High Court allows writ petition, directs Revenue to reopen GST portal for filing transitional credit Form GST TRAN-1.

Case Name:

M/s. Firozabad Tent House Vs. Union Of India

Writ Tax No. 363 of 2019

Key Takeaways:

- The court recognized the petitioner’s genuine efforts to file Form GST TRAN-1 on the last date.

- It directed the Revenue to reopen the GST portal or accept the form manually to allow the petitioner to claim transitional credit.

- The ruling upholds principles of natural justice and prevents hardship to taxpayers due to technical glitches beyond their control.

Issue:

Whether the petitioner should be allowed to file Form GST TRAN-1 for claiming transitional credit under the GST regime, despite missing the last date due to technical issues with the GST portal?

Facts:

The petitioner, M/s Firozabad Tent House, made several attempts to file Form GST TRAN-1 on the last date, December 27, 2017, for claiming transitional credit under the GST regime. However, the electronic system of the Revenue authorities did not respond, and the petitioner’s application was not entertained. As a result, the petitioner was likely to suffer the loss of credit they were entitled to.

Arguments:

Petitioner’s Argument:

The petitioner sought a writ of mandamus directing the GST Council to recommend to the Commissioner to extend the time period for filing Form GST TRAN-1. The petitioner argued that despite genuine efforts, they could not file the form due to technical issues with the GST portal on the last date.

Revenue’s Argument:

The details of the Revenue’s arguments are not explicitly mentioned in the summary.

Key Legal Precedents:

The judgment does not cite any specific legal precedents.

Judgement:

The Allahabad High Court allowed the writ petition and directed the Revenue authorities to take the following actions:

- Reopen the GST portal before March 31, 2019, to allow the petitioner to file Form GST TRAN-1.

- If the portal is not reopened, entertain the petitioner’s Form GST TRAN-1 manually and pass orders on it after due verification of the claimed credits.

- Ensure that the petitioner is allowed to pay taxes on the regular electronic system using the credit likely to be considered for the petitioner.

- The court recognized the petitioner’s genuine efforts and held that they should not be deprived of the transitional credit due to technical glitches beyond their control.

FAQs:

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

A1. Form GST TRAN-1 is a form used for claiming transitional credit under the GST regime. It allows taxpayers to carry forward their unutilized input tax credit from the previous tax regime (VAT, Service Tax, etc.) to the GST regime.

Q2. Why did the court direct the Revenue to reopen the GST portal or accept the form manually?

A2. The court recognized that the petitioner had made genuine efforts to file Form GST TRAN-1 on the last date but was unable to do so due to technical issues with the GST portal. To uphold principles of natural justice and prevent hardship, the court directed the Revenue to provide an opportunity for the petitioner to claim the transitional credit.

Q3. What is the significance of this judgment?

A3. This judgment upholds the principles of natural justice and prevents hardship to taxpayers due to technical glitches beyond their control. It also sets a precedent for Revenue authorities to accommodate taxpayers who faced genuine difficulties in meeting deadlines due to system failures or technical issues.

Q4. Can other taxpayers who missed the deadline for filing Form GST TRAN-1 also seek relief based on this judgment?

A4. While this judgment is specific to the petitioner’s case, other taxpayers who faced similar genuine difficulties due to technical issues with the GST portal may be able to seek relief from the courts based on the principles established in this judgment. However, each case would be evaluated based on its specific facts and circumstances.

Heard Sri Archi Agrawal, learned counsel for the petitioner, Sri R.C. Shukla and Shri Devendra Gupta, learned counsel for the respondents.

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 30.04.2019.

Order Date :- 28.3.2019