The issue under consideration is whether assessee is allowed to file Form TRAN-1 manually with department due to technical glitches with the GST online portal?
High Court states that, the factual position in the present case is not any different. Though, the case of the petitioner cannot be strictly categorized as covered by “technical glitches”, however, as held in M/s Blue Bird (supra), the GST System is still in a “trial and error phase‟ as far as its implementation is concerned and although the failure was on the part of the Petitioner, the error was inadvertent. The petitioner does not have any evidence or proof in support of his submission that the personnel responsible for dealing with the compliances was unable to file the requisite Form due to non-functioning of GST Portal. However, HC have noticed that in large number of matters, the petitioner have similarly complained that before the deadline, they were not able to access the GST Portal. This could be presumably because of low bandwith, given the fact that before the deadline, a large number of tax payers all over the country, were trying to submit the declaration in form TRAN-1. In these circumstances, HC would thus give the benefit of doubt to the petitioner. In view of the law laid down in the judgments referred to above and as the petitioner could not upload the TRAN-1 form electronically due to technical snags and since Government of India has been extending the time regularly for submitting TRAN-1 forms, we feel that it is a fit case where the request of the petitioner can be considered. Accordingly, the Writ Petition is disposed of directing the respondents herein either to open the portal to enable the petitioner to again file GST TRAN-1 form electronically or in the alternative accept the GST TRAN-1 form manually on or before 30.9.2020. Once it is uploaded or submitted manually, the claim of the petitioner may be processed in accordance with law.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The present Writ Petition came to be filed seeking issuance of writ of Mandamus directing the respondents to open the GSTN portal and enable the petitioner to file the TRAN-1 form and avail the credit of excise duty and cess of Rs.79,77,785/- as input tax credit of GST, or in the alternative, to permit the petitioner to submit manually GST TRAN-1 form and allow credit of input tax.
2. The facts in issue are as under :
The petitioner is a dealer of Hyundai cars and ancillary services. For the services rendered by them in pre-GST era, the petitioner was registered with service tax vide registration Nos.AACCK8209QST001 and AACCK8209QST002 in Kurnool and Anantapur divisions. The petitioner was also registered as an assessee in VAT Department vide TIN 3757022957 prior to the introduction of GST. After 1.7.2017, the petitione registered with GST vide registration No.37AACCK8209Q1ZX and are assigned to the jurisdiction of Kurnool-II Bench. It is further to be noted that, in order to avoid double taxation on the duty paid goods, the Government has brought the transitional provisions of CGST Act, 2017, namely, Section 140(3) of CGST Act, 2017 read with Rule 117 of CGST Rules, which allows a person, who was not liable for registration under the erstwhile law or, who was engaged in the manufacture of exempted goods or provisions of exempted goods or a first stage dealer or second stage dealer or a depot of manufacturer to claim credit of eligible duties in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock as on 30.6.2017. The averments in the affidavit show that the petitioner, being a first stage dealer, had a closing stock of vehicles and spare parts purchased from the manufacturers on payment of eligible duties as on 30.6.2017 to an eligible credit of nearly Rs.79,77,785/-. Having regard to the above, form TRAN-1 is prescribed for availing credit on transfer to GST account under Rule 117, which shall be availed within 90 days from the appointed day. However, the Government of India has been extending the time limit for filing form TRAN-1 from time to time. It is said that the petitioner attempted to file TRAN-1 on 24.12.2017, but as the portal was frozen or jammed, he could not uploaded the TRAN-1. It is averred that he tried on many occasions subsequent thereto, but could not upload the same, as portal was not opening. The petitioner is said to have brought to the notice of the Deputy Commissioner of Central Tax, Kurnool Division vide letter dated 19.11.2018, his inability to upload TRAN-1 form and requested the 2nd respondent to forward the application to the concerned Nodal Officer. It is said that, on 29.11.2018, the Superintendent of Central Tax, Kurnool called for statements containing details of credit eligible and not claimed under TRAN-1, along with reasons for non-claiming the credit. In response to which, the petitioner submitted a letter dated 12.12.2018, enclosing statement containing details of eligible credit and statutory returns of ST-3 returns and VAT returns and also the efforts made to file TRAN-1 in December 2017. It is said that vide letter dated 29.1.2019, the 1st respondent herein asked the petitioner to submit details of complaint/communications made with GSTN help desk along with proof of genuine attempt for processing the request of the petitioner to the 3rd respondent. Vide letter dated 2.2.2019, the petitioner submitted details of technical problems faced by the petitioner, in form Table-B as prescribed under Standard Operation Procedure. As the last date for filing the TRAN-1 was extended up to 31.12.2019, which according to the petitioner was approaching fast, he addressed a letter dated 11.11.2019 to the 1st respondent stating that no intimation was received from the technical team and there was no response to the application submitted by him. It is averred that number of personal visits to the office of respondents 1 and 2 and a reminder letter dated 2.12.2019 proved futile. While things stood thus, on 20.12.2019, the 1st respondent intimated to the petitioner that his request was not approved on the ground that there is no evidence of error or submission/filing of TRAN-1. Aggrieved by the same, the present Writ Petition came to be filed.
