2019 (11) TMI 1251 - HC - GST

Filing of Form GST Tran-1 - carry forward credit of eligible duties on stock - vires of rule 117 in Central Goods and Services Tax Rules, 2017 - HELD THAT - On facts, case of petitioner is that it could not attempt to file GST TRAN 1 form on GST portal because his own system was down. On 9th January, 2018, deadline having expired on 27th December, 2017, petitioner said so to Revenue. Petitioner then has obtained a report, upon forensic examination of his system, having provided password, which report confirms petitioner s contention. Less said about the instructions, in context of such facts, as being removed from them, the better. Concerned respondents in Revenue will allow petitioner to file GST TRAN 1 form to enable him to obtain credit accrued in his favour prior to the transition, on his stock as on 30th June, 2017 - Petition allowed.

Summary

Issues:
Challenge against rule 117 in Central Goods and Services Tax Rules, 2017 for being ultra vires of section 140 of Central Goods and Services Tax Act, 2017.
Petitioner's omission to file GST TRAN-1 within the specified period.
Denial of accrued credit due to failure to file in time.

Analysis:
The petitioner challenged rule 117 in Central Goods and Services Tax Rules, 2017, arguing it was ultra vires of section 140 of the Central Goods and Services Tax Act, 2017. The rule made it mandatory for an assessee to file GST TRAN-1 within the specified period to carry forward credit of eligible duties on stock as of 30th June, 2017. The petitioner sought relief to save the accrued credit, which was denied due to the failure to file in time. The petitioner's advocate highlighted a letter explaining system failure preventing timely filing, supported by a forensic report confirming the attempt to file the GST TRAN-1 form before the deadline.

The petitioner's counsel emphasized that acquired credit should not be denied on technical grounds and referred to judgments from different High Courts to support the claim for relief. The Division Bench of Punjab and Haryana High Court allowed similar writ petitions based on the principle that property rights cannot be deprived without authority of law. The Gujarat High Court judgment emphasized that CENVAT credit is the property of the assessee and cannot be taken away merely for failing to file a declaration in the absence of law.

The respondent's counsel argued that there were no evidences of error or submission of TRAN-1 before the due date, contradicting the petitioner's claim of technical glitch. However, the forensic report provided by the petitioner supported their contention of system failure preventing timely filing. The Court, considering the facts presented, allowed the writ petition and directed the concerned revenue authorities to allow the petitioner to file GST TRAN-1 form to claim the credit accrued on their stock as of 30th June, 2017, in the interest of revenue. The writ petition was disposed of accordingly.