Authorities must facilitate GST ITC-01 upload despite portal glitch for legitimate input tax credit claims under Section 18(1)(c)

Gujarat HC directed authorities to facilitate petitioner's upload of Form GST ITC-01 for claiming input tax credit under Section 18(1)(c) of GST Acts. Court found both parties at fault - department failed to resolve technical glitch in GSTN portal despite multiple attempts, while petitioner used wrong offline tool. HC held technical portal issues should not deprive legitimate ITC claims and ordered department to complete the process within six weeks. Application disposed of with directions.

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Issues Involved:
1. Entitlement to claim Input Tax Credit (ITC) under Section 18(1)(c) of the GST Act.
2. Technical glitches in the GST portal preventing the upload of Form GST ITC-01.
3. Use of an incorrect offline tool for filing Form GST ITC-01.
4. Departmental response and actions regarding the technical issues and ITC claim.

Detailed Analysis:

1. Entitlement to Claim Input Tax Credit (ITC) Under Section 18(1)(c) of the GST Act:
The writ applicant, a proprietary concern, sought to claim ITC on goods held in stock as of the transition date by filing Form GST ITC-01, following the cessation of the composition scheme under Section 10 of the GST Act. The applicant was initially eligible for the composition scheme until 31st March 2018 and opted out effective 1st April 2018. Consequently, the applicant became entitled to claim ITC under Section 18(1)(c) of the GST Act. The conditions for claiming such ITC are stipulated in Rule 40 of the Central/Gujarat Goods and Services Tax Rules, 2017.

2. Technical Glitches in the GST Portal Preventing the Upload of Form GST ITC-01:
The applicant attempted to upload Form GST ITC-01 within the extended time limit as per Notification No.42/2018-Central Tax dated 4th September 2018. However, due to technical issues on the GST portal, the form could not be uploaded, despite multiple attempts and requests to the concerned authorities. The Assistant Commissioner of State Tax acknowledged receiving the ITC-01 in a CD and other records, but was unable to upload the form due to the technical glitch in the GSTN portal.

3. Use of an Incorrect Offline Tool for Filing Form GST ITC-01:
The respondent's affidavit-in-reply indicated that the applicant used the wrong offline tool for filing Form GST ITC-01. The affidavit clarified that the tool used by the applicant was for filing returns and not for ITC-01. The screenshot provided by the applicant showed the use of an offline tool version 2.2.3, which was not the correct version for ITC-01. The correct version was ITC_Offline_v1.0, released on 12th January 2018. This mistake contributed to the failure in uploading the form.

4. Departmental Response and Actions Regarding the Technical Issues and ITC Claim:
The department's affidavit acknowledged the applicant's attempts and the technical issues faced. However, it was also noted that the applicant used an incorrect tool, which compounded the problem. Despite this, the court emphasized that a technical glitch should not deprive the applicant of their rightful ITC claim. The court directed the respondents to find a solution to allow the applicant to upload the correct form and claim the ITC worth approximately Rs. 5 lakh. The department was instructed to complete this process within six weeks from the date of receipt of the court's order.

Conclusion:
The court recognized the applicant's entitlement to claim ITC under Section 18(1)(c) of the GST Act and acknowledged the technical issues that prevented the upload of Form GST ITC-01. Despite the applicant's use of an incorrect offline tool, the court directed the department to facilitate the upload of the correct form and ensure the applicant could claim the ITC. The judgment highlighted the importance of resolving technical issues to uphold the applicant's rights and directed the department to complete the necessary actions promptly.

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