Businesses Win Relief: Madras HC Orders GST Portal Access for TRAN-1 Filing

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Case Name

M/s. Evershine Wood Packaging Pvt. Ltd. & Others v. The GST Council & Others

Court Name: High Court of Judicature at Madras

Case No.: WP. Nos. 17836 to 17838 of 2018

Decided on: 17th July 2018, before Hon’ble Mr. Justice T.S. Sivagnanam

Key Takeaways

1. Technical glitches on the GST portal are a valid ground for seeking relief — businesses are not penalized for failures that are not attributable to them.

2. CBIC Circular No. 39/13/2018-GST dated 03.4.2018 is the key circular that set up the Grievance Redressal Mechanism for taxpayers who couldn’t file TRAN-1 due to IT glitches.

3. Nodal Officers play a crucial role — they are the first point of contact for taxpayers facing GST portal issues, and their appointment is mandatory.

4. The court followed a consistent approach taken by the High Courts of Chhattisgarh, Delhi, and Kerala in similar matters.

5. The last date for filing TRAN-1 was NOT extended generally — only identified taxpayers who genuinely faced IT glitches were to be allowed to complete the process.

6. Taxpayers cannot amend the amount of credit in TRAN-1 during this process — they can only complete the filing of what was already recorded.

Issue

The Central Legal Question:

Should the GST portal be reopened and access granted to taxpayers who were unable to upload Form GST TRAN-1 within the stipulated time due to technical glitches on the portal — glitches that were not attributable to the taxpayers themselves?

In simpler terms: Can businesses be denied their rightful input tax credit just because the government’s own portal had technical problems?

Facts

• Who are the petitioners?
• M/s. Evershine Wood Packaging Pvt. Ltd. (Sriperumbudur) — Petitioner in WP.17836/2018
• M/s. Greenwood Trading Company (Sriperumbudur) — Petitioner in WP.17837/2018
• M/s. VKR Impex (Mudichur) — Petitioner in WP.17838/2018

• What is TRAN-1? When GST was introduced, businesses that had accumulated input tax credits (like service tax, central excise duty) under the old tax regime needed to carry those credits forward into the GST system. Form GST TRAN-1 was the form used to declare and claim those transitional credits.

• What went wrong? These three businesses tried to upload their TRAN-1 forms within the stipulated time but couldn’t do so because of errors/technical glitches on the GST portal. This was not their fault.

• What did they ask for? They filed writ petitions under Article 226 of the Constitution of India asking the court to direct the respondents to reopen the GST portal and allow them to file their TRAN-1 forms.

• Who are the respondents?
• The GST Council (New Delhi)
• The State Tax Officers of Tambaram and Sriperumbudur jurisdictions

• What had the government already done? The Central Board of Indirect Taxes and Customs (CBIC) had already recognized this widespread problem and issued Circular No. 39/13/2018-GST dated 03.4.2018, setting up a Grievance Redressal Mechanism. The Tamil Nadu government had also nominated Mr. S. Ramasamy, Joint Commissioner (CS) as the State Level Nodal Officer.

Arguments

Petitioners’ Side (The Businesses):

• They argued that they were unable to upload Form GST TRAN-1 within the stipulated time due to technical errors on the GST portal — errors that were completely outside their control.

• They requested the court to issue directions to reopen the GST portal so they could file their TRAN-1 forms and claim their rightful input tax credits.

• Their counsel pointed out that similar directions had already been issued by the High Courts of Chhattisgarh, Delhi, and Kerala in identical situations, and requested the Madras High Court to follow suit.

• The petitioners’ counsel also argued that paragraph 5 of the CBIC Circular dated 03.4.2018 was confined only to non-TRAN-1 issues — implying that the Nodal Officer mechanism might not apply to their TRAN-1 problems.

Respondents’ Side (The Government):

• The Government Advocate informed the court that the Principal Secretary and Commissioner of Commercial Taxes, Government of Tamil Nadu, vide proceedings dated 18.5.2018, had already nominated Mr. S. Ramasamy, Joint Commissioner (CS) as the State Level Nodal Officer to address IT glitch problems on the GST portal.

• The Senior Standing Counsel for GSTN also confirmed that a Nodal Officer had already been appointed by GSTN and the Commissioner of GST and Central Excise (Outer).

• The government essentially said: “There’s already a mechanism in place — use it!”

