Case Note & Summary
The petitioner, M/s. Lekar Pharma Limited, filed a writ petition challenging an Order-in-Original dated 27 February 2023 passed by the Joint Commissioner Central GST & C.Ex. The main issue raised in the petition pertained to transition credit under Section 140(7) of the Central Goods & Services Tax Act, 2017. During the pendency of the petition, the Finance (No.2) Act, 2024 was enacted, which amended Section 140(7) with retrospective effect, thereby addressing the core issue. The court noted that the impugned order was appealable, but no appeal was filed possibly due to the transition credit issue. Since that issue now stood resolved by the retrospective amendment, the court found no reason to entertain the writ petition and relegated the petitioner to the appellate remedy. The court directed that if the petitioner files an appeal within four weeks from the date of the order, the Appellate Authority shall consider it on merits without going into the question of limitation, as the petitioner was bona fide prosecuting the writ petition since 23 June 2023. The Appellate Authority was also directed to take into consideration the effect of the Finance (No.2) Act, 2024 while deciding the appeal. All contentions of all parties were left open. The petition was disposed of without any order as to costs.
Headnote
A) Goods and Services Tax - Transition Credit - Section 140(7) of CGST Act, 2017 - Retrospective Amendment - The main issue regarding transition credit under Section 140(7) was addressed by the Finance (No.2) Act, 2024 which amended the provision with retrospective effect. Consequently, the court held that the petitioner should be relegated to the remedy of appeal against the impugned Order-in-Original dated 27 February 2023. (Paras 2-4) B) Appellate Remedy - Limitation - Condonation of Delay - The court directed that if the petitioner files an appeal within four weeks, the Appellate Authority shall consider it on merits without raising the issue of limitation, as the petition was pending since 23 June 2023 and the petitioner was bona fide prosecuting it. (Paras 4-5)
Issue of Consideration
Whether the writ petition challenging the Order-in-Original dated 27 February 2023 under the CGST Act should be entertained or the petitioner should be relegated to the appellate remedy in light of the retrospective amendment to Section 140(7) by the Finance (No.2) Act, 2024.
Final Decision
The writ petition is disposed of. The petitioner is relegated to the remedy of appeal. If the petitioner files an appeal within four weeks from today, the Appellate Authority shall consider it on merits without going into the issue of limitation. The Appellate Authority shall take into consideration the effect of the Finance (No.2) Act, 2024 while deciding the appeal. All contentions of all parties are left open. No order as to costs.
Law Points
- Retrospective amendment
- Transition credit
- Relegation to alternative remedy
- Limitation condonation
