2018 (9) TMI 1474 - HC - GST

Transitional GST input tax credit claim blocked by FORM TRAN-1 portal glitches; manual filing accepted, credit allowed after efforts shown

The dominant issue was whether transitional input tax credit could be denied solely because the assessee could not electronically file FORM TRAN-1 within ... Transitional credit in TRAN-1 - procedural compliance versus substantive right to input tax credit - facilitation of filing due to technical glitches / reopening of portal - government circular providing nodal officers and onus on taxpayers to prove non-filingTransitional credit in TRAN-1 - facilitation of filing due to technical glitches / reopening of portal - procedural compliance versus substantive right to input tax credit - government circular providing nodal officers and onus on taxpayers to prove non-filing - Petitioner's entitlement to file TRAN-1 electronically or have the manually filed TRAN-1 accepted and to be allowed transitional input tax credit, notwithstanding failure to complete online filing before the statutory due date due to technical glitches. - HELD THAT: - The petitioner made bona fide attempts to file TRAN-1 on the GSTN portal but was unable to complete filing before the due date and thereafter submitted a manual TRAN-1 which was returned with a direction to use the online portal. The Union Government issued Circular No. 39/13/2018-GST to address technical issues, contemplated appointment of nodal officers and placed the onus on taxpayers to provide evidence of non-filing due to technical glitches. The Court observed that GST aims to provide seamless flow of input tax credit and that denial of substantive credits on merely procedural grounds is not justifiable. Considering the petitioner's genuine efforts to file both online and manually, and the recognition in the Circular that grievances of this nature are legitimate, the Court directed respondents to either reopen the portal to enable electronic filing by the petitioner or accept and process the manually filed TRAN-1 of 31.01.2018 and allow the input credit if otherwise eligible in law. The relief was granted in the special facts of the case and the order is not to be treated as a precedent.Writ petition disposed by directing respondents to open the portal for electronic filing or accept the manually filed TRAN-1 dated 31.01.2018 and, after processing, allow the transitional input credit if eligible; order confined to the facts and not to be treated as precedent.Final Conclusion: The High Court directed the authorities to facilitate the petitioner's claim for transitional credit by reopening the portal for electronic TRAN-1 filing or by accepting and processing the manually filed TRAN-1 of 31.01.2018 and allowing the input credit if otherwise eligible in law; the order is passed on the special facts of the case and is not a precedent. Issues:- Petition seeking mandamus for re-opening online submission of GST TRAN 1 or manual acceptance- Technical glitches preventing timely filing- Efforts to address grievances through grievance redressal portal and manual filing- Circular issued by Government addressing technical issues and grievances- Comparison with relief granted by other High Courts- Recognition of genuine grievances by the Union Government- Justification for granting relief to the petitioner- Interpretation of GST laws and transitional credit provisions- Decision to grant relief to the petitionerAnalysis:The petitioner, a Company involved in importing, processing, trading, and exporting cashew nuts, sought a mandamus to direct the respondents to either re-open the online submission of GST TRAN 1 or accept the manually filed form to claim transitional credit under GST. The petitioner faced technical glitches on the GSTN portal, preventing timely filing before the due date of 27.12.2017. Despite attempts through the grievance redressal portal and manual filing on 31.01.2018, no resolution was achieved. The Government issued a circular to address technical issues, appoint Nodal Officers, and facilitate filing, but the petitioner claimed that no Nodal Officer was appointed. The petitioner cited decisions from various High Courts where relief was granted to taxpayers facing similar issues.The Court noted that relief had been granted in favor of aggrieved petitioners in other cases and acknowledged the genuine nature of the grievances faced by taxpayers. The circular by the Union Government recognized the challenges faced by taxpayers and provided guidelines for those who attempted to file before the due date. The Court emphasized the importance of transitional credits in the GST regime and highlighted that procedural grounds should not deny legitimate credits accrued during the transition. Considering the petitioner's genuine efforts to file returns both online and manually, the Court deemed it appropriate to grant the relief sought.In conclusion, the Court disposed of the writ petition by directing the respondents to either re-open the portal for electronic filing of TRAN 1 or accept the manually filed form dated 31.01.2018. The Court instructed the authorities to process the input credits if found eligible in law. The decision was based on the special circumstances of the case and was not intended to set a precedent. No costs were awarded in this matter.