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2021 (3) TMI 953 - HC - GSTTransitional credit - Carry forward of Input Tax Credit - allowing any balance in their credit account under the earlier regime by filing or revising the GST who had already filed - respondents-assessees herein not filing their TRAN-1 or revised TRAN-1 within the period prescribed under Rule 117 of the Rules - HELD THAT:- Co-ordinate Bench of the Delhi High Court in SKH Sheet Metals [2020 (6) TMI 385 - DELHI HIGH COURT] held, despite the judgment in Brand Equity Treaties Limited [2020 (6) TMI 517 - SC ORDER] being stayed by the Supreme Court, the aforesaid reasoning still holds good. In addition, it was also observed that Rule 117(1A) suffers from the vice of vagueness as the expression “technical difficulties on the common portal” and its applicability had not been adequately defined nor its parameters asserted. As a result, there was no certainty or predictability about the application of this Rule for the class of cases to which it would apply. Further, in the absence of there being defined criteria, the application of the said provision would suffer from arbitrariness. It was also noted that the GST Council itself had found that there can be certain errors apparent on the face of the record and that could be non-technical in nature which would predicate leniency in the matter. The entire country was in a transitional mode insofar as the new regime of GST being implemented with effect from 01.07.2017. It would be relevant to note that in each State earlier, there were independent and separate Sales Tax Regime in the form of VAT (Value Added Tax) Act. Although, there were different enactments in various States of the country, there was an over-all pattern, which emerged inasmuch as there were several similarities that could be found under various VAT enactments of the respective States. But, the Parliament thought it fit that the entire country must be covered under a single tax regime and by amendment made to the Constitution by insertion of Article 246-A and by exercising power under Article 249, brought under one umbrella in the form of the Goods and Service Tax Act, not only the indirect taxation regime under the various State VAT Acts but also the Central Sales Tax, Central Excise and Service Tax in the form of a single Code. There should be certainty and a time-prescription within which the transition could be made. But, it is also noted that the initial time-frame prescribed, being 27.12.2017, had to be extended from time to time by virtue of the amendments made and ultimately, sub-rule (1A) to Rule 117 was inserted. The said Rule incorporates the expression "technical difficulties on the common portal". The Rule does not define as to what is a technical difficulty on the common portal. The reason for not defining the same is because the rule making authority was conscious of the fact that there could be a variety of technical difficulties on the common portal which could not be explained under the Rule or envisaged by the Rule making Authority - In the absence of such a definition being given under the Rule, question is, whether, the same would have to be viewed in a myopic or narrow, pedantic way or to give a liberal interpretation to the said expression so that all reasons which would come in the way of uploading Form TRAN-1 or Revised Form TRAN-1, could be considered within the scope and ambit of the expression "technical difficulty of common portal". No doubt, it is the policy of the Central Government that there should be digitalization, as far as possible, even with regard to simple transactions, such as buying of household articles and including other complex transactions, such as entering into various types of agreements concerning infrastructure development projects. But, the reality is that the Indian society is not yet so well-versed and adept at utilising online methods, whether it is a simple transaction, or for the purpose of filings, etc., under the taxation enactments. Ultimately, insertion of sub-rule (1A) to Rule 117 with effect from 10.09.2018 was effected. Even thereafter, the sub-rule was amended not once, but thrice so as to extend the time from 31.03.2019 to 31.03.2020 and ultimately, it was extended to 31.08.2020. The last extension upto 31.08.2020 was in exercise of the powers conferred under Section 168A of the Act by insertion of Section 117(1A) of the Act by way of an amendment. This was on the recommendation of the GST Council whereby, earlier Notification No.35/2020-CT dated 03.04.2020 was amended. This was done by extending the time period granted upto 30.06.2020 by the Notification dated 03.04.2020 issued in the interregnum - the assessees herein must be granted relief by giving them another opportunity to file/revise TRAN-1 either electronically or manually on or before 31.12.2020. We find that the reasoning of the learned single Judge and the relief granted would not call for any interference except to the extent of extending the time within which they would now have to file TRAN-1. The said time-frame has now expired even after successive extensions on 30.08.2020. Therefore, the respondents-assessees are permitted to file/revise TRAN-1 either electronically or manually on or before 31.03.2021. There are no reason to interfere with the order of the learned single Judge - appeal dismissed.
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