2021 (12) TMI 835 - HC - GST

Prayer to file/upload GST TRAN-1 or to permit to file revised TRAN-1 form - HELD THAT - It is clearly 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. While pondering on the face of the issue, the decision of the Punjab and Haryana High Court in the case of HANS RAJ SONS VERSUS UNION OF INDIA AND OTHERS 2019 (12) TMI 997 - PUNJAB AND HARYANA HIGH COURT . 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 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. The substantial part of the order and the directions issued by the learned writ Court as well as reasoning given merits acceptance - 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.

Summary

Issues Involved:
- Appeal against a common order for allowing to file/upload GST TRAN-1 or revised TRAN-1 form.
- Technical glitches preventing timely uploading of Form TRAN-1.
- Entitlement to input credit being denied due to procedural problems.
- Examination of appropriateness of the order/direction passed by the Single Judge.
- Comparison with similar relief sought in other High Courts.
- Consideration of recent decisions in other High Courts regarding similar issues.
- Doctrine of substantial compliance in the context of Input Tax Credit claims.
- Assessment of difficulties faced by assesses due to technicalities.
- Affirmation of directions issued by the Single Judge to open the portal.
- Workable solutions proposed by other High Courts for addressing the issue.

Detailed Analysis:
The High Court dealt with a series of appeals by the Central Government challenging a common order regarding the filing of GST TRAN-1 or revised TRAN-1 forms due to technical glitches. The appeals stemmed from writ petitions by respondents seeking relief to address issues with uploading Form TRAN-1 on time. The common feature was the denial of input credit to petitioners despite their entitlement due to procedural problems. The Court examined the appropriateness of the Single Judge's order and compared it with similar relief granted by other High Courts nationwide, indicating a pan-India problem.

The Court referenced recent decisions from various High Courts, including the High Courts of Madras, Allahabad, Delhi, and Punjab and Haryana, which highlighted the challenges faced by assesses in complying with GST requirements. These decisions emphasized the doctrine of substantial compliance in Input Tax Credit claims and the need to address technical difficulties hindering compliance. The Court acknowledged the difficulties faced by assesses and their right to credit under the GST regime, emphasizing the importance of not prejudicing assesses due to technicalities.

Ultimately, the Court affirmed the directions issued by the Single Judge to open the portal for petitioners to file or revise their returns. However, the Court proposed a more practical solution based on the Punjab and Haryana High Court's decision, allowing assesses to make unutilized credit claims in their monthly GST 3B forms if the portal opening was unfeasible. This solution aimed to balance the needs of assesses with the verification requirements of Assessing Officers, ensuring a smoother process for all parties involved.

In conclusion, the Court dismissed the appeals and connected applications while slightly modifying the Single Judge's order. The modified direction granted liberty to petitioners to file individual tax credit claims in GSTR-3B Forms for a specific period, with Assessing Officers authorized to verify the genuineness of the claims. This decision aimed to provide an effective and practical resolution to the challenges faced by assesses in fulfilling their GST obligations.