2021 (12) TMI 375 - HC - GST

Court orders submission of TRAN-1 Form, emphasizing taxpayer rights over procedural rules

The court allowed the writ petition, directing the respondents to permit the petitioner to submit the TRAN-1 Form either online by reopening the portal or ... Input Tax Credit - seeking permission to file TRAN-1 Form, either online or offline - Inaction on the part of the respondents in permitting the petitioner to submit the TRAN-1 Form under GST Act claiming for the input tax credit - vires of Rule 117 (1A) of CGST Rules - HELD THAT:- Given the authoritative decision rendered by the various High Courts in the country and also taking note of the fact that the husband of the petitioner who was the original proprietor having expired in the midst of introduction of the new GST regime on 20.09.2017 and the then compelling circumstances, and further because of the technical glitches and difficulties which the petitioner faced in the course of submission of TRAN-1 form, this Court also endorses the view taken by the various High Courts. Accordingly, this Court is inclined to allow the writ petition in similar terms as decided by the various High Courts. Reliance can be placed in the case of M/S. SUNNY MOTORS VERSUS CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS (CBIC), DEPARTMENT OF REVENUE, GOVT. OF INDIA AND OTHERS [2021 (9) TMI 907 - ORISSA HIGH COURT] where it was held that a direction is issued to the Opposite Parties to either open the portal and permit the Petitioner to file TRAN-1 form electronically on or before 1st November, 2021 or accept the TRAN-1 Form from the Petitioner manually before that date. It will be open to the authorities to verify the genuineness of the claim of the Petitioner in accordance with law and pass appropriate orders. This Court directs the respondents to permit the petitioner either submit the TRAN-1 Form online by opening of the portal or permit to submit the TRAN- 1 Form manually and thereafter to process the assessees claim for grant of the input tax credit at the earliest. Let this exercise be completed by the respondents within a period of 60 days from the date of receipt of copy of this order. Petition allowed. Issues Involved:1. Inaction of respondents in permitting the petitioner to submit TRAN-1 Form under GST Act for input tax credit.2. Technical difficulties preventing the submission of TRAN-1 Form.3. Legal heirs' inexperience in handling the submission process.4. Respondents’ refusal to allow manual submission of TRAN-1 Form.5. Challenge to the validity of Rule 117 of the GST Rules.6. Precedents from other High Courts on similar issues.Detailed Analysis:1. Inaction of Respondents:The petitioner filed the writ petition due to the respondents' inaction in permitting the submission of the TRAN-1 Form under the GST Act for claiming input tax credit. The petitioner, a trader registered under the GST Act, was unable to submit the TRAN-1 Form within the prescribed deadlines due to the death of the proprietor and subsequent technical difficulties.2. Technical Difficulties:The petitioner attempted to submit the TRAN-1 Form multiple times but faced technical glitches. Despite an extension of the deadline by the GST Council to 31.03.2019, the petitioner was unable to upload the form due to these technical issues. The petitioner made representations to the Commissioner seeking permission to submit the form manually or by reopening the portal, but these were left undecided, leading to the filing of the writ petition.3. Legal Heirs' Inexperience:The legal heirs of the deceased proprietor took charge of the business and attempted to submit the TRAN-1 Form. However, their inexperience and the technical issues they encountered prevented the successful submission of the form. The petitioner's counsel argued that the failure to submit was beyond their control and requested another opportunity to submit the form.4. Respondents’ Refusal for Manual Submission:The respondents, during the pendency of the petition, passed an order on 16.08.2021 declining the petitioner's request. The respondents argued that the petitioner should file a fresh writ petition challenging this order and that the current petition was not sustainable without challenging Rule 117 of the GST Rules, which prescribes the deadline for submitting the TRAN-1 Form.5. Challenge to Rule 117:The respondents contended that without challenging Rule 117, the petitioner's claim could not be entertained. They also noted the absence of specific details and evidence regarding the attempts made to submit the form and the technical glitches faced, arguing that the petitioner's claim was not substantiated.6. Precedents from Other High Courts:The court referred to several precedents from various High Courts, including Kerala, Punjab & Haryana, Odisha, and Allahabad, which dealt with similar issues. These judgments emphasized that technical glitches should not deprive dealers of their statutory rights to input tax credit. The courts held that procedural rules should not defeat the right to input tax credit and that the authorities should assist assessees in overcoming technical difficulties.Conclusion:The court endorsed the views of other High Courts, recognizing the compelling circumstances faced by the petitioner due to the death of the proprietor and technical difficulties. The court directed the respondents to allow the petitioner to submit the TRAN-1 Form either online by reopening the portal or manually and to process the claim for input tax credit within 60 days. The writ petition was allowed and disposed of accordingly.