2019 (12) TMI 1269 - HC - GST

Filing of Form GST TRAN-2 - transitional Input tax credit - inability to claim input tax credit on various eligible goods - extension of time period beyond what is prescribed for filing of revised GST TRAN-I - Section 140 of the Central Goods and Service Tax Act, 2017 (CGST Act) read with Rule 117 of the Central Goods and Services Tax Rules, 2017 - vires of Rule120A of the CGST Rules - CBIC Circular No.39/13/2018-GST dated 03.04.2018 - HELD THAT - The Petitioners remained under the confusion created by the misleading language in Form GST TRAN-1 TRAN-2. We have to be mindful of the fact that the introduction of GST has revamped the entire taxation regime in the country. GST seeks to consolidate multiple taxes into one. GST legislations have incorporated transitional provisions to ensure that the transition to the GST regime is smooth and that the input tax credit/ benefits earned in the erstwhile taxation regime are not lost. Input tax credit is a property within the meaning of Article 300A of the Constitution of India. The taxpayers could not be deprived of the same, without authority of law. In terms of the transitional provisions, there was ambiguity and confusion amongst taxpayers. This was accentuated with technical glitches, which resulted in several tax payers not being able to file the requisite Form GST TRAN-1 within time. In M/s Blue Bird Pure Pvt. Ltd 2019 (7) TMI 1102 - DELHI HIGH COURT also, the court accepted the error in filling up of the requisite information to be inadvertent and directed the Respondents to either open the online portal or to enable the petitioner to file the rectified Form GST TRAN-1 electronically or accept the same manually - The factual position in the present case is not any different and thus, we allow all petitions and direct the respondents to either open the online portal so as to enable the respective petitioners to file the Form TRAN-1 and TRAN-2 electronically, or to accept the same manually on or before 06.01.2020, if not already, filed pursuant to the interim order dated 01.05.2019. Respondents shall proceed to process petitioners claim in accordance with law once the Form GST TRAN 1 and TRAN-2 are filed - Petition allowed.

Summary

Issues Involved:
1. Inability to claim input tax credit on eligible goods under Section 140 of the CGST Act read with Rule 117 of the CGST Rules.
2. Challenge to the conditions under Rule 120A of the CGST Rules as ultra vires the CGST Act.
3. Extension of the time period for submitting revised declarations under Form GST TRAN-1 and TRAN-2.
4. Technical glitches and difficulties faced in filing Form GST TRAN-1 and TRAN-2.
5. Misleading language in Form GST TRAN-1 and TRAN-2 leading to confusion among taxpayers.

Issue-wise Detailed Analysis:

1. Inability to Claim Input Tax Credit:
The Petitioners, registered under the CGST Act, were unable to claim input tax credit on various eligible goods due to technical glitches and difficulties faced during the filing process. The government extended the filing period for TRAN-1 several times, ultimately until 27.12.2017. However, Petitioners faced issues when attempting to submit a declaration under Form GST TRAN-2 after the deadline, encountering errors on the GST portal.

2. Challenge to Rule 120A Conