2024 (3) TMI 1213 - HC - GST

Availment of wrongful credit - bonafide mistake - appellants entered the amount in a wrong table due to technical misunderstanding, as a result of which, the credit of Rs. 46,91,982/- was credited to the CGST account - consistent case of the appellants is that they would fall under Entry 7B and inadvertently the TRAN-1 was filed under Entry 7A and the appellants explained that since they are not registered under the Central Excise Act, they are required to file TRAN-1 under Entry 7B - HELD THAT - The question would be as to whether on account of such a technical error which undoubtedly is an inadvertent error can the appellants be denied the transitional credit. This issue is no longer res integra and has been considered by several courts as well as this court in a batch of cases in MAT 552 of 2020. More or less an identical issue arose for consideration and the court considered the various orders passed by the other High Courts and disposed of the appeals by permitting the writ petitioners therein to file individual tax credit in GSTR-3B Forms for the relevant months and the assessing officer was at liberty to verify the genuineness of the claim. We are informed that the judgment 2021 (12) TMI 835 - CALCUTTA HIGH COURT . batch has been given effect to. More recently in the case of S.V. Halavagali and Sons v. Superintendent of Central Excise 2023 (11) TMI 1013 - KARNATAKA HIGH COURT an identical issue arose for consideration before the court. In the said case also there was an inadvertent error and the credit was filed under wrong head i.e. 7(d) instead of 7(b). The court after taking into consideration the various orders passed by the other High Courts directed the authorities to consider the claim of the petitioners therein under Column 7(b) of the CGST Rules, 2017 and if there are supporting documents to make the claim and the claim is established, then consequential relief should be allowed. Earlier similar issue was considered in the case of M/S. G C INFRA INNOVATIONS VERSUS UNION OF INDIA THE COMMISSIONER, STATE GOODS AND SERVICES TAX DEPARTMENT, KERALA, THE GST COUNCIL, THE PRINCIPAL COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, KOCHI GOODS SERVICES TAX NETWORK, THE NODAL OFFICER, AND OTHERS 2022 (5) TMI 694 - KERALA HIGH COURT wherein the court took note of the fact that after the GST regime came into force the period between 2017 and 2020 ought to be regarded as the nascent period of legislation and admittedly several glitches occurred even from the part of the department. Further, it was pointed out that the courts have repeatedly held that the said period as a trial and error phase as far as implementation of the statute was concerned and the taxpayers were also in a state of confusion, during the relevant period. Thus, taking note of the law and the subject as well as the facts of the case, it is a fit case where directions should be issued to the authorities to enable the appellants to rectify the mistake and submit GST TRAN-1 under heading 7B of Table 7(a) of Form GST TRAN-1 and the appellants are directed to comply with the same within three weeks from the date of receipt of the server copy of this order after which the adjudicating authority is directed to verify the same and if admissible, extend the transitional credit to the appellants. The Nodal Officer of IT Grievance Redressal Mechanism, Kolkata CGST CX Zone is directed to take note of the direction issued in this judgment and order and facilitate the filing of the TRAN-1 and TRAN-2 by the appellants by rectifying the mistake - In the event such rectification is not possible electronically, the appellants shall be given an option to do so manually. Appeal disposed off.

Summary

Issues involved:
The appeal challenges the rejection of the writ petitioners' challenge to the adjudication order due to a technical error in filing the return under GST.

Details of the judgment:
1. The appellants, registered under the Value Added Tax Act and subsequently under the GST Act, mistakenly credited Rs. 46,91,982 to the CGST account while filing the return in TRAN-1.
2. Despite the appellants' request for guidance and submission of representations, no response was received from the assessing officer.
3. The adjudicating authority acknowledged the mistake but confirmed the demand, noting the failure of the department to advise the appellants on rectifying the error.
4. Citing precedents, the court highlighted the inadvertent nature of the error and directed the authorities to enable the appellants to rectify the mistake and submit the correct form within three weeks for verification and extension of transitional credit.
5. Directions were also issued to the Nodal Officer of IT Grievance Redressal Mechanism to facilitate the filing of necessary forms, electronically or manually if needed.

This judgment emphasizes the importance of rectifying technical errors in GST filings and ensuring that taxpayers are provided with necessary guidance and support in such situations.