Approach commissioner with request for extension of time limit for submission of Form GST ITC-01: HC

Deepsons Auto Centre Vs Union of India (Jharkhand High Court)

Heard learned counsel for the parties.

2. Petitioner could not make a switch over from the Composition Scheme under which it was registered, to a regular dealer as according to him, the refund Form GST ITC-01 could not be filed within the due date i.e. 12.08.2018 reckoning the period from 12.07.2018 i.e. the last date for submission of the Form GST ITC-01. Permission was granted on 17.07.2018 by the Jurisdictional Officer of the State Tax to switch over from Composition Scheme to a regular dealer. That is why the petitioner has approached this Court with a prayer for directing the Respondent to give permission to the petitioner to submit Form GST ITC-01 after due date as there was error in the portal on the due date for submission of Form GST ITC-01 in relation to GSTIN-20ADRPA2175NIZJ.

3. In course of the proceedings of this case, affidavits have been filed by the State Tax Authorities and GSTN pursuant to the order passed on 01.09.2022 which reads as under:

Annexure-R1 and R2 to the rejoinder affidavit dated 26 th August 2022 have been enclosed by the petitioner to show that the complaint raised by him through representations dated 13th August 2018 and 14th August 2018 to file ITC-01 in order to switch over from the composition scheme to a regular dealer, has been resolved by GSTN. However, in absence of extension of time by the Commissioner, State Tax i.e. the competent authority in terms of Rule 40 of the JGST Rules, 2017, petitioner has not been able to file ITC01 to switch over as a regular dealer. Learned counsel for the State Mr. Ashok Kr. Yadav, Sr.S.C.-I and learned counsel for the GSTN Mr. P.A.S. Pati both seek two weeks’ time to obtain necessary instructions. In case the contention of the petitioner is correct, the Commissioner, State Tax (respondent no.2) may, in the meantime, consider the request of the petitioner for extension of time to file GST ITC01. As prayed for, list it on 21st September 2022.

4. On this, Respondent Nos. 2 to 4 responded by filing counter affidavit dated 19.11.2022 enclosing a letter dated 16.11.2022 issued by the State Nodal Officer for ITGRC requesting the GSTN to open GST Portal to enable the petitioner to file ITC-01 for switching over from Composition Taxpayer Scheme to Normal Taxpayer / Regular Dealer, as per Rule 40 (1) of JGST Rules, 2017 as technical glitches and error message was shown on the portal when the taxpayer was filing ITC-01 within the prescribed time limit.

5. The GSTN has thereafter filed an affidavit, stating in categorical terms that no technical glitches was established at the GSTN’s end. Though the taxpayer had saved some invoices on 12.08.2018 but he had not submitted Form GST ITC-01 for filing the same. According to the GSTN, portal was functioning fine during the period 12.07.2018 to 12.08.2018 which has been substantiated from the submission of other forms smoothly as indicated at Para-9. According to the learned counsel for the GSTN, Form GST ITC-01 was to be filed within 30 days of becoming eligible to claim credit. In the petitioner’s case, the due date for filing Form under section 18(1) (c) was 12.08.2018. Therefore, filing of grievance after due date was not relevant as the said Form cannot be filed after the due date. Learned counsel for the GSTN also answered to the point raised by the State Tax Authorities relying upon the letter dated 16.11.2022 of the State Nodal Officer for ITGRC, Commercial Taxes Department, Government of Jharkhand addressed to the Chairman, IT Grievance Redressal Committee, GSTN, New Delhi by making a statement at Para-16 that no such mail has been received by the concerned office till date. The said e-mail ID has been discontinued since February 2020 (as notified vide GST Council Secretariat OM dated 06.02.2020). It is the case of the GSTN that in the absence of technical glitches at GSTN’s end, non-submission of Form GST ITC-01 within the prescribed time limit by the taxpayer is fatal to his claim for switching over from the Composition Scheme to the Normal Taxpayer Scheme.

