Ratek Pheon Friction Technologies Private Limited Vs Principal Commissioner (Allahabad High Court)
HC held that Clear intent of the legislature is to grant benefit of CENVAT and ITC under the pre-existing laws, as may have been carried forward on the appointed date 01.07.2017. In such circumstances, if the GST Portal had worked seamlessly, all petitioners would have submitted/revised/re-revised electronically, their Forms GST TRAN-1 and/or TRAN-2 within the time granted. In that situation, all petitioners would clearly be entitled to avail ITC under the CGST Act and the UPGST Act, without any objection by the State/revenue authorities. Taxing statute and equity considerations are not natural allies. At the same time, in the context of a purely procedural requirement and transition provision, we cannot act unmindful of that consequence – if the respondents had offered a functional system, the State could not have deprived the petitioners of transition credit of CENVAT and ITC (under the repealed laws).
Thus, we have no hesitation in observing that a reasonable opportunity ought to have been granted to all “registered persons”/taxpayers to submit/revise/re-revise electronically their Form GST TRAN-1/TRAN-2.
For the reasons given above, we allow all the writ petitions with the following directions:
(i) All petitioners before this Court may first file physical Form GST TRAN-1/TRAN-2 before their respective jurisdictional authority, within a period of four weeks from today.
(ii) That jurisdictional authority shall then make a report in writing on the same, as to compliances contemplated under Section 140 of the CGST Act and Rule 117 of the CGST Rules.
(iii) In case, no objection be taken, a report to submit/revise/re-revise the Form GST TRAN-1/TRAN-2 electronically, would be made by the concerned jurisdictional authority, within a period of two weeks.
(iv) In the event of any objection arising, one limited opportunity may be given to that petitioner to correct or revise or re-revise the physical Form GST TRAN-1/TRAN-2. That exercise may be completed within a period of three weeks and the report be submitted accordingly.
(v) Upon completion of that exercise, the jurisdictional authority shall forward his report along with said physical GST TRAN-1/TRAN-2 to the GST Network, within a further period of one week, with a copy of that communication to the petitioner concerned, through Email or other approved mode. No form submitted in compliance of this order would be rejected/declined as filed outside time.
(vi) The GST Network shall thereupon either itself upload the GST TRAN-1/TRAN-2, within two weeks of receipt of such communication or allow that petitioner opportunity to upload those details, within a reasonable time.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Mr Shubham Agarwal, Mr Nishant Mishra, Mr Praveen Kumar, Mr Suyash Agarwal, Mr Rahul Agarwal, Mr Rishi Raj Kapoor, Mr Ayush Khanna, Mr Harsh Vardhan Gupta, Mr Vishwjit, Mr Krishnaji Khare, Mr Vinayak Mithal, Mr Pranjal Shukla, Ms Sanyukta Singh and Ms Pooja Talwar for the petitioners; Mr Manish Goyal, learned Additional Advocate General, assisted by Mr Apurva Hajela, Mr A.C. Tripathi, Mr B.P. Singh Kachhawah and Mr Manoj Kumar Kushwaha for the State; Mr Shashi Prakash Singh, learned Additional Solicitor General of India, assisted by Mr Sudarshan Singh, Mr Krishna Ji Shukla, Mr Anant Kumar Tiwari, Mr Rajesh Tripathi, Mr Ishan Shishu and Mr. Manoj Kumar Singh for the Union of India and; Mr Ramesh Chandra Shukla, Mr Ashok Singh, Mr Parv Agarwal, Mr Dhananjai Awasthi, Mr Krishna Agarwal, Mr Gaurav Mahajan, Mr Amit Mahajan, Mr Ankur Agarwal and Mr B.K. Singh Raghuvanshi, for the CGST authorities.
2. This batch of writ petitions has been filed seeking relief in the nature of mandamus commanding the respondent authorities to allow the petitioners to submit/revise/re-revise electronically, their respective declarations on Form GST TRAN-1 and GST TRAN-2, under the provisions of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’) and, the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘UPGST Act’), to carry forward the CENVAT and VAT Input Tax Credit, under the CGST Act , 2017 and the U.P. GST Act, 2017. No other relief has been pressed at the hearing.
3. On facts, broadly there are three types of cases. First, some of the petitioners claim, they had submitted electronically, the Form GST TRAN-1 and/or TRAN-2 (on the GST Portal), within time, but errors had crept in that Form so submitted. They attempted to correct/revise that Form GST TRAN-1 and/or TRAN-2 on the GST Portal within time granted for the same but could not succeed due to technical glitches on the GST Portal. They have evidence of such attempt/s made. In the second type of cases, the petitioners claim, they could not submit electronically, the Form GST TRAN-1 and/or TRAN-2 within time granted (despite efforts made by them), due to technical glitches on the GST Portal. They have evidence of such attempt/s made. The third type of cases, involve a variety of the first two types described above. Therein, petitioners claim, though they tried to submit or revise electronically, the Form GST TRAN-1 and/or TRAN-2 on the GST Portal, they could not succeed in the same. They do not have any evidence of such attempt made to submit or revise electronically, the Form GST TRAN-1 and/or TRAN-2. Thus, the petitioners claim denial of full benefit of transition credit arising from transactions performed under the repealed indirect tax enactments.
4. For the purposes of convenience, we have heard this batch of writ petitions on the facts disclosed in Writ Tax No. 477 of 2021 (M/s Ratek Pheon Friction Technologies Private Limited Vs. Principal Commissioner, Central Goods and Services Tax & Ors.); Writ Tax No. 225 of 2021 (M/s Modern Plywood Center Vs. Union of India & Ors.) and; Writ Tax No. 872 of 2018 (Allied Agencies Vs. Union of India & 4 Ors.). The facts of these three cases would be sufficient to cover the discussion necessary for the purposes of our decision. At the same time, we deem appropriate to take note of the basic facts involved in all cases in this batch of petitions. Those are as below.
