TaxTMI 
TaxTMI 
2024 (10) TMI 670
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....bility of filing such form electronically due to serious functionality issues plaguing the department's portal. 4. Mr. Paranjape, the learned counsel for the Petitioner, submits that the Petitioner, for the period between September 2017 and November 2017, had correctly availed input tax credit ("ITC") of Rs. 18,30,58,995/-. However, during the said period, the Respondents did not make the facility of filing Form GST ITC - 02 electronically available. Therefore, the Petitioner wrote to the Respondents seeking a leave to file the said Form manually. The Petitioner filed the form manually. 5. Mr. Paranjape submits that after almost six years, the Petitioner was served with the impugned show cause notice dated 17 August 2023 alleging that the Petitioner had wrongly availed and utilised the input tax credit of Rs. 18,30,58,995/- on the sole ground that the transfer of the said ITC had been availed by the Petitioner by filing the Form GST ITC-02 manually instead of electronically. 6. Mr Paranjape submits that there is no dispute about the department's portal not being functional enough to accept the filing of Form GST ITC-02 electronically during the relevant period. Therefore, he sub....
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....1. Mr Mishra submitted that the impugned show cause notice was intra vires; therefore, no case was made to interfere with the same. He submitted that it was open to the Petitioner to raise all permissible defences in response to the impugned show cause notice. Still, there was no case for quashing the impugned show cause notice because the same was intra vires and following the requirements of Rule 41 of the CGST Rules. 12. Mr. Mishra submitted that this Petition may be dismissed for the above reasons. 13. Rival contentions now fall for our determination. 14. The Petitioner, a Company registered under the provisions of the Companies Act, 1956, is registered under the Central Goods and Services Tax Act, 2017 (CGST Act") with GSTIN 27AAACM6427C1ZR. The Petitioner is engaged, inter alia, in providing internet services across India from various States, including the State of Maharashtra. 15. On 17 August 2017, the Petitioner entered into a Business Transfer Agreement ("BTA") with Tikona Digital Networks ("TDN"), in which the TDN business was transferred to the Petitioner as a going concern. On 22 September 2017, TDN filed a letter dated 13 September 2017 with the jurisdictional Ass....
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....osing to recover and demand the ITC of Rs. 18,30,58,995/-with interest and penalty on the alleged ground of wrongful availment of ITC. The Petitioner submitted replies dated 17 May 2023 and 18 May 2023 to the Audit Notice dated 28 April 2023 manually and electronically. The Petitioner, inter alia, explained that during the relevant period, Form ITC-02 was not functional or available on the department's portal. Therefore, TDN and the Petitioner had manually submitted the same. Full particulars were provided along with the replies dated 17 May 2023 and 18 May 2023. Additional written submissions were submitted in response to the Audit Note dated 28 April 2023. 20. On 17 August 2023, the second Respondent issued the impugned show cause notice proposing that the ITC of Rs. 18,30,58,995/- be recovered from the Petitioner with interest and penalty. Hence the present Petition. 21. Section 18 (3) of the CGST Act provides that where there is a change in the constitution of a registered person on account of sale, merger, demerger, amalgamation, lease or transfer of the business with the specific provisions for transfer of liabilities, the said registered person shall be allowed to transfer....
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....and utilising the credit of Rs. 18,30,58,995/- did not ensure that the prescribed Form GST ITC-02 was filed "electronically on the common portal" along with a request for transfer of unutilised input tax credit lying its electronic credit ledger to the transferee. Thus, the only allegation in the impugned show cause notice is about non-filing Form GST ITC-02 electronically on the department's common portal. 24. The allegation in the impugned show cause notice might have had some substance if it had been the Respondents' case that its common portal was fully functional and TDN or the Petitioners could file Form GST ITC-02 electronically on the common portal. However, it was conceded that the GST portal was nascent during the relevant time, and GST ITC-02 was not available for filing electronically. Thus, neither the Petitioner nor TDN could be faulted for not filing Form GST ITC-02 electronically on the department's common portal. The record establishes, and in any event, it was not disputed, that TDN or the Petitioner couldn't file Form GST ITC-02 on the department's common portal during the relevant period because of the functionality issues relating to such a common port....
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....cation/letter dated 22 September 2017, informed the jurisdictional Assessing Authority about the non-availability of Form GST ITC-02 functionality on the department's common portal. Besides, full details and particulars of the BTA were furnished to the Assessing Authority. Lest there be any dispute about the BTA containing specific provisions for the transfer of liabilities, the Chartered Accountant's certificate dated 09 February 2018 was also filed certifying that the transfer of business from TDN to the Petitioner was done with the specific provision for the transfer of liabilities. Only after all these procedures were complied with did the Petitioner availed of and utilised the ITC of Rs. 18,30,58,995/-. 29. In any event, if the Respondents had any issues with the manual filing of Form GST ITC-02 or GSTR-3B, the Respondents could have always processed the forms and decided on the issue of ITC that the Petitioner could have availed and utilised. The Respondents could not have avoided processing the manual return or the manual filing on the specious plea that Section 18 (3) of the CGST Act and Rule 41 (1) of the CGST Rules recognise only electronic filing and not manual filing. ....
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....he impugned order. He submits that the averment of the petitioner to the effect that the objections have not been considered is ill founded inasmuch as the impugned order records that the objections have been filed and despite opportunity having been afforded to the petitioner for personal hearing, the same was not availed by the petitioner. No irregularity or illegality can be attributable to the impugned order and the same is liable to be sustained. Be that as it may, we find that the petitioner has been non suited on the ground that Form ITC-02 for transfer of input tax credit was not available on the GST Portal which was in nascent stage during the initial months after its implementation on 01.07.2017 and it was incumbent upon the petitioner to have raised a proper grievance on the GST portal help-desk and ought to have waited for the relevant Form to go live on the GST portal instead of making illegal adjustment by use of the Form GSTR-3B of the transferor and the transferee company and mere shortage of working capital cannot be an excuse to bypass the legal procedure laid down under the law. We are of the view that the stand of the Respondent No. 2, for rejecting the....
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....ame effective on 16 April 2019. The Petitioner claimed to have uploaded a manual copy and submitted the same to the Deputy Commissioner, CTO Ward, A-Circle Udaipur, on 14 May 2019, but the same was not accepted. The Petitioner also raised this issue with the GST Helpdesk, but there was no effective response. 36. The Division Bench of the Rajasthan High Court noted that though the learned counsel representing the Respondents - GST Department, vehemently and fervently opposed the Petitioner's contention, he was not in a position to dispute the fact that Form GST ITC-02A was not available on the GSTN Portal within the stipulated period of 30 days from the date of registration of the Petitioner's new business vertical and hence, the Petitioner was genuinely and bona fide prevented from uploading the same. No dispute was raised about the Petitioner manually submitting the form to the Deputy Commissioner within 30 days. 37. The Division Bench of the Rajasthan High Court, after taking cognisance of the above admitted factual position, firmly opined that the impugned action by which the Respondents had failed to acknowledge and transfer the input tax credit to the tune of Rs. 2,58,03,590....