Court Orders Portal Reopening or Manual Submission for GST Forms by 01/06/2020, Acknowledges Taxpayer Challenges.

The HC directed the respondents to reopen the online portal or accept manual submissions of Forms GST TRAN-1 and TRAN-2 by 06.01.2020, addressing the technical glitches and misleading language issues. The Court mandated processing of Petitioners' claims per legal provisions, allowing the petitions and acknowledging the challenges faced by taxpayers.

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Issues Involved:
1. Inability to claim input tax credit on eligible goods under Section 140 of the CGST Act read with Rule 117 of the CGST Rules.
2. Challenge to the conditions under Rule 120A of the CGST Rules as ultra vires the CGST Act.
3. Extension of the time period for submitting revised declarations under Form GST TRAN-1 and TRAN-2.
4. Technical glitches and difficulties faced in filing Form GST TRAN-1 and TRAN-2.
5. Misleading language in Form GST TRAN-1 and TRAN-2 leading to confusion among taxpayers.

Issue-wise Detailed Analysis:

1. Inability to Claim Input Tax Credit:
The Petitioners, registered under the CGST Act, were unable to claim input tax credit on various eligible goods due to technical glitches and difficulties faced during the filing process. The government extended the filing period for TRAN-1 several times, ultimately until 27.12.2017. However, Petitioners faced issues when attempting to submit a declaration under Form GST TRAN-2 after the deadline, encountering errors on the GST portal.

2. Challenge to Rule 120A Conditions:
The Petitioners sought a writ declaring the conditions under Rule 120A of the CGST Rules as ultra vires the CGST Act, arguing that it restricted the power of revision of GST TRAN-1. They requested an extension of the time period for submitting the revised declaration to claim input tax credit on goods held in stock without available invoices/duty paying documents.

3. Extension of Time Period for Revised Declarations:
Petitioners requested an extension of the time period for filing revised GST TRAN-1 and to be allowed to manually file a revised GST TRAN-1 under Rule 120A for cases where invoices were not available. The Court noted that the last date for filing the revised declaration coincided with the last date for filing the original declaration, rendering the provision for revision ineffective. It was necessary to stipulate a date for revision beyond the original filing date to allow for error correction.

4. Technical Glitches and Difficulties:
The Petitioners faced technical glitches on the GST portal, preventing them from filing the requisite forms within the deadline. Despite multiple extensions, many taxpayers could not meet the extended deadline due to these issues. The Court acknowledged the technical difficulties and human errors, granting relief to Petitioners in similar situations in previous cases.

5. Misleading Language in Forms GST TRAN-1 and TRAN-2:
The Court found that the language in Forms GST TRAN-1 and TRAN-2 was misleading, causing confusion among taxpayers. Petitioners, registered as manufacturers and not traders, were under the impression that Form GST TRAN-2 was to be used for goods without available invoices/duty paying documents. They attempted to submit a declaration under Form GST TRAN-2 but faced errors due to not filling in the details in Form GST TRAN-1 by the deadline.

Judgment:
The Court directed the respondents to either open the online portal to enable Petitioners to file Forms GST TRAN-1 and TRAN-2 electronically or accept them manually by 06.01.2020. The respondents were instructed to process Petitioners’ claims in accordance with the law once the forms were filed. The petitions were allowed on these terms, recognizing the confusion caused by the misleading language in the forms and the technical glitches faced by taxpayers.

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