6. It is the contention of the petitioner that the State Tax Authorities have acknowledged the technical glitches complained of by the petitioner and also made a request to the GSTN to open GSTN portal to enable the petitioner to file Form GST ITC-01. It is submitted that the petitioner did make sincere attempts to submit Form GST ITC-01 by the deadline on 12.08.2018, but the portal did not accept ITC-01 Form. Therefore he filed complaint on the GSTN Portal on 13.08.2018 and 14.08.2018. It was also responded by the GSTN vide Annexure-R/2 dated 21.08.2018. As such, since the proviso to Rule 40(1) (b) of J.G.S.T Rules, 2017 permits extension of time limit by the Commissioner of State Tax, petitioner may be allowed to submit Form GST ITC-01 by directing the Commissioner of State Tax to exercise the power conferred upon him under Proviso to Rule 40(1) (b) as it is one of the fit case to do so.

7. Learned counsel for the Respondent State has supported the communication made to the GSTN by the State Nodal Officer on 16.11.2022. It is submitted that since there was no technical glitches at the GSTN’s end, power under section 40 (1) (b) cannot be exercised in individual case of the petitioner as there are no extenuating circumstances shown. Learned counsel for the State has referred to the Notification dated 18.10.2017 issued by the Principal Secretary-cum-Commissioner, Commercial Taxes Department, whereunder extension of time limit for making a declaration in Form GST ITC-01 has been made for those registered person who became eligible during the months of July, August and September 2017 to enable them to avail ITC under Sub-section (1) of Section 18 of J.G.S.T Act, 2017.

8. We have considered the submissions of learned counsel for the parties. The conspectus of facts borne from the records and briefly summarized in the foregoing paragraphs indicates the following positions.

i. That the petitioner’s e-mail dated 14.08.2018 regarding inability to submit Form GST ITC-01 due to technical glitches was responded by the GSTN vide e-mail dated 21.8.2018 (Annexure-R2 to the rejoinder affidavit) stating that the issue was resolved.

ii. Stand of the Respondent State Tax Authorities in their counter affidavit dated 19.11.2022 indicates that the State Nodal Officer on being satisfied with the grievance of the petitioner made a request to the GSTN to open portal to enable the petitioner to file ITC-01 for switching over from Composition Scheme to Normal Taxpayer Scheme as according to them, technical glitches and error message was shown on the portal when the taxpayer was filing ITC-01 within the prescribed time limit.

9. The aforesaid facts depict a borderline situation. Petitioner was bonafide and prompt in making complaint to the GSTN on failing to submit form GST ITC-01 just after the prescribed date i.e. 12.08.2018. In that event, as per the petitioner, he loses ITC to the tune of Rs. 5.00 lakh if such switch over is not permitted. Proviso to Rule 40(1)(b) of JGST Rules, 2017, brought into force with effect from 01.07.2017 vide Notification dated 18.08.2017 bearing S.O. No. 64, issued by the Commercial Taxes Department, does confer the power upon the Commissioner of State Tax to extend the time limit. The instant rule is quoted hereunder:

“2 (iii) in rule 40, with effect from the 1^st day of July 2017, in sub-rule (1), for clause (b), the following shall be substituted namely:-

(b) the registered person shall within a period of thirty days from the date of becoming eligible to avail the input tax credit under sub-section (1) of section 18, or within such further period as may be extended by the Commissioner by a notification in this behalf, shall make a declaration, electronically, on the common portal in FORM GST ITC-01 to the effect that he is eligible to avail the input tax credit as aforesaid.

Provided that any extension of the time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.”

Respondents have interpreted the proviso as being a power conferred upon the Commissioner, State Tax for extension of time in a class of cases in general and not confined to the individual taxpayer, though no such restriction is apparently made out in the enabling provisions.

10. In the aforesaid facts and circumstances, we are of the considered view that the petitioner should approach the Commissioner, State Taxes with a request for extension of time limit for submission of Form GST ITC-01, which may be considered in accordance with law. However, we make it clear that no observation made hereinabove should be read as a conscious interpretation of the provisions of Rule 40 (1) (b) of J.G.S.T. Rules, 2017 by this court at this stage. In case, such extension of time is granted by the State Tax Authorities, petitioner shall avail of the liberty by filing GST ITC-01 Form to switch over from the Composition Scheme to Normal Taxpayer Scheme. The Commissioner, State Tax shall take a decision on the petitioner’s representation within a time frame of four weeks from the date of receipt of copy of this order along with petitioner’s representation.