Case Law Details

Case Name : Siddharth Enterprises Vs Nodal Officer (Gujarat High Court)
Appeal Number : Misc. Civil Application (For Direction) No. 3 Of 2020 in R/Special Civil Application No. 5758 Of 2019
Date of Judgement/Order : 12/01/2022
Related Assessment Year :

Siddharth Enterprises Vs Nodal Officer (Gujarat High Court)

1. Since the issues raised in all the captioned applications are the same, those were taken up for hearing analogously and are being disposed of by this common order.

2. The order passed by this Court dated 22nd December 2021 reads thus:

“1. We have heard Mr. Vinay Shraff, the learned counsel appearing for the applicants; Mr. Devang Vyas, the learned Additional Solicitor General of India appearing for the opponent no.3 – The Goods and Service Tax Council and Mr. Chintan Dave, the learned AGP appearing for the opponents nos.1 and 2 respectively.

2. These applications are hanging on fire past almost two years. We take notice of the final directions issued by this Court as contained in Paragraph-43 of the Judgment and Order dated 06th September 2019 in the main matter. We quote Paragraph-43:-

“43. In the result, all the four writ-applications succeed and are hereby allowed. The respondents are directed to permit the writapplicants to allow filing of declaration in form GST TRAN-1 and GST TRAN-2 so as to enable them to claim transitional credit of the eligible duties in respect of the inputs held in stock on the appointed day in terms of Section 140(3) of the Act. It is further declared that the due date contemplated under Rule 117 of the CGST Rules for the purposes of claiming transitional credit is procedural in nature and thus should not be construed as a mandatory provision.”

3. The original writ-applicants had to come before this Court with the present Misc. Civil Applications as the respondents have failed to give effect to the directions issued by this Court as contained in the Paragraph-43 referred to above.

4. We first take notice of the stance of the Principal Commissioner, Central GST, Ahmedabad South as reflected in the affidavit-in-reply filed on behalf of the respondent no.3. We quote the relevant portion:-

“It is pertinent to mention here that the petitioner is registered under State GST, and all the correspondences in the matter including the correspondences related to implementation of the judgment dated 06.09.2019 passed by the Hon’ble High Court of Gujarat have also been made with State GST. Hence, the State GST (i.e. Respondent No.1 & 2 of the present petition) is the proper authority for implementation of the impugned judgment. Accordingly, the State GST (Respondent No.1 & 2 of the present petition) would file counter affidavit in the matter and defend the case. It is also learnt that the State GST has sent a proposal for SLP against the impugned Common Order dated 06.09.2019 passed by the Hon’ble High Court of Gujarat to their advocate.”

5. We, thereafter, take notice of the stance of the Nodal Officer as reflected from the affidavit-in-reply dated 15.12.2021. We quote the relevant averments.

“12. In light of above peculiar facts and submissions, it is most respectfully prayed before this Hon’ble Court that the presence of GSTN would be necessary for proper and effective compliance of the directions issued by this Hon’ble Court. It is also brought to the notice of this Hon’ble Court that the common CAV judgment dated 06.09.2019 passed by this Hon’ble Court in Special Civil Application No.5758 of 2019 and other allied matters has already been challenged by the respondent authorities by preferring Special Leave Petition before the Hon’ble Supreme Court of India. The details of the same are annexed herewith and marked as Annexure-R15. Moreover, in a group of petitions wherein similar issue is involved, the Hon’ble Apex Court had granted stay against the implementation of the directions issued by respective High Courts in atleast 12 matters. The total number of petitions filed before the Hon’ble Apex Court wherein similar is involved in around 131. The said petitions are pending adjudication of the Hon’ble Apex Court. Copies of the few of the stay orders passed by the Hon’ble Apex Court in similar set of facts and circumstances are annexed herewith and marked as Annexure-R16(colly.).”

6. Today in the course of the further hearing of these applications, Mr. Shraff, the learned counsel invited our attention to a communication between the Nodal Officer and the GSTN. It appears that the GSTN has informed the Nodal Officer by way of Email stating that the GSTN has followed due process and complied with its statutory duties to do the technical analysis in terms of the CBIC’s applicable circular in order to ascertain if there was any technical glitch or not and forwarded the same to the ITGRC with the relevant report. The GSTN further states and informs the Nodal Officer that it has no authority to either allow or decline TRAN-1 filing except for the cases where the concerned authority approves such filing and directs the GSTN to accept the declaration. The GSTN further requested the Nodal Officer to protect its interest in accordance with the Master Instructions dated 14.08.2019.

