Delhi High Court held that period of 90 days for claiming input tax credit is directory and therefore, period of limitation of 3 years under the Limitation Act would apply. Delhi High court has allowed all taxpayers to claim transitional credit accumulated before the implementation of the GST by 30th June 2020.
The Court has directed the revenue department to allow all assessees to claim input tax credit by 30th June 2020. The order would apply to all taxpayers who could not file TRAN-1 and claim input tax credit.
This is a significant judgment on account of the fact that it had extended the period for claiming input credit from 90 days to 3 years. In addition to this, the judgment is applicable to all taxpayers and not just the petitioner.
Initially, as per the GST law, taxpayers could claim their transitional credit in the form of input tax credit accumulated on all indirect taxes prior to implementation of GST i.e. till December 2017. But, later the same was extended on a case-to-case basis for technical errors in filling the transitional credit form TRAN-1.
Normally, a court order applies to the petitioner, this judgment is significant as the verdict applies to all taxpayers. While this judgement will benefit thousands of taxpayers, it will hit the state and Central governments unless the revenue department gets a stay on the order from the Supreme Court.