Court directs revenue authorities to entertain GST returns filed late due to technical glitches, allowing assessee to claim input tax credit.

Case Name:

M/s. Continental Milkose India Ltd. Vs. Union Of India

Court No. 35

Case: Writ Tax No. 227 of 2019

Key Takeaways:

- The court recognized the assessee’s right to claim legitimate input tax credit despite missing the filing deadline due to technical glitches beyond their control.

- The revenue authorities were directed to provide a solution, either by reopening the portal or manually accepting the returns, to ensure the assessee’s rights were protected.

- This case highlights the court’s willingness to intervene when technical issues prevent taxpayers from meeting statutory deadlines through no fault of their own.

Issue:

Should the assessee be allowed to file the GST TRAN-1 form and claim input tax credit despite missing the deadline due to technical issues with the revenue department’s electronic system?

Facts:

The assessee, M/s. Continental Milkose India Ltd., was unable to upload the GST TRAN-1 form to claim input tax credit within the stipulated time due to the revenue department’s electronic system not responding on the last date (27.12.2017). The assessee had made several efforts to file the application on the last date but was unsuccessful due to the technical glitch. As a result, the assessee was likely to suffer a loss of input tax credit they were entitled to claim.

Arguments:

Assessee’s Argument:

The assessee argued that they should be allowed to file the GST TRAN-1 form and claim input tax credit as the failure to meet the deadline was due to technical issues with the revenue department’s electronic system, which was beyond their control.

Revenue Department’s Argument:

The revenue department initially stated that a new committee was likely to be formed to address such individual cases within two weeks, but they could not provide an exact date.

Key Legal Precedents:

The judgment does not explicitly cite any legal precedents. However, it appears to be based on principles of fairness and the assessee’s right to claim legitimate input tax credit, which should not be denied due to technical glitches beyond their control.

Judgement:

The court directed the revenue authorities to either reopen the portal within two weeks or entertain the assessee’s application manually and pass orders on it after due verification of the claimed input tax credits. The court also ordered that the assessee should be allowed to pay taxes on the regular electronic system while using the input tax credit likely to be considered for them.

FAQs:

Q1: What was the main issue in this case?

A1: The main issue was whether the assessee should be allowed to file the GST TRAN-1 form and claim input tax credit despite missing the deadline due to technical issues with the revenue department’s electronic system.

Q2: Why did the court rule in favor of the assessee?

A2: The court ruled in favor of the assessee because the failure to meet the deadline was due to technical glitches beyond the assessee’s control, and the court recognized the assessee’s right to claim legitimate input tax credit.

Q3: What did the court direct the revenue authorities to do?

A3: The court directed the revenue authorities to either reopen the portal within two weeks or manually accept the assessee’s application and allow them to claim input tax credit after due verification.

Q4: What is the significance of this case?

A4: This case highlights the court’s willingness to intervene and provide relief to taxpayers when technical issues beyond their control prevent them from meeting statutory deadlines. It also reinforces the principle that taxpayers should not be denied legitimate claims due to circumstances outside their control.

Q5: Does this case set a precedent for other similar cases?

A5: While the judgment does not explicitly cite legal precedents, it establishes a principle that revenue authorities should provide reasonable accommodations to taxpayers who face technical difficulties in meeting deadlines through no fault of their own. This principle could potentially be applied in similar cases involving technical glitches and missed deadlines.

Heard Sri Rishi Raj Kapoor, learned counsel for the petitioner and Shri Rajesh Tripathi, learned counsel for the respondents no.1 to 3.

The petitioner seeks a writ of mandamus directing the GST council respondent no.2 to make recommendations to the State Government to extend the time period for filing of GST Tran-1 in the case of the petitioner because his application was not entertained on the last date i.e. 27.12.2017 and he has filed his complete application for the necessary transactional credit.

The petitioner has alleged in the petition that despite making several efforts on the last date for filing of the application, the electronic system of the respondent no.2 did not respond, as a result of which the petitioner is likely to suffer loss of the credit that it is entitled to by passage of time.

The respondents have been served with a notice of this writ petition two days ago and they have instructions to state that some new committee is likely to be formed, which will take care of the individual cases probably within next two weeks but are unable to give any exact date.

Learned counsel for the respondents prays for and are allowed one month's time to file a counter affidavit.

List this matter on 26.03.2019.

In the meantime, the respondents are directed to reopen the portal within two weeks from today. In the event they do not do so, they will entertain the application of the petitioner manually and pass orders on it after due verification of the credits as claimed by the petitioner. They will also ensure that the petitioner is allowed to pay its taxes on the regular electronic system also which is being maintained for use of the credit likely to be considered for the petitioner.

Order Date :- 25.2.2019