2020 (9) TMI 251 - HC - GST

Court Orders Respondents to Assist with Filing TRAN-1 Form, Emphasizes Practical Approach

The court directed the respondents to facilitate the filing of the TRAN-1 form either electronically or manually by a specified date, considering ... Reopening of GSTN portal to file the TRAN-1 form - transitional input credit - transition to GST regime - case of respondents is that there is no material on record to show that the petitioner herein has made any effort to get his form TRAN-1 uploaded in the GST web portal - HELD THAT:- There were exchange of letters in the year 2018 as well as in the year 2019, between the petitioner and respondents 1 and 2, with regard to the inability of the petitioner to upload form TRAN-1, due to freezing of portal or the portal not getting opened. In fact, the material filed along with the counter itself show that in the month of February, 2019 also the petitioner made a request to the Deputy Commissioner, GST Cell, Commissioner of Central Taxes, Tirupathi GST Commissionerate, Tirupathi, requesting him to take required action to re-open TRAN-1 as per the provisions of the GST law and circular instructions. Similar such letter was addressed to him on 11.2.2019, but there was no response till the order rejecting the request came to be passed. It is very clear that the petitioner did make efforts to get form TRAN-1 uploaded or in the alternative to accept the application manually and do the needful. Identical issue decided in the case of BHARGAVA MOTORS VERSUS UNION OF INDIA & ORS. [2019 (5) TMI 899 - DELHI HIGH COURT] and KUSUM ENTERPRISES PVT. LTD., SANKO GOSEI TECHNOLOGY INDIA PVT. LTD. VERSUS UNION OF INDIA & ORS. [2019 (7) TMI 945 - DELHI HIGH COURT] where the High Court disposed of the Writ Petition directing the respondents to either open the portal to enable the petitioner to again file form GST TRAN-1 electronically or in the alternative accept the form GST TRAN-1 presented manually on or before 30.9.2019 - Similar such view came to be taken by a Division Bench of this Court in LANTECH PHARMACEUTICALS LTD, SRIKAKULAM VERSUS THE PRL COMMISSIONER VISAKHAPATNAM [2019 (10) TMI 477 - ANDHRA PRADESH HIGH COURT]. Thus, it is not a case where the petitioner has not made any efforts in getting TRAN-1 form uploaded in the GST portal. Efforts were made in December, 2017 and thereafter in the years 2018 and 2019, which is evident from the communications referred to earlier. Therefore, non-filing of screenshots in our view cannot be a ground to reject the request on the ground that no effort was made, since the communication between the petitioner and the respondents is not in dispute - Further, question of preserving screenshots by everyone may not be possible having regard to the conditions prevailing in the country and also the facilities that are available for an uneducated assessee. As observed in UNINAV DEVELOPERS PVT. LTD. VERSUS UNION OF INDIA & ORS. [2019 (8) TMI 85 - DELHI HIGH COURT], the GST system is still in a trial and error phase and it will be too much of a burden to place on the Assessee to expect them to comply with the requirement of the law where they are unable to even connect to the system on account of network failures or other failures. As the petitioner could not upload the TRAN-1 form electronically due to technical snags and since Government of India has been extending the time regularly for submitting TRAN-1 forms, we feel that it is a fit case where the request of the petitioner can be considered - the Writ Petition is disposed of directing the respondents herein either to open the portal to enable the petitioner to again file GST TRAN-1 form electronically or in the alternative accept the GST TRAN-1 form manually on or before 30.9.2020. Once it is uploaded or submitted manually, the claim of the petitioner may be processed in accordance with law. Petition disposed off. Issues Involved:1. Petitioner's request to open the GSTN portal or allow manual submission of GST TRAN-1 form.2. Petitioner's inability to upload TRAN-1 due to technical issues.3. Respondents' claim of no evidence of the petitioner's attempts post-December 2017.4. Legal precedents on similar issues from various High Courts.5. Petitioner's continuous efforts and communication with authorities.6. Court's decision based on precedents and technical snags in the GST system.Issue-wise Detailed Analysis:1. Petitioner's Request to Open the GSTN Portal or Allow Manual Submission:The petitioner sought a writ of Mandamus to direct the respondents to open the GSTN portal and enable the filing of the TRAN-1 form to avail input tax credit of Rs. 79,77,785/- or alternatively, to permit manual submission of the form. The petitioner, a dealer of Hyundai cars, had a closing stock of vehicles and spare parts purchased from manufacturers on payment of eligible duties as on 30.6.2017, qualifying for credit under Section 140(3) of the CGST Act, 2017.2. Petitioner's Inability to Upload TRAN-1 Due to Technical Issues:The petitioner attempted to file TRAN-1 on 24.12.2017, but the portal was frozen or jammed. Despite several attempts and communications with the Deputy Commissioner of Central Tax, Kurnool Division, and other authorities, the petitioner could not upload the form. The petitioner also submitted details of technical problems faced in February 2019.3. Respondents' Claim of No Evidence Post-December 2017:The respondents argued that there was no material evidence showing the petitioner's efforts to upload TRAN-1 after December 2017. They claimed that the petitioner did not provide any proof of attempts to claim input tax credit post-December 2017.4. Legal Precedents on Similar Issues:The court referred to several judgments from various High Courts, including Garuda Packaging Pvt. Ltd. v. The Assistant Commissioner State Tax, Tara Exports v. The Union of India, Uninav Developers Pvt. Ltd. v. Union of India, Bhargava Motors v. Union of India, and others. These cases directed the respondents to either open the portal for filing TRAN-1 electronically or accept the form manually due to technical glitches.5. Petitioner's Continuous Efforts and Communication with Authorities:The petitioner made continuous efforts to communicate with the authorities regarding the inability to upload TRAN-1. Letters and requests were exchanged in 2018 and 2019, indicating persistent attempts to resolve the issue. The court acknowledged these efforts and noted that the petitioner's difficulty in uploading the form was genuine.6. Court's Decision Based on Precedents and Technical Snags:The court observed that the GST system was still in a 'trial and error phase' and that it would be unreasonable to expect the petitioner to comply with the requirements amidst technical failures. The court directed the respondents to either open the portal for the petitioner to file TRAN-1 electronically or accept the form manually by 30.9.2020. The petitioner's claim would then be processed in accordance with the law.Conclusion:The writ petition was disposed of with directions to the respondents to facilitate the filing of TRAN-1 either electronically or manually, considering the technical snags and continuous efforts made by the petitioner. The court emphasized the need for a practical approach in dealing with such issues, given the ongoing challenges with the GST system.