High Court directs Revenue to reopen GST portal for assessee to file transitional credit form after technical glitches.

Case Name:

M/s. Kher Deseals Vs. Union Of India

Writ Tax No. 409 of 2019

Key Takeaways:

- The court recognized the assessee’s difficulties in filing the GST TRAN-1 form online due to technical glitches on the portal.

- It directed the Revenue to provide an alternative method (manual filing) for the assessee to claim legitimate transitional credit.

- The order highlights the court’s stance on avoiding unnecessary hardship to assessees due to technical issues beyond their control.

Issue:

Whether the Revenue authorities should be directed to reopen the GST portal or provide an alternative mechanism for the petitioner to file the GST TRAN-1 form and claim transitional credit?

Facts:

The petitioner, M/S. KHER DIESELS, sought a writ of mandamus from the Allahabad High Court. Despite making several attempts on the last date (04.10.2018) for filing the GST TRAN-1 form, the company alleged that the electronic system of the respondent (Revenue authorities) did not respond. As a result, the petitioner was likely to suffer the loss of transitional credit it was entitled to claim.

Arguments:

Petitioner’s Arguments:

The petitioner argued that it should be allowed to file the complete GST TRAN-1 form to claim the necessary transitional credit as per the amended Rule 117(1A). The company had made multiple efforts on the last date, but the electronic system failed to respond.

Revenue’s Arguments:

The specific arguments from the Revenue authorities are not mentioned in the summary. However, they likely contested the petitioner’s claims or cited procedural grounds for not allowing the manual filing.

Key Legal Precedents:

The judgment does not explicitly cite any legal precedents. However, it refers to the amended Rule 117(1A), which likely governs the filing of the GST TRAN-1 form and the transitional credit provisions.

Judgement:

The Allahabad High Court directed the respondents (Revenue authorities) to reopen the portal before 31st March 2019 for the petitioner to file the GST TRAN-1 form. If the portal is not reopened, the Revenue must entertain the petitioner’s GST TRAN-1 form manually and pass orders after due verification of the claimed credits. Additionally, the court ordered the Revenue to ensure that the petitioner is allowed to pay its taxes on the regular electronic system, utilizing the transitional credit considered for the petitioner.

FAQs:

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

A1. The GST TRAN-1 form is used by taxpayers to claim transitional credit for taxes paid under the previous tax regime (before GST implementation). Failing to file this form on time could result in the loss of legitimate credit, impacting the taxpayer’s financial burden.

Q2. Why did the court direct the Revenue to reopen the portal or allow manual filing?

A2. The court recognized that the petitioner had faced technical issues on the last date for filing the form online, which was beyond its control. To avoid unnecessary hardship and ensure the petitioner could claim legitimate transitional credit, the court ordered the Revenue to provide an alternative mechanism.

Q3. What is the significance of the court’s decision?

A3. The decision highlights the court’s stance on ensuring fairness and avoiding undue hardship to taxpayers due to technical glitches or procedural issues beyond their control. It also emphasizes the importance of allowing taxpayers to claim legitimate transitional credit during the shift to the GST regime.

Q4. What happens if the Revenue does not comply with the court’s order?

A4. If the Revenue does not reopen the portal by the specified date, they must entertain the petitioner’s GST TRAN-1 form manually and pass orders after due verification of the claimed credits. Failure to comply with the court’s order could potentially lead to contempt of court proceedings.

Heard Sri Nishant Mishra, learned counsel for the petitioner, Sri Shamim Ahmad, learned Counsel for the respondents no.1,2 & 5, Sri R.C. Shukla, learned Counsel for the respondents no.3 & 4 learned Standing Counsel appears for the respondent no.6 & 7.

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. 04.10.2018 and he is permitted to file his complete GST ITC-01 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 eventthey do not do so, they will entertain the GST ITC-01 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 06.05.2019.

Order Date :- 30.3.2019