Key Legal Precedents

The court referred to three important orders from other High Courts dealing with identical issues:

1. High Court of Chhattisgarh

W.P(T) No. 68 of 2018 — Order dated 14.5.2018

The Chhattisgarh High Court directed the petitioner to approach the Nodal Officer (Assistant Commissioner, State GST, Raipur Circle – 7) within four days with a representation and all necessary documents. The Nodal Officer was directed to consider and dispose of the matter following the procedure in paragraph 8 of the circular dated 3.4.2018.

2. High Court of Delhi

W.P(c) No. 1300 of 2018 (and batch) — Order dated 09.4.2018

The Delhi High Court directed petitioners to approach the concerned Nodal Officer with brief representations outlining their grievances. The Nodal Officer or the Redressal Committee was directed to deal with representations in accordance with the circular dated 03.4.2018.

3. High Court of Kerala

W.P. No. 17348 of 2018 — Order dated 14.6.2018

The Kerala High Court permitted the petitioner to prefer an application before the Nodal Officer (the additional sixth respondent). It also made a very important observation:

“if it is found that the petitioner could not upload FORM GST TRAN-1 for reasons not attributable to him, appropriate action shall be taken to enable him to take credit of the input tax available to him at the time of migration.”

4. CBIC Circular No. 39/13/2018-GST dated 03.4.2018

This is the key circular that the court relied upon. Specifically:

• Paragraph 8 dealt with the “Resolution of stuck TRAN-1s and filing of GSTR-3B” — it provided the mechanism for taxpayers who couldn’t complete TRAN-1 filing due to IT glitches.
• Paragraph 5.1 provided for the appointment of Nodal Officers by GSTN, Central and State Governments to address problems faced by taxpayers due to portal glitches.

5. Article 226 of the Constitution of India

The petitions were filed under Article 226 of the Constitution of India, which gives High Courts the power to issue writs (like Mandamus) directing government authorities to perform their duties.

Judgment

Who Won?

This was a partial win for the petitioners — the court didn’t directly order the portal to be reopened, but it gave them a clear, structured path to get their grievances resolved.

What Did the Court Decide?

The Madras High Court, following the consistent approach of the Chhattisgarh, Delhi, and Kerala High Courts, disposed of the writ petitions with the following specific directions:

(i) Appointment of Nodal Officers:

The respective Commissioners of GST and Central Excise were directed to appoint Nodal Officer(s) for the State of Tamil Nadu, if not already appointed, within 2 weeks from the date of receipt of a copy of the order.

(ii) Filing of Applications by Petitioners:

The petitioners/assessees were directed to submit their applications in accordance with paragraph 8 of the CBIC Circular dated 03.4.2018 within 2 weeks from the date of receipt of a copy of the order, to their respective Assessing Officers/Jurisdictional Officers/GST Officers.

(iii) Forwarding to Nodal Officers:

The Assessing Officers were directed to forward the applications to the Nodal Officers within 1 week of receiving them.

(iv) Resolution by Grievance Committee:

The Nodal Officer, in consultation with GSTN, was directed to take note of the grievances and forward them to the Grievance Committee, which would take an appropriate decision within 3 weeks from the date of receiving the applications in proper form.

No costs were awarded to either party.

Court’s Reasoning:

• The court found that the CBIC Circular No. 39/13/2018-GST dated 03.4.2018 already provided a complete mechanism for resolving such grievances.

• The court rejected the petitioners’ argument that paragraph 5 of the circular was confined only to non-TRAN-1 issues, holding that no such specific distinction was made in paragraph 5.

• The court confirmed that the Nodal Officer mechanism applies to TRAN-1 issues as well.

FAQs

Q1: What is Form GST TRAN-1 and why is it so important?

Form GST TRAN-1 is a transitional form that businesses had to file when GST was introduced to carry forward their accumulated input tax credits (like central excise duty, service tax, VAT) from the old tax regime into the GST system. Missing this filing could mean losing significant tax credits that businesses had legitimately earned.

Q2: Did the court directly reopen the GST portal for these businesses?

No, the court did not directly order the portal to be reopened. Instead, it directed the businesses to follow the grievance redressal mechanism set up under CBIC Circular No. 39/13/2018-GST dated 03.4.2018 and approach the Nodal Officers.

Q3: What is a Nodal Officer in this context?

A Nodal Officer is a designated government official appointed specifically to address problems faced by taxpayers due to IT glitches on the GST portal. In Tamil Nadu, Mr. S. Ramasamy, Joint Commissioner (CS) was nominated as the State Level Nodal Officer.

