Section 73 CGST Proceedings Cannot Recover Transitioned CENVAT Credit: GSTAT Kolkata

Following Jharkhand and Calcutta High Court rulings, the Goods and Services Tax Appellate Tribunal, Kolkata held that a demand under Section 73 of the CGST Act to recover transitioned CENVAT credit was without jurisdiction.

The Goods and Services Tax Appellate Tribunal (GSTAT), Kolkata has held that proceedings under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act) cannot be used to recover CENVAT credit carried into GST through Form GST TRAN‑1, and that any such action lies under the earlier law [Maithan Steel and Power Limited v. Satyajit Singh, Commissioner Kolkata South, 2026-juristway.com-3379-GSTAT(Kolkata)-GST].

The Bench of Satya Gopal Chattopadhyay, Member (Judicial), and Anindya Mitra, Member (Technical) heard the taxpayer’s appeal; Mr. Mitra wrote the order. A notice dated 20 Dec 2021 alleged that the taxpayer had carried forward ₹14,26,661 against much lower closing balances in its June 2017 excise returns, and had wrongly claimed unavailed credit on capital goods. The taxpayer said revised returns were filed manually on 14 Jul 2017. The demand was confirmed at ₹13,17,806, and the First Appellate Authority gave relief only on the capital goods portion.

The taxpayer argued, among other things, that the eligibility of CENVAT credit under the earlier regime cannot be disputed in Section 73 proceedings. The Revenue relied on Rule 121 of the CGST Rules, which provides for verification of transitional credit and proceedings under Section 73 or Section 74.

Taking up jurisdiction first, the Tribunal relied on Usha Martin Limited v. Additional Commissioner, Central GST and Excise (2022), where the Jharkhand High Court held that Section 73 deals with tax and input tax credit under the CGST Act and does not speak of CENVAT credit. That Court held that the saving clause in Section 174(2)(e) allows such matters to be pursued under the Central Excise Act, 1944 and the CENVAT Credit Rules, 2004.

The Tribunal also applied the binding decision of the Calcutta High Court in Kunjal Synergies Private Limited v. Assistant Commissioner of CGST & CX (MAT 2333 of 2023), which quashed a Section 73 notice on transitional credit as without jurisdiction while leaving the authorities free to act under the earlier law.

The Revenue’s bare assertion that Usha Martin was distinguishable was not accepted, as it did not show how the legal issue differed. Holding the case squarely covered, the GSTAT set aside the appellate order and allowed the appeal.

2026-juristway.com-3379-GSTAT(Kolkata)-GST