2019 (12) TMI 1084 - HC - GST

Court permits revision of forms, upholds tax credits, emphasizes electronic filing for efficiency and verification.

LARSEN AND TOUBRO LIMITED Versus UNION OF INDIA, THE COMMISSIONER, STATE GOODS AND SERVICES TAX DEPT, GOVERNMENT OF KERALA, THE GST COUNCIL, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THE PRINCIPAL COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, CENTRAL REVENUE, GOODS AND SERVICES TAX NETWORK, THE NODAL OFFICER, GOODS AND SERVICES TAX NETWORK, THE JOINT COMMISSIONER, PRINCIPAL NODAL OFFICER, CENTRAL TAX AND CENTRAL EXCISE, SUPERINTENDENT OFFICE OF THE CENTRAL TAX AND CENTRAL EXCISE, THE ASSISTANT COMMISSIONER, OFFICE OF THE PRINCIPAL COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, THE ASSISTANT COMMISSIONER (TECH)

The court allowed the writ petition, directing the respondents to permit the petitioner to revise the forms electronically or manually by a specified ... CENVAT Credit - carry forward the tax paid on purchase of goods during the VAT regime to the GST regime - migration to GST regime - Sections 139 to 143 of the Act and Rule 117 of the SGST Rules - HELD THAT:- Since it is not in dispute that the petitioner herein did attempt to upload the necessary details in the system maintained by the respondents, and it cannot be disputed, based on a perusal of the system log, that the petitioner did attempt to log into the system, the mere fact that the petitioner cannot establish that the inability to upload the required details or revise the same was on account of a system error that was occasioned by the respondents, cannot be a reason for denying him the substantive benefit of carrying forward the credit earned by him under the erstwhile regime. This writ petition is allowed by quashing the impugned communications, and directing the respondents to permit the petitioner to revise his TRAN-1 Forms either electronically or manually on or before 31.12.2019 - petition allowed. Issues:Transfer of tax credit from VAT regime to GST regime due to technical glitch in system resulting in denial of benefit to the petitioner.Analysis:The petitioner, an assessee under the Kerala Value Added Tax Act, migrated to the GST regime but faced a technical glitch while trying to carry forward tax credit from the VAT regime to the GST regime. The transition provisions governing the transfer of credit are Sections 139 to 143 of the CGST/SGST Act and Rule 117 of the SGST Rules. The petitioner had to file a declaration in Form GST TRAN-1 by 27.12.2017, which he attempted but failed due to a technical glitch. The respondents denied the transfer of credit citing non-compliance with procedural requirements before the cut-off date. The petitioner contended that his substantial rights under the GST Act should not be denied due to a technical lapse caused by the respondents. Attempts to revise the form post the deadline were also unsuccessful due to technical issues.The respondents maintained that they could ascertain if an assessee attempted to log into the system and whether the failure to upload details was due to a system error. The system log revealed that the petitioner did attempt to log in before the deadline, falling under a specific category. However, it needed to be established that the inability to upload details was due to a system error caused by the respondents.The court considered the submissions and found that the petitioner did attempt to upload necessary details, and the inability to establish a system error should not be a reason to deny him the benefit of carrying forward the tax credit. Referring to judgments from the Delhi High Court and the Himachal Pradesh High Court, which emphasized that accrued tax credits should not be denied due to procedural defects, the court allowed the writ petition. The court directed the respondents to permit the petitioner to revise the forms electronically or manually by 31.12.2019, without prejudice to the right of the authorities to verify the claim's genuineness. The respondents were instructed to facilitate electronic filing and resort to manual filing only if necessary, with verification of claims allowed without denial solely based on the filing date.