Case Law Details
Jay Bee Industries Vs. Union of India (Himachal Pradesh High Court)
It has been held that GST is a new progressive levy. One of the progressive ideal of GST is to avoid cascading taxes. GST Laws contemplate seamless flow of tax credits on all eligible inputs. The input tax credits in TRAN-1 are the credits legitimately accrued in the GST transition. The due date contemplated under the laws to claim the transitional credit is procedural in nature. Therefore, in view of the GST regime and the IT platform being new, it may not be justifiable to expect the users to back up digital evidences. Even, under the old taxation laws, it is a settled legal position that substantive input credits cannot be denied or altered on account of procedural grounds.
We have no reason to doubt the claim of the petitioner that it had made genuine efforts for filing the returns online, but such attempts failed because of technical glitch. We, however, make it clear that does this Court is not dealing with an issue whether the petitioner is entitled to input credit as claimed by it because that is a matter to be examined by the authorities. However, the issue is about the technical glitch in the system which either does not permit a rectification in a situation where a dealer may have, due to inadvertence, or a bonafide error, not correctly filled up a form or where the system, due to a limitation in the algorithm/software programme, did not accept the entries sought to be made by the dealer.
It has been judicially recognized that GST system is still in a “trial and error phase”, as far as its implementation is concerned and because of this the Courts had been approached by the dealers facing genuine difficulties in filing returns, claiming input tax credit through the GST portal. As a matter of fact, the Court acknowledged the procedural difficulties in claiming input tax credit in the TRAN-1 Form and the Court permitted the respondents “either to open the portal so as enable the petitioner to file the TRAN-1 electronically for claiming the transitional credit or accept the manually filed TRAN-1 and to allow the input credit claimed after processing the same, if otherwise eligible in law”.
A majority of the High Courts of the Country, have taken a judicial notice of the technical glitch in uploading the Form TRAN-1 and afforded opportunities to the petitioner(s) before them for uploading these Forms by approaching Nodal Offcers and some of the High Courts have also permitted the petitioner(s) to tender these forms manually.
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