Court allows construction service provider to claim Input Tax Credit manually under GST due to technical errors

The court directed the respondents to allow the petitioner, a construction service provider, to claim Input Tax Credit under GST manually due to technical errors and delays in processing. The petitioner's request to accept TRAN-1s Return manually was granted, following a previous judgment for similar relief. The court emphasized the financial impact of denying the credit, directing the petitioner to claim the unutilized credit in GSTR-3 forms manually. Additionally, an extension was granted for filing manual returns in line with previous decisions, without imposing costs on the petitioner.

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Issues:
1. Input Tax Credit under GST not credited due to technical error and delay.
2. Petitioner seeking directions to accept TRAN-1s Return manually.
3. Reference to previous judgment for similar relief.
4. Dispute over unutilized credit and financial impact.
5. Extension of date for filing manual returns.

Issue 1: Input Tax Credit not credited due to technical error and delay.
The petitioner, a construction service provider, filed a writ petition seeking the credit of Input Tax Credit under GST as per Section 140 of the CGST Act, 2017. The petitioner claimed to have filed the TRAN-1s Return on time but faced technical errors and delays in processing by the tax authorities. The petitioner argued that despite submitting the return, it showed as "PROCESSED WITH ERROR," hindering the carry-forward of credit accrued under previous taxing statutes into the GST regime.

Issue 2: Petitioner seeking directions to accept TRAN-1s Return manually.
The petitioner requested the court to direct the respondents to credit the Input Tax Credit manually and accept the TRAN-1s Return. The petitioner highlighted the non-receipt of any response from the tax department and the unavailability of the GST Portal for filing the return, leading to the inability to carry forward the input tax credit. The petitioner also cited a previous judgment for similar relief, emphasizing the necessity to permit the filing or revision of incorrect TRAN-1s electronically or manually.

Issue 3: Reference to previous judgment for similar relief.
The petitioner referred to a previous judgment in a similar case where directions were issued to permit the filing or revision of incorrect TRAN-1s. The petitioner urged the court to follow the precedent and direct the respondents to allow the petitioner to claim the unutilized credit to avoid a severe financial crisis, as highlighted in the previous judgment from another High Court.

Issue 4: Dispute over unutilized credit and financial impact.
The petitioner argued that the denial of the unutilized credit would result in a significant financial burden, requiring cash payments amounting to Rs. 37 crores. The petitioner stressed the importance of reflecting the credit in GSTR-3 to ensure the availability of credit for the entire duration, both transitional and post-GST credit. The court directed the respondents to allow the petitioner to fill the GSTR-3 form manually to claim the credit, subject to the final outcome of the proceedings.

Issue 5: Extension of date for filing manual returns.
Considering the extension of the deadline for filing or revising incorrect TRAN-1s, the court allowed the writ petition in line with a previous judgment, directing the respondents to permit the petitioner to file or revise the TRAN-1s electronically or manually before the extended deadline. The court further instructed the petitioners to claim the unutilized credit in their GST-3B forms for January 2020 either electronically or manually, without imposing any costs.

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