GST portal glitch forces court to allow manual filing of transitional credit claims after deadline.

Case Name:

M/s. Anil Kumar & Sons Vs. Union Of India And 4 Others

Writ Tax No. 221 of 2019

Key Takeaways:

- Technical glitches in government portals cannot deprive taxpayers of their legitimate claims/rights.

- Courts can intervene and direct revenue authorities to make alternative arrangements in such cases.

- The judgment highlights the need for robust IT systems and contingency plans for e-governance projects.

Issue:

Whether the petitioner should be allowed to file the GST TRAN-1 form manually for claiming transitional input tax credit, given the alleged failure of the GST portal on the last date?

Facts:

The petitioner, M/s. Anil Kumar & Sons, sought a writ of mandamus directing the GST Council (respondent no. 2) to recommend extending the time for filing GST TRAN-1. The petitioner claimed that despite multiple attempts on the last date (27.12.2017), the GST portal did not respond, preventing them from filing the form to claim transitional input tax credit.

Arguments:

Petitioner’s Arguments:

The petitioner argued that they should be allowed to file the complete GST TRAN-1 form manually, as per Rule 117(1A), to claim the necessary transitional credit. Failure to do so would result in loss of legitimate credit due to a technical glitch beyond their control.

Respondents’ Arguments:

The respondents’ arguments are not explicitly mentioned in the summary.

Key Legal Precedents:

The judgment does not cite any specific legal precedents.

Judgement:

The court directed the respondents (revenue authorities) to either:

- Re-open the GST portal before 31.03.2019 to allow the petitioner to file GST TRAN-1, or

- In case the portal is not re-opened, entertain the petitioner’s GST TRAN-1 form manually and pass orders after due verification of the claimed credits.

- The court also directed that the petitioner should be allowed to pay taxes on the regular electronic system, utilizing the transitional credit considered for them.

- The respondents were given one month to file a counter-affidavit, and the matter was listed for 25.03.2019.

FAQs:

Q1. What is the GST TRAN-1 form, and why is it important?

A1. The GST TRAN-1 form was a one-time form that allowed taxpayers to claim credit for taxes paid under the previous tax regime (before GST implementation) and carry it forward under the GST system. Failure to file this form on time could result in the loss of legitimate tax credits.

Q2. Why did the court intervene in this case?

A2. The court intervened because the petitioner alleged that a technical glitch in the GST portal prevented them from filing the TRAN-1 form on the last date, despite multiple attempts. The court recognized that such a glitch should not deprive taxpayers of their legitimate claims/rights.

Q3. What options did the court provide to the revenue authorities?

A3. The court directed the revenue authorities to either re-open the GST portal before 31.03.2019 to allow the petitioner to file TRAN-1 or, if the portal is not re-opened, to manually accept and verify the petitioner’s claim for transitional credit.

Q4. What is the significance of this judgment?

A4. This judgment highlights the need for robust IT systems and contingency plans in e-governance projects. It also reinforces the principle that technical glitches should not deprive taxpayers of their legitimate claims/rights, and courts can intervene to ensure fairness and justice.

Q5. Does this judgment set a precedent for other similar cases?

A5. While the judgment does not explicitly set a legal precedent, it provides guidance on how courts may approach similar cases involving technical glitches in government portals that prevent taxpayers from exercising their legitimate rights or meeting deadlines.

Heard Sri Vishwjit, learned counsel for the petitioner, Sri O.P. Srivastava, learned Counsel for the respondents no.1, 2 & 3, and Shri R.C. Shukla, learned Counsel for the respondent no.4.

The petitioner seeks a writ of mandamus directing the GST council respondent no.2 to make recommendations to the Commissioner 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 is permitted to file his complete GST TRAN-1 for the necessary transactional credit as per amended Rule 117 (1A).

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.

In view of the above, the respondents are directed to open the portal before 31st of March 2019. In the event they do not do so, they will entertain the GST TRAN-1 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.

Learned Counsel for the respondents may file a counter affidavit within a month.

List this matter on 25.03.2019.

Order Date :- 22.2.2019