Q4: Does this mean the deadline for filing TRAN-1 was extended for everyone?

No! The court was very clear about this. The last date for filing TRAN-1 was NOT extended in general. Only those taxpayers who genuinely tried but couldn’t complete the process due to IT glitches were to be identified and allowed to complete their filing.

Q5: Can businesses change the amount of credit they claim in TRAN-1 through this process?

No. Taxpayers are not allowed to amend the amount of credit in TRAN-1 during this process. They can only complete the filing of what was already recorded by them in the TRAN-1 that got stuck.

Q6: What happens if the Grievance Committee finds that the failure to upload was indeed due to a technical glitch?

As the Kerala High Court noted in W.P. No. 17348 of 2018, if it is found that the petitioner could not upload FORM GST TRAN-1 for reasons not attributable to him, appropriate action shall be taken to enable him to take credit of the input tax available to him at the time of migration.

Q7: What is the timeline set by the court for resolution?

Here’s the timeline:

• 2 weeks: Petitioners to submit applications to their Assessing Officers
• 1 week: Assessing Officers to forward applications to Nodal Officers
• 3 weeks: Grievance Committee to take a decision after receiving applications

So the entire process should ideally be completed in about 6 weeks from the date of the order.

Q8: Is this judgment binding on other similar cases in Tamil Nadu?

While this judgment is specific to these three petitioners, it establishes a clear and consistent approach that aligns with the orders of the High Courts of Chhattisgarh, Delhi, and Kerala. Other taxpayers in similar situations in Tamil Nadu can use this judgment as a strong reference when approaching the Nodal Officers or courts.

Heard both.

2. The sum and substance of the prayer of the petitioners is that they are unable to upload Form GST TRAN-1 to take credit of the input tax/ service tax/central excise duty availed by them at the time of migration within the time stipulated.

3. The petitioners would state that they were unable to upload Form GST TRAN-1 within the time stipulated on account of some error. Therefore, the petitioners seek for appropriate direction in this regard.

4. Similar prayers were made before the High Courts of Chhattisgarh, Delhi and Kerala. The High Court of Chhattisgarh, in W.P(T) No.68 of 2018 by order dated 14.5.2018, issued appropriate directions. The operative portion of the said order reads as follows:

“7. After going through the aforesaid circular and the scheme of the circular, I am convinced that complete procedure has been prescribed for redressal of grievance which the petitioner has raised in this writ petition, particularly of non-uploading of FORM TRAN-I due to technical glitches. Apart from this State Government – Commissioner, Central Excise/GST has issued order dated 5.4.2018 in which Nodal Officers have already been appointed by the State Government. In view of the above, the petitioner is directed to approach the Nodal Officer of Dhamtari i.e., Assistant Commissioner, State GST, Raipur Circle – 7 within four days from today by filing representation along with all necessary documents for redressal of his grievance and in turn, the said authority would consider and dispose of the same following the procedure laid down in para 8 of the circular dated 3.4.2018 and would take decision accordingly keeping in view that this writ petition remained pending since 26.3.2018.

8.With the aforesaid direction, the writ petition stand finally disposed of.”

5. So far as the High Court of Delhi is concerned, the Delhi High Court, in W.P(C) No.1300 of 2018 etc. batch by order dated 09.4.2018, directed the petitioners therein to approach the concerned Nodal Officer with brief representations outlining their grievances and the Nodal Officer or the Redressal Committee was directed to appropriately deal with representations in accordance with the circular dated 03.4.2018.

6. So far as the Kerala High Court is concerned, in

W.P.No.17348 of 2018 by order dated 14.6.2018, the following

direction has been issued:

“Having regard to the facts and

circumstances of this case as also the orders

passed in similar matters, I deem it

appropriate to dispose of the writ petition

permitting the petitioner to prefer an

application before the additional sixth

respondent, the Nodal Officer appointed to

resolve issues in the nature of one raised by

the petitioner. Ordered accordingly.

Needless to say that if the petitioner

prefers an application within two weeks from

the date of receipt of a copy of this

judgment, same shall be considered and

appropriate decision shall be taken by the

additional sixth respondent within a week

thereafter. Needless also to say that if it

is found that the petitioner could not upload

FORM GST TRAN-1 for reasons not attributable

to him, appropriate action shall be taken to

enable him to take credit of the input tax

available to him at the time of migration.”

