Reliance on MVAT data for TRAN-1 credit impermissible as sec. 140 jurisdiction is compartmentalized {Gunjan Surgical and Scientific Co. vs. State of Maharashtra [2026] 186 taxmann.com 249 (Bombay)}
Facts
- Petitioner had claimed transitional input tax credit under Section 140 of the CGST/MGST Acts through TRAN-1.
- Department reduced/disallowed part of the credit alleging mismatch in MVAT J1/J2 data under the erstwhile MVAT regime.
- The appellate authority upheld the reduction by referring to alleged discrepancies and assessment-related issues under MVAT law.
Issue
Whether, while adjudicating transitional credit under Section 140, the authorities could go into MVAT assessment disputes such as J1/J2 mismatches and deny transitional ITC on that basis.
Held
The Bombay High Court held that:
- Proceedings under Section 140 are confined to examining eligibility of transitional credit under GST law.
- Authorities could not import or adjudicate disputed MVAT assessment issues while deciding TRAN-1 credit.
- The appellate authority travelled beyond its statutory jurisdiction by relying on vague findings relating to MVAT mismatches without proper adjudication under MVAT law.
- Since the findings were outside the scope of Section 140 proceedings, the appellate order was unsustainable in law.
