The honourable Rajasthan High Court in the case of Pacific Industries Ltd. Versus Union Of India has allowed the Input Tax Credit (ITC) under GST in GSTR-3B Return as FORM GST ITC-02A was not available on the GSTN Portal at the time of its insertion.

Rule 41A prescribes the transfer of an unutilised input tax credit lying in the Electronic Credit Ledger of a registered unit to the newly registered of an assessee within the same state as per Section 25(2) of the CGST Act. In order to give effect to this mode of filing ITC credit, Form GST ITC-02A was prescribed, which was to be submitted on the GSTN Portal within a month of obtaining the new registration as per Section 25(2) of the CGST Act so that the unutilised input tax credit could be transferred from the previously registered unit to the newly registered unit of the assessee.

The petitioner submitted that the Form GST ITC-02A was not available on the GSTN Portal for the entire period of 30 days from the registration of its separate business verticals and even till the date of filing of the instant writ petition, as a consequence of which the petitioner was denied the opportunity to transfer the unutilized input tax credit to its new registration, which became effective on 16.04.2019. The petitioner claims to have uploaded a manual copy and submitted it to the Deputy Commissioner, but it was not accepted.

The court observed that the department failed to acknowledge and transfer the input tax credit to the tune of Rs. 2,58,03,590 accruing to the petitioner pursuant to the registration of its new business unit in accordance with Rule 41A of the GST Rules. The action of the department was grossly illegal, arbitrary and unjust.

The respondents are directed to regularise the input tax credit in favour of the petitioner as per entitlement. The petitioner shall be allowed to avail the Input Tax Credit of Rs.2,58,03,590/- through the next GSTR-3B return,”


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