The Chennai Bench of the Goods and Services Tax Appellate Tribunal (GSTAT) will analyse whether the ITC shown against one GSTIN can be claimed by a transferee after a merger or amalgamation without complying with the procedure mentioned u/s 18(3) of the CGST Act read with Rule 41 of the CGST Rules.
The issue relates to ITC of Rs 30,23,370. It was claimed by Rockman Industries Limited (the respondent). As per the revenue, the credit reported in the GSTR-2A against one GSTIN could not be claimed by the transferee in its GSTR-3B without complying with the statutory procedure u/s 18(3) read with Rule 41.
The counsel for the revenue said that there was no question of law engaged and that the appeal was confined to the factual issue of whether the disputed ITC had been claimed validly.
The counsel for the respondent said that even though the amount was less than Rs 50 lakh, the dispute needs interpretation of Sections 16 and 18 of the CGST Act and Rule 41 of the CGST Rules.
The Bench, Praveen Kumar Jain (Judicial Member) and Shaik Khader Rahman (Technical Member) said that, “The determination of whether credit reflected against one GSTIN can be directly availed by a transferee without following the mechanism prescribed under Section 18(3) read with Rule 41, and whether such a lapse is procedural or substantive, are, in the considered view of this Bench, questions that fall within the meaning of “Question of Law” as explained in Atria Convergence Technologies Ltd. (supra).”
The tribunal stated that a ‘Question of Law’ encompasses any issue that needs the interpretation of legal principles, statute or precedent. These issues shall be determined together by one Judicial Member and one Technical Member (Division Bench). We are of the view that for deciding the Question of Law involved in the present appeal, there must first be a foundation for it in the memorandum of appeal.
Also Read: GST ITC Cannot Be Denied if Tax Returns Filed Within Section 16(5) Deadline
The tribunal mentioned that the revenue, in its appeal, had raised that Section 18(3) read with Rule 41 provides a statutory framework that is mandatory and that compliance with it is required for valid transfer and claim of credit in merger cases.
The tribunal determined that the appeal raises a legal question and ordered it to be reviewed by a Division Bench consisting of one Judicial Member and one Technical Member. The hearing is scheduled for October 5, 2026.
| Case Title | Assistant Commissioner of GST & Central Excise Vs Rockman Industries Ltd. |
| Appeal No. | APL/2/CHE/2026 |
| For the Petitioner | Mr. H. K Suresh |
| For the Respondent | Mr Raghavan Ramabadran, M/s Lakshmikumaran & Sridharan Attorneys |
| Chennai GSTAT | Read Order |
