of period of limitation being provided under the Statute, the general period of limitation of 3 years should be held to apply for making a claim. Read Order Tags: Judgement, GST, High Court