7. Chintan Dave and Mr. Devang Vyas jointly submitted that the process to comply and give meaningful effect to the directions issued by this Court as contained in Paragraph-43 above is underway and within a short time it should materialize.

8. Mr. Shraff brought to our notice one recent order passed by the Calcutta High Court dated 14.12.2021, wherein, the Calcutta High Court was confronted with the same difficulties. Mr. Shraff invited our attention to the following observations made by the Calcutta High Court. We quote as under:-

“Thus, we are fully convinced that the decision which were rendered above have clearly brought out the difficulties faced by the assesses and also as to how the assesses having substantially complied with the requirement under law and having been entitled to credit on account of transition to the GST regime which is beyond the purview of the assessee and the assessee cannot be put to prejudice on account of technicalities. Thus, keeping the underlying principle in mind if the matter is examined then we are inclined to lean in favour of the writ petitioners and affirm the directions issued by the learned Single Judge. We note from the directions issued by the learned Single Judge that the authorities have been directed to open the portal so that the assessee may be able to file their respective TRAN-1 return or revise return or re-revise return. In our considered view, this would be a difficult exercise and such cannot be run by the assessing Officer in whose jurisdiction the assessee is carrying business. It probably will have to be done at the very higher level and consequently direction, if any, issued to open the portal, would become unworkable qua prayer made by the writ petitioners. While pondering on the face of the issue, we refer the decision of the Punjab and Haryana High Court in the case of Hans Raj Sons vs. Union of India reported in 2020 (34) GSTL 58 (P & H). In the said decision the Court while allowing the writ petition had granted two options one by directing opening of the portal and in case of non-opening of portal the writ petitioner/assessee will be entitled to make unutilized credit in their GST 3B forms to be filed on the monthly basis. This in our considered view, will be a workable solution and the Assessing Officer will be entitled to examine the legality of the claim on such form being filed by the assessee.

Thus, for the above reasons, we find that the substantial part of the order and the directions issued by the learned writ Court as well as reasoning given merits acceptance. However, we are of view that instead of directing the portal to be open, the direction issued in Hans Raj Sons (supra) is more assessee friendly. We also find identical directions have been issued in the case of Amba Industrial Corporation vs. Union of India reported in (2020) 117 Taxman. Com 195 (P & H).

HC disposes petition as department granted credit as per courts direction which was earlier not given

For the above reasons, the miscellaneous appeals and the connected applications are dismissed and the order and directions issued by the learned Single Judge is slightly modified by granting liberty to the writ petitioner/assessee to file individual tax credit in GSTR-3B Forms for the month of January 2022 to be filed in the month of February, 2022 and the concerned authority/Assessing Officer would be at liberty to verify the genuineness of the claim.”

9. Thus, it appears that a second option has been given by the Calcutta High Court to take care of the problems like the one we are tackling with in the present application. The suggestion of the Calcutta High Court is that instead of directing the portal to be opened, the assessees who are facing such kind of difficulties may be permitted to file individual tax credit in the GSTR-3B Forms for the month of January 2022 to be filed in the month of February, 2022 and the concerned Authority/Assessing Officer would be at liberty to verify the genuineness of such claim. We expect the GSTN and the Nodal Officer to explore such possibility also as suggested by the Calcutta High Court.

10. In any view of the matter, we want some concrete solution so that the directions issued by this Court as contained in Paragraph43 referred to above meaningfully complied with. The Nodal Officer is once-again present in the Court today. The Nodal Officer has heard the entire order, which has been dictated in his presence. We want the Nodal Officer to look into the second option also and try to find out a viable solution.

11. Post the matters for further hearing on 12.01.2022. We hope and trust that atleast on 12.01.2022 a positive statement is made that the order/directions passed in the main matter has been fully complied.

One copy of this order shall be furnished at the earliest to Mr. Devang Vyas, the learned Additional Solicitor General of India for its onward communication and one copy shall also be furnished to Mr. Chintan Dave, the learned AGP appearing for the Nodal Officer for its onward communication.”

3 We have heard Mr. Vinay Shraff, the learned counsel appearing for the applicants and Mr. Devang Vyas, the learned Additional Solicitor General of India appearing for the opponents.

4 We are happy to learn from Mr. Shraff that the problem has been resolved. The respective applicants have received the credit. We must place on record our appreciation for the efforts put in by Mr. Devang Vyas, the learned Additional Solicitor General of India in resolving the problem.

5 In view of the aforesaid, nothing further requires to be adjudicated. All the applications are disposed of accordingly.

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