Section 140 of the CGST Act, 2017— Transitional Credit –- The petitioner challenged the letter dated 31st March, 2021 issued by the Commissioner, C.G.S.T. to the extent it has disallowed Transitional Credit of Rs.1,74,469/- as being without jurisdiction. The counsel for the petitioner referred to Section 140(5) and submitted that there is no availment of Transitional Credit before payment of service tax. Filing of TRAN-1 before payment of tax when there has been no availment of Input Tax Credit is only a technical defect. The court observed that the observations made by the Commissioner CGST in his letter/order dated 31st March, 2021 towards disallowance of Transitional Credit is only incidental to the main subject of condonation of delay, considered by him in respect of entries in the books of account to be made up to the extended period of 30 days beyond 1st July, 2017. In the absence of any proceeding contemplated under relevant provisions, the observations relating to disallowance of remaining amount of Transitional Cenvat Credit against tax paid on 12th August, 2017 was uncalled for. This could not prejudice the case of the petitioner in case a fresh proceeding is initiated on that ground. The petitioner would have his remedies in case such a proceeding is initiated in accordance with law.

Held that:- The Hon’ble High Court disposed the petition accordingly.