CBIC issues standard statements for field formations to counter legal cases


With the rising number of writ petitions, public interest litigation and appeals regarding transitional credit, the Central Board of Indirect Taxes and Customs (CBIC) has issued standard statements which can be used by field formations as counter responses from the government’s side in legal cases.

The set of statements will reduce duplication of work at the headquarters while giving a go-to guide for field formations to file counter responses in courts, the Board’s policy wing has told field formations in an internal communication last week, adding that only matters that are not covered in the statements be brought to the policy wing’s notice.

“It is also reiterated that references should not be made to Policy Wing in routine manner seeking para-wise comments on writ petitions, PILs, appeals as such and only a self-contained reference may be made pointing out the exact policy issues which are not covered (in the statements), only with the approval of the Commissioner concerned,” the policy wing has stated in the communication.


The set of statements includes the policy wing’s or the government’s stand on several issues related to transitional credit and non-filing of prescribed forms, along with detailed references to arguments made by the government and decisions taken by courts, in different cases.

One of the statements categorically states that transitional credits or input tax credits are not the absolute or vested rights of a taxpayer and are subject to statutory provisions and rules. This matter has been contested in various judicial fora where courts have sided with the taxpayer, leading to appeals by the tax authorities and prolonged litigation.

The government’s view is that taxpayers’ contention in any case is ‘fundamentally flawed, legally erroneous and ex-facie contrary to the law.’

“The internal note and guidance clearly indicates that the government is not giving up on the issue and the tax papers may get ready for a prolonged battle on this issue,” said Abhishek Jain, tax partner at EY.

While the guidance reflects internal efficiencies being ensured in government’s operations, it indicates the government’s stand of rectification or fresh filings of Tran-1 not being allowed after December 27, 2017, even though the matter has also recently contested in the Delhi High Court that the time limit should be permitted till June 30, 2020. “With the arguments mentioned herein, this matter is expected to only attain finality at Supreme Court,” Jain added.

Despite various High Court rulings granting relief to the dealers to claim the transitional credit, the government still believes that transitional credit should not be unnecessarily given if there is any lapse by the assessee, experts noted.

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