2020 (3) TMI 1148 - HC - GST

CENVAT credit/transitional credit - inputs/input services/capital goods - situation prior to GST regime - denial on the ground that the case of the petitioner does not fall under the category of technical error - HELD THAT - Similar issue decided in the case of UNION OF INDIA ORS. VERSUS ADFERT TECHNOLOGIES PVT. LTD. 2020 (3) TMI 188 - SC ORDER where it was held that the petitioner is permitted to file or revise their already filed incorrect statutory form TRAN-1 either electronically or manually within a period of 45 days from today. Thus, respondents shall be at liberty to verify the genuineness of the claim of the petitioner. However, the petitioner shall not be denied of their legitimate claim of CENVAT/ITC on the ground of non filing of TRAN-1 by 27/12/2017. As this Court has allowed this writ petition, the respondent shall not cancel the GST registration of the petitioner. The respondent shall be free to take appropriate action in accordance with law after permitting the petitioner to remove the technical glitch (omission while uploading the information on GST Board). Petition allowed.

Issues:
1. Disallowance of CENVAT credit on Input services, Inputs, and Capital Goods.
2. Failure to file/upload a declaration electronically in Form GST Tran-1.
3. Comparison with judgments of other High Courts.
4. Dismissal of Special Leave Petition by the Supreme Court.
5. Permission to file/revise incorrect statutory form TRAN-1.
6. Additional prayer against disallowance of CENVAT credit on capital goods.
7. Request to restrain respondents from canceling GST registration.

Analysis:
1. The petitioner challenged the disallowance of legitimate CENVAT credit on Input services, Inputs, and Capital Goods by the Office of Commissioner, Central Goods Service Tax and Central Excise. The disallowance was based on the grounds that the petitioner's case did not fall under the category of technical error, thus rendering them ineligible for CENVAT credit on Capital Goods preceding the introduction of the GST Act, 2017.

2. The petitioner admitted to a mistake in failing to file/upload a declaration electronically in Form GST Tran-1 due to a technical/system error. Citing similar cases allowed by other High Courts, the petitioner argued for the allowance of their writ petition based on the precedent set by judgments from Punjab, Haryana, Delhi, Gujarat, and Karnataka High Courts.

3. The High Court referred to judgments from Punjab, Haryana, Delhi, and Gujarat High Courts, emphasizing the need to permit petitioners to submit the TRAN-1 form electronically or manually to process their claims for Input Tax Credit (ITC). The Court aligned with the findings of the mentioned High Courts and dismissed the contrary view presented by the Revenue.

4. The Supreme Court dismissed the Special Leave Petition filed by the Union of India, upholding the decision of the High Court. The dismissal affirmed the High Court's ruling, maintaining that the petitioner should be allowed to file or revise incorrect statutory form TRAN-1 within a specified period.

5. In line with the judgments of various High Courts and the Supreme Court's decision, the High Court permitted the petitioner to file or revise their incorrect statutory form TRAN-1 either electronically or manually within 45 days. The respondents were directed to verify the genuineness of the petitioner's claim without denying legitimate CENVAT/ITC on the ground of non-filing of TRAN-1 by a specific date.

6. The petitioner also sought relief against the disallowance of CENVAT credit on capital goods under Section 140 of the Central Excise and Service Tax Act, 2017. The High Court granted the prayer, restraining the respondents from canceling the petitioner's GST registration until the technical glitch was resolved.

7. Consequently, the High Court allowed the writ petition, ensuring that the petitioner could rectify their filing errors and maintain their legitimate claims for CENVAT/ITC without facing adverse actions such as cancellation of GST registration.

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