2020 (3) TMI 979 - HC - GST

Court orders verification of transitional credit claim due to technical glitches

The Court directed the jurisdictional officer to verify the petitioner's claim for transitional credit under Section 140(1) of the Central Goods and ... Transitional credit of CENVAT and service tax - filing/uploading of Form GST TRAN-1 - technical glitches on GST portal - extension of time under Rule 117(1A) and Order No. 01/2020-GST - verification by the jurisdictional officer - Section 140(1) read with Rule 117Transitional credit of CENVAT and service tax - Section 140(1) read with Rule 117 - Petitioner entitled to carry forward credit of CENVAT and service tax as available on 30th June 2017 under the transitional provisions. - HELD THAT: - The Court held that Section 140(1) of the Central Goods and Services Tax Act, 2017 read with Rule 117 of the CGST Rules, 2017 entitles the petitioner to the transitional credit of CENVAT and service tax as available on the day immediately preceding the appointed day. Reliance on coordinate-bench decisions and clarifications was noted to show that the right to carry forward such credit is a legitimate right and that the due date in Rule 117 is procedural in nature and should not operate to deny the substantive right to credit where filings were prevented by factors such as portal-related technical difficulties. Applying these principles to the facts, the Court concluded that the petitioner is entitled to claim the transitional credit as on 30th June 2017. [Paras 10]Petitioner entitled to claim transitional credit of CENVAT and service tax as on 30th June 2017 under Section 140(1) read with Rule 117.Technical glitches on GST portal - extension of time under Rule 117(1A) and Order No. 01/2020-GST - filing/uploading of Form GST TRAN-1 - verification by the jurisdictional officer - Where inability to upload Form GST TRAN-1 was due to technical glitches and after representations, the jurisdictional officer must verify the claim and permit filing/uploading of TRAN-1 within the extended period. - HELD THAT: - The Court found on the record that the petitioner was unable to upload Form GST TRAN-1 due to technical difficulties and that representations to the authorities had not produced relief. The Court noted Order No. 01/2020-GST extending the period for submitting GST TRAN-1 till 31st March 2020 for cases where due inability to file on account of technical difficulties was established. In view of these facts and the entitlement to transitional credit, the Court directed respondent No.4 (the jurisdictional officer) to verify the genuineness of the petitioner's claim and, upon such verification, permit the petitioner to file/upload Form GST TRAN-1. The Court fixed a timeline for completion of verification and for enabling upload so as to fall within the extended period. [Paras 9, 11, 12, 13]Respondent No.4 directed to verify the petitioner's claim and permit uploading of Form GST TRAN-1 within two weeks of receipt of the writ so the petitioner may upload TRAN-1 on or before 31st March 2020.Final Conclusion: Writ petition allowed to the extent that the petitioner is recognised as entitled to transitional CENVAT and service tax credit as on 30th June 2017; respondent No.4 is directed to verify the claim and permit filing/uploading of Form GST TRAN-1 within two weeks so as to enable upload on or before 31st March 2020; rule made absolute to that extent. Issues:Claim for transitional credit under Section 140 of the Central Goods and Services Tax Act, 2017 due to technical glitches in uploading form GST TRAN-1.Analysis:The petitioner, a limited company registered under the Companies Act, 1956 and the Central Goods and Services Act, 2017, sought relief to claim transitional credit under Section 140 of the Act for excise duty and service tax amounts. The petitioner faced technical glitches preventing the upload of form GST TRAN-1, despite efforts to rectify the issue through the GST Department and Nodal Officer. The petitioner contended its entitlement to credit under Section 140(1) of the Act, 2017 read with Rule 117 of the Rules 2017. Citing a previous case, the petitioner argued for the right to carry forward CENVAT credit as a legitimate entitlement, crucial for business continuity and protected under Article 19(1)(g) of the Constitution of India.The petitioner emphasized the need for the respondents to consider its case, verify the credit availability as of 1st July 2017, and enable the upload of form GST TRAN-1 by the specified deadline. The respondents, represented by learned standing counsel, refuted technical glitches and assured verification of the petitioner's claim for transitional credit. Acknowledging the petitioner's inability to upload form GST TRAN-1 due to technical issues and the legal entitlement to claim credit under Section 140(1) of the Act, the Court directed the jurisdictional officer to verify the credit claims and facilitate the form's upload on the GST portal.Relying on the order No. 01/2020-GST dated 7th February 2020, extending the deadline for submitting declarations in form GST TRAN-1, the Court mandated respondent No. 4 to complete verification promptly. The Court instructed respondent No. 4 to allow the petitioner to upload form GST TRAN-1 within two weeks from the order's receipt, ensuring compliance with the extended deadline of 31st March 2020. With these directives, the petition was disposed of, and the rule was made absolute, permitting direct service.