2021 (7) TMI 988 - HC - GST

GST registration - registration was granted but at a later date i.e., 09.03.2018 - inability to comply with the requirements in terms of the statutes for the period from 01.07.2017 to 09.03.2018 - HELD THAT - There are merit in the submission that the fresh registration on 09.03.2018 having been obtained by the petitioner in terms of the interim order issued, an opportunity for statutory compliance for the period prior to 09.03.20218 ought to be provided. At the same time, there is substance in the submission made on behalf of the respondents that it is technically impossible to make changes in the GST portal for providing opportunity for an individual assessee to comply with the statutory requirements from a date prior to its registration. The only possible manner in which the issue can be resolved is for the petitioner to pay tax for the period covered by provisional registration from 01.07.2017 to 09.03.2018 along with applicable interest under Form GST DRC-03 dealing with intimation of payment made voluntarily or made against the show cause notice (SCN) or statement. If such payment is effected, the recipients of the petitioner under its provisional registration (ID) for the period from 01.07.20217 to 09.07.2018 shall not be denied ITC only on the ground that the transaction is not reflected in GSTR 2A. It will be open for the GST functionaries to verify the genuineness of the tax remitted and credit taken. This writ petition is filed by one of the concerns that had purchased goods from the petitioner in W.P.(C) No.17235 of 2020. The grievance is regarding issuance of Ext.P2 intimation in Form GST DRC-01A, despite payment of tax in full for the purchases effected. In view of the directions in W.P.(C) No.17235 of 2020, nothing survives for consideration herein. Petition closed.

Summary

Issues:
1. Failure to comply with statutory requirements under GST regime for the period prior to fresh registration.
2. Inability to upload returns and remit tax leading to issues with Input Tax Credit (ITC).
3. Allegations of illegal initiation of proceedings against customers and refusal of ITC.
4. Non-consideration of representation for rectifying technical issues and filing monthly returns.
5. Dispute over compliance with court directions and communication regarding GST registration.

Issue 1: Failure to comply with statutory requirements under GST regime for the period prior to fresh registration.
The petitioner, a registered dealer under the Kerala Value Added Tax Act, faced technical glitches during migration to the Goods and Services Tax Act regime. Despite obtaining fresh registration on 09.03.2018, the petitioner was unable to comply with statutory requirements for the period from 01.07.2017 to 09.03.2018. The court directed respondents to make changes in the portal to enable compliance for the said period.

Issue 2: Inability to upload returns and remit tax leading to issues with Input Tax Credit (ITC).
Despite the court's direction, the petitioner remained unable to upload returns and remit tax for the period in question, affecting its customers' ability to claim Input Tax Credit. This situation resulted in the petitioner's customers ceasing business transactions with the petitioner. The petitioner sold products to various purchasers during this period, leading to complications with GST migration and notices from the Department.

Issue 3: Allegations of illegal initiation of proceedings against customers and refusal of ITC.
The petitioner's customers faced notices from the Department citing discrepancies in returns, impacting their ability to claim Input Tax Credit. The petitioner filed a representation requesting rectification of technical issues and an opportunity to file monthly returns for the period prior to 09.03.2018, which was allegedly not considered by the respondents.

Issue 4: Non-consideration of representation for rectifying technical issues and filing monthly returns.
The petitioner contended that despite obtaining fresh registration as per court directions, the respondents failed to facilitate compliance with statutory requirements for the period preceding the fresh registration. The petitioner's counsel argued that no action was taken by the respondents to address the petitioner's grievances, leading to illegal actions against the petitioner's customers.

Issue 5: Dispute over compliance with court directions and communication regarding GST registration.
The court acknowledged the technical challenges in making changes to the GST portal for compliance prior to registration. It directed the petitioner to pay tax for the period covered by provisional registration from 01.07.2017 to 09.03.2018 along with applicable interest under Form GST DRC-03. This payment would ensure that recipients under the provisional registration would not be denied Input Tax Credit, subject to verification by GST functionaries. Another concern related to the issuance of intimation despite full tax payment was resolved based on directions from a separate writ petition.

This detailed analysis of the judgment addresses the issues raised by the petitioner regarding compliance with statutory requirements under the GST regime, challenges with Input Tax Credit, and the court's directives to resolve the matter effectively.