7. The learned counsel appearing for the petitioners would

submit that identical directions may be issued in this batch of

cases as well.

8. It was brought to the notice of the Central Board of

Indirect Taxes (CBIC) and Customs about the difficulties faced by

a section of tax payers owing to technical glitches on the GST

and representations were given by the petitioners. Therefore, the

CBIC is setting up a Grievance Redressal Mechanism vide Circular

No.39/13/2018-GST dated 03.4.2018. Paragraph 8 of the said

circular would be relevant for the purpose of the cases on hand,

which reads as under :

“8. Resolution of stuck TRAN-1s and

filing of GSTR-3B

8.1 A large number of taxpayers could

not complete the process of TRAN-1 filing

either at the stage of original or revised

filing as they could not digitally

authenticate the TRAN-1s due to IT related

glitches. As a result, a large number of

such TRAN-1s are stuck in the system. GSTN

shall identify such taxpayers who could not

file TRAN-1 on the basis of electronic audit

trail. It has been decided that all such

taxpayers, who tried but were not able to

complete TRAN-1 procedure (original or

revised of filing them on or before

27.12.2017 due to IT glitch, shall be

provided the facility to complete TRAN-1

filing. It is clarified that the last date

for filing of TRAN-1 is not being extended in

general and only these identified taxpayers

shall be allowed to complete the process of

filing TRAN-1.

8.2. The Taxpayers shall not be allowed

to amend the amount of credit in TRAN-1

during this process vis-a-vis the amount of

credit which was recorded by the taxpayer in

the TRAN-1, which could not be filed. If

needed, GSTN May request field formations for

Centre and State to collect additional

document/data etc., or verify the same to

identify taxpayers who should be allowed this

procedure.

8.3. GSTN shall communicate directly

with the taxpayers in this regard and submit

a final report to GIC about the number of

TRAN-1s filed and submitted through this

process.

8.4. The taxpayers shall complete the

process of filing of TRAN 1 stuck due to IT

glitches, as discussed above, by 30th April

2018 and the process of completing filing of

GSTR 3B which could not be filed for such

TRAN 1 shall be completed by 31st May 2018.”

9. Further, paragraph 5.1 of the said circular would state

that GSTN, Central and State Government would appoint Nodal

Officers in requisite number to address the problem a taxpayer

faces due to glitches, if any, in the common portal. This would

be publicized adequately.

10. An argument was advanced by the learned counsel for the

assessees that paragraph 5 of the said circular dated 03.4.2018

is confined to non-TRAN-1 issues. However, this Court finds that

there is no such specific distinction brought about in paragraph

5 of the said circular. Therefore, it can be safely held that

the procedure of appointment of Nodal Officers and identification

of issues are to be done in the manner provided in paragraph 5 of

the said circular. Unless the Nodal Officers are appointed, the

Jurisdictional officer of the Assessee, namely Assessing Officer

would not be in a position to forward the representations/applications filed by the assessees pointing out the glitches they are facing while availing the credit during the transition process.

11. The learned Government Advocate submits that the

Principal Secretary and Commissioner of Commercial Taxes,

Government of Tamil Nadu vide, proceedings dated 18.5.2018,

nominated Mr.S.Ramasamy, Joint Commissioner (CS) as the State

Level Nodal Officer to address the problems faced by the tax

payers due to IT glitches, if any, in the GST portal. The Senior

Standing Council appearing for GSTN and Commissioner of GST and

Center Excise (Outer) has also informed that already a Nodal

officer had been appointed by GSTN and Commissioner of GST and

Central excise (Outer).

12. Thus, writ petitions stand disposed of with the

following directions:

(i) The respective Commissioner of GST and Central excise

are directed to appoint Nodal Officer/Officers for the State of

Tamil Nadu, if not already appointed, within a period of 2 weeks

from the date of receipt of a copy of this order and

(ii) The petitioners/assessees are directed to submit their

applications in accordance with paragraph 8 of the said circular

dated 03.4.2018 within a period of two weeks from the date of

receipt of a copy of this order to their respective Assessing

Officers/Jurisdictional Officers/GST Officers. The Assessing

Officers are directed to forward the applications to the Nodal

Officers within a period of one week. The Nodal Officer nominated

will, in consultation with the GSTN, shall take note of the

grievances expressed by the petitioners/assessees and forward the

same to the Grievance Committee, who, in turn, would take an

appropriate decision in the matter within a period of three weeks

from the date, on which, the applications are received in proper

form.

No costs.