2019 (12) TMI 1001 - HC - GST

Court orders respondents to open portal for Form TRAN-1 filing, process Input Tax Credit claim promptly.

The court allowed the petition, directing the respondents to open the online portal for filing Form TRAN-1 electronically or accept manual filing by a ... Transitional input tax credit under Section 140 - filing and rectification of Form GST TRAN-1 due to technical glitches - acceptance of manually filed TRAN-1 or reopening of GST portal as remedial relief - credit in favour of assessee as property under Article 300AFiling and rectification of Form GST TRAN-1 due to technical glitches - acceptance of manually filed TRAN-1 or reopening of GST portal as remedial relief - Direction to enable the petitioner to claim transitional credit by reopening the portal for TRAN-1 or by accepting a manually filed TRAN-1 and thereafter processing the claim in accordance with law. - HELD THAT: - The Court found the petitioner's inability to upload Form GST TRAN-1 attributable to bona fide difficulties arising from technical glitches on the GST portal and observed that similar factual situations have been remedied in earlier decisions of the Court. The respondents' publication of an extended date for TRAN-1 filing (Notification No.49/2019) was noted as recognition of systemic problems affecting many taxpayers. Having regard to the trial-and-error state of the GST system and the impracticality of expecting all affected taxpayers to preserve contemporaneous evidence of failed uploads, the Court directed respondents to either reopen the online portal to permit electronic filing of TRAN-1 or to accept the manually filed TRAN-1 and process the petitioner's claim in accordance with law on or before 31.12.2019. [Paras 8, 9, 11]Respondents directed to open the portal to permit electronic re-filing of FORM TRAN-1 or to accept a manually filed TRAN-1 and thereafter process the claim in accordance with law by 31.12.2019.Transitional input tax credit under Section 140 - credit in favour of assessee as property under Article 300A - The input tax credit standing in favour of an assessee is recognised as property and cannot be extinguished except by authority of law; therefore denial of the transitional credit without lawful basis is impermissible. - HELD THAT: - The Court held that the credit standing in favour of an assessee constitutes 'property' within the meaning of Article 300A of the Constitution and that no law was shown which extinguishes such right. Consequently, respondents could not deprive the petitioner of the transitional credit merely on the ground that the portal filing was not completed, particularly where systemic deficiencies impeded filing and relief mechanisms (including extension notifications) acknowledged such difficulties. [Paras 10]Acknowledged that the transitional input tax credit is a proprietary right protected by Article 300A and cannot be denied without authority of law.Final Conclusion: Petition allowed: respondents directed to open the online portal to permit electronic filing of Form GST TRAN-1 or to accept the manually filed TRAN-1 and process the petitioner's transitional credit claim in accordance with law on or before 31.12.2019. Issues Involved:1. Request to open the portal or accept the manually filed TRAN-1 form.2. Challenge to Rule 117 of the CGST Rules, 2017 and Form GST TRAN-1 as ultra vires.3. Request to restrain respondents from taking coercive measures.4. Challenge to Section 164 of the CGST Act, 2017 as unconstitutional.5. Claim for legitimate Input Tax Credit.6. Quashing of Circular No. 39/13/2018 dated 03.04.2018.7. Declaration that Rule 117 of GST Rules is ultra vires.8. Other miscellaneous reliefs.Detailed Analysis:1. Request to open the portal or accept the manually filed TRAN-1 form:The petitioner sought a direction for the respondents to either open the portal to enable the filing of TRAN-1 forms electronically or accept the manually filed TRAN-1 form. The petitioner faced technical difficulties while filing the TRAN-1 form due to low bandwidth and technical glitches, which prevented the submission before the deadline. Despite communicating these issues to the respondents, no resolution was provided. The court acknowledged these difficulties and referred to previous judgments in similar cases, such as M/s Blue Bird Pure Pvt. Ltd vs Union of India, which granted relief by directing the respondents to either open the portal or accept manually filed forms.2. Challenge to Rule 117 of the CGST Rules, 2017 and Form GST TRAN-1 as ultra vires:The petitioner argued that Rule 117 and Form GST TRAN-1 were ultra vires to Section 40(5) and Section 164 of the CGST Act, 2017, and violated Articles 14, 265, and 300A of the Constitution of India. The court did not find it necessary to delve into this issue in detail as the primary relief sought was the acceptance of TRAN-1 forms, which was addressed by referring to previous judgments.3. Request to restrain respondents from taking coercive measures:The petitioner requested the court to restrain the respondents from taking any coercive measures against them. This request was tied to the primary relief sought regarding the filing of TRAN-1 forms. The court did not specifically address this issue separately but implied that no coercive measures should be taken until the primary relief is resolved.4. Challenge to Section 164 of the CGST Act, 2017 as unconstitutional:The petitioner contended that Section 164 of the CGST Act, 2017, suffered from excessive delegation and was unconstitutional. This issue was not pressed further by the petitioner once the court indicated that it would address the primary relief sought.5. Claim for legitimate Input Tax Credit:The petitioner claimed entitlement to Input Tax Credit (ITC) amounting to Rs. 8,23,002/- and argued that they should not be deprived of this credit due to technical issues. The court recognized the petitioner's genuine difficulty in filing TRAN-1 and directed the respondents to either open the portal or accept the manually filed TRAN-1, ensuring the petitioner’s claim for ITC is processed in accordance with the law.6. Quashing of Circular No. 39/13/2018 dated 03.04.2018:The petitioner sought to quash Circular No. 39/13/2018 to the extent that it did not include all dealers for filing TRAN-1. The court did not specifically address this issue separately but implied that the relief granted would cover the petitioner's concerns regarding the circular.7. Declaration that Rule 117 of GST Rules is ultra vires:The petitioner argued that Rule 117 of the GST Rules, which provided a time limit for filing TRAN-1, was ultra vires and contrary to Section 140 of the GST Act. The court did not specifically rule on this issue but granted relief by directing the respondents to accept the TRAN-1 form, thereby addressing the petitioner's concerns.8. Other miscellaneous reliefs:The petitioner sought other miscellaneous reliefs, including dispensing with the service of advance notice and filing certified copies of documents. The court did not specifically address these requests but implied that the primary relief granted would cover the petitioner's concerns.Conclusion:The court allowed the petition and directed the respondents to either open the online portal to enable the petitioner to file the Form TRAN-1 electronically or accept the same manually on or before 31.12.2019. The respondents were instructed to process the petitioner’s claim in accordance with the law once the Form GST TRAN-1 is filed. The petition was allowed in these terms.