3. A very elaborate and detailed counter came to be filed denying the averments in the affidavit filed in support of the Writ Petition. In substance the gist of the counter is that, after December, 2017, there is no material on record to show that the petitioner herein has made any effort to get his form TRAN-1 uploaded in the GST web portal. In fact, according to respondents, there is no material on record to show that he ever made any attempt to claim input tax credit after December, 2017.
4. However, as stated by us earlier, there were exchange of letters in the year 2018 as well as in the year 2019, between the petitioner and respondents 1 and 2, with regard to the inability of the petitioner to upload form TRAN-1, due to freezing of portal or the portal not getting opened. In fact, the material filed along with the counter itself show that in the month of February, 2019 also the petitioner made a request to the Deputy Commissioner, GST Cell, Commissioner of Central Taxes, Tirupathi GST Commissionerate, Tirupathi, requesting him to take required action to re-open TRAN-1 as per the provisions of the GST law and circular instructions. Similar such letter was addressed to him on 11.2.2019, but there was no response till the order rejecting the request came to be passed.
5. From the above, it is very clear that the petitioner did make efforts to get form TRAN-1 uploaded or in the alternative to accept the application manually and do the needful. Issue identical to the case on hand came up for consideration before various High Courts.
6. In Garuda Packaging Pvt. Ltd. v. The Assistant Commissioner State Tax1 a Division Bench of this Court, after referring to judgment of the Madras High Court in Tara Exports v. The Union of India & Others 2 and also the judgment of the Delhi High Court in Uninav Developers Pvt. Ltd. v. Union of India & Others3 and also the orders in Bhargava Motors v. Union of India4, Kusum Enterprises Pvt. Ltd. v. Union of India [WP(C)7423/2019] and Sanko Gosel Technology India Pvt. Ltd. v. Union of India & Ors.5, disposed of the Writ Petition directing the respondents to either open the portal to enable the petitioner to again file form GST TRAN-1 electronically or in the alternative accept the form GST TRAN-1 presented manually on or before 30.9.2019.
7. Similar such view came to be taken by a Division Bench of this Court in Lantech Pharmaceuticals Ltd., Srikakulam v. The Prl. Commissioner, Visakhapatnam6.
8. In A. B.Pal Electricals Pvt. Ltd. v. Union of India & Ors.7 a Division Bench of Delhi High Court while dealing with the issue identical to the case on hand held as under :
“5. We have considered the submissions of the parties. The nature of reliefs sought in the present petition and the facts disclosed herein is fully covered by the decision of this Court in M/s Blue Bird Pure Pvt. Ltd (supra) decided on 22.07.2019, wherein, following the decisions of this Court in Bhargava Motors v. Union of India, decision dated 13th May, 2019 in WP (C) 1280/2018 and Kusum Enterprises Pvt. Ltd. v. Union of India, 2019-TIOL- 1509-HC-DEL-GST, the Court had directed the respondents to either open the online portal or to enable the petitioner to file the rectified TRAN-1 electronically or accept the same manually. The said decision has also been followed by this court in M/s Aadinath Industries & Anr vs Union of India, W.P. (C) 9775/2019, decided on 20.09.2019; Lease Plan India Private Limited vs Government of National Capital Territory of Delhi and Ors, W.P.(C) 3309/2019, decided on 13.09.2019; Godrej & Boyce Mfg. Co. Ltd. Through its Branch Commercial Manager vs Union of India, W.P.(C) 8075/2019, decided on 15.10.2019. The decision of this Court in Krish Automotors Pvt. Ltd. v UOI 2019-TIOL-2153-HC-DEL-GST has also been followed by the Punjab & Haryana High Court in Adfert Technologies Pvt Ltd v Union of India in CWP No. 30949/2018 (O&M) decided on 04.11.2019. The relevant paragraphs of M/s Blue Bird (supra) read as under:
“10. Having carefully examined those decisions, the Court is unable to find any distinguishing feature that should deny the Petitioner a relief similar to the one granted in those cases. In those cases also, there was some error committed by the Petitioners which they were unable to rectify in the TRAroached by dealers facing genuine difficulties in filing returns, claiming input tax credit through the GST portal. The Court’s attention has been drawn to a decision of the Madurai Bench of the Madras High Court dated 10th September, 2018 in W.P. (MD) No. 18532/2018 (Tara Exports v. Union of India) where after acknowledging the procedural difficulties in claiming input tax credit in the TRAN-1 form that Court directed the respondents “either to open the portal, so as to enable the petitioner to file the TRAN1 electronically for claiming the transitional credit or accept the manually filed TRAN1” and to allow the input credit claimed “after processing the same, if it is otherwise eligible in law”.
11. In the present case also the Court is satisfied that the Petitioner’s difficulty in filling up a correct credit amount in the TRAN-1 form is a genuine one which should not preclude him from having its claim examined by the authorities in accordance with law. A direction is accordingly issued to the Respondents to either open the portal so as to enable the Petitioner to again file TRAN-1 electronically or to accept a manually filed TRAN-1 on or before 31st May, 2019. The Petitioner’s claims will thereafter be processed in accordance with law.
12. With a view to ensure that in future such glitches can be overcome, the Court directs the Respondents to consider providing in the software itself a facility of the trader/dealer being able to save onto his/her system the filled up form and also a facility for reviewing the form that has been filled up before its submission. It should also permit the dealer to print out the filled up form which will contain the date/time of its submission online. The Respondents will also consider whether there can be a message that pops up by way of an acknowledgement that the Form with the credit claimed has been correctly uploaded.”
11. Similar directions were issued by this Court in Kusum Enterprises Pvt. Ltd. (supra).
12. In the present case, the Court is satisfied that, although the failure was on the part of the Petitioner to fill up the data concerning its stock in Column 7(d) of Form TRAN-instead of Column 7(a), the error was inadvertent. The Respondents ought to have provided in the system itself a facility for rectification of such errors which are clearly bona fide. It should be noted at this stage that although the system provided for revision of a return, the deadline for making the revision coincided with the last date for filing the return i.e. 27th December, 2017. Thus, such facility was rendered impractical and meaningless.”
6. The factual position in the present case is not any different. Though, the case of the petitioner cannot be strictly categorized as covered by “technical glitches”, however, as held in M/s Blue Bird (supra), the GST System is still in a “trial and error phase‟ as far as its implementation is concerned and although the failure was on the part of the Petitioner, the error was inadvertent. The petitioner does not have any evidence or proof in support of his submission that the personnel responsible for dealing with the compliances was unable to file the requisite Form due to non-functioning of GST Portal. However, we have noticed that in large number of matters, the petitioner have similarly complained that before the deadline, they were not able to access the GST Portal. This could be presumably because of low bandwith, given the fact that before the deadline, a large number of tax payers all over the country, were trying to submit the declaration in form TRAN-1. In these circumstances, we would thus give the benefit of doubt to the petitioner.
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9. Thus, we allow the present petition and direct the respondents to either open the online portal so as to enable the petitioner to file the Form TRAN-1 electronically, or to accept the same manually on or before 31.12.2019. Respondents shall process the petitioner’s claim in accordance with law once the Form GST TRAN-1 is filed. The petition is allowed in the aforesaid terms.”
9. Similar such view was taken by the Division Bench of the Gujarat High Court in Siddarth Enterprises through partner Mahesh Liladhar Tibdewal v. The Nodal Officer8 and also by Division Bench of this Court in M/s. Sattibabu Motors Private Limited v. Assistant Commissioner of Central Tax, The Principal Commissioner of Central Tax, Union of India and others9, to which one of us (CPK, J.) was a party.
10. As stated earlier, it is not a case where the petitioner has not made any efforts in getting TRAN-1 form uploaded in the GST portal. Efforts were made in December, 2017 and thereafter in the years 2018 and 2019, which is evident from the communications referred to earlier. Therefore, non-filing of screenshots in our view cannot be a ground to reject the request on the ground that no effort was made, since the communication between the petitioner and the respondents is not in dispute. As observed in Uninav Developers Pvt. Ltd.’s case (3 supra) the GST system is still in a trial and error phase and it will be too much of a burden to place on the Assessee to expect them to comply with the requirement of the law where they are unable to even connect to the system on account of network failures or other failures. Further, question of preserving screenshots by everyone may not be possible having regard to the conditions prevailing in the country and also the facilities that are available for an uneducated assessee
11. In view of the law laid down in the judgments referred to above and as the petitioner could not upload the TRAN-1 form electronically due to technical snags and since Government of India has been extending the time regularly for submitting TRAN-1 forms, we feel that it is a fit case where the request of the petitioner can be considered.
12. Accordingly, the Writ Petition is disposed of directing the respondents herein either to open the portal to enable the petitioner to again file GST TRAN-1 form electronically or in the alternative accept the GST TRAN-1 form manually on or before 30.9.2020. Once it is uploaded or submitted manually, the claim of the petitioner may be processed in accordance with law. No order as to costs.
Consequently, miscellaneous petitions pending, if any, shall stand closed.
1 2019 (10) TMI 556
2 2018 (9) TMI 1474
4 2019 SCC on Line Del 8474
6 2019 (10) TMI 477
7 2019 (12) TMI 1002
8 2019 (9) TMI 319
9 2020 (2) TMI 1047