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August 10, 2023

Rectification of Form GST TRAN 2

Rectification of Form GST TRAN 2

Optival Health Solutions Pvt. Ltd. & Another vs. Union of India & Others


The case in question revolves around the issue of whether companies such as Optival Health Solutions Pvt. Ltd., falling under the Goods and Services Tax (GST) regime, have the right to rectify or revise their Form GST TRAN 2 electronically or manually.

Let us understand what is  Form TRAN 1 AND TRAN 2 under GST?

TRAN 1 under GST: The GST (Goods and Service Tax) form TRAN 1 is a transition form for existing taxpayers in old schemes who are filing the GST TRAN – 1 (Transition 1) form to claim their previous input tax credit from previously purchased stock prior to the implementation of the GST.

TRAN 2 under GST: GST form TRAN 2 (Transition 2) is filed by registered taxpayers who are eligible to receive credit in the Electronic Cash Ledger for eligible duties and taxes previously paid on inputs under the pre-GST regime.

Facts of the Case:

Optival Health Solutions filed both Form GST TRAN 1 and Form GST TRAN 2 within the stipulated time frame. These forms are designed to enable the transfer of tax credit from the earlier Central Value Added Tax (CENVAT) system to the new GST system. Optival Health Solutions had been registered under the West Bengal Value Added Tax Act, 2003, and the Central Sales Tax Act, 1956. Subsequently, the company detected errors in Form GST TRAN 2 that they wished to rectify. While the rectification of Form TRAN 1 was permitted under Rule 120 A, the GST Act did not allow similar rectifications for Form TRAN 2.

Issues Raised:

A central issue pertains to the permissibility of rectifying Form GST TRAN 2. The Tax Authorities argued that Section 140 offers a one-time provisional benefit, which must be strictly adhered to. They contended that Form TRAN 2 is not akin to a return. On the other hand, Optival Health Solutions contended that while Form TRAN 1 rectifications were allowed, Form TRAN 2 corrections were not permitted under the GST Act. They also argued that this might infringe upon the principles of equality enshrined in Article 14 of the Constitution.

Arguments and Observations:

Optival Health Solutions contended that if rectifications were allowed for Form TRAN 1, then the same privilege should extend to Form TRAN 2. They pointed out that disallowing rectification could potentially violate the rights guaranteed under Article 14 of the Constitution. They emphasized the need to interpret rules in a manner that upholds individual rights within the framework of the law. Reference was made to legal precedents such as Alwaye Sugar Agency vs. Assistant Commissioner (Assessment) 2018 and G.C. Infra Innovations vs. Union of India 2018 to support their argument.

Tax Authorities maintained that transitional provisions are intended as a one-time benefit and must be strictly adhered to.

Observation and Judgment:

The court directed the concerned authorities to permit Optival Health Solutions to file a revised Form GST TRAN 2, either electronically or manually, within a stipulated four-week timeframe from the communication of the court’s order. As a result, the writ petition was disposed of without any cost implications. Both parties were directed to receive copies of the judgment and order upon following the appropriate application procedure.


The court’s ruling favored Optival Health Solutions Pvt. Ltd., granting them the right to rectify Form GST TRAN 2. This decision underscores the significance of affording taxpayers the opportunity to correct genuine errors, thereby preserving fairness and upholding the principles of equality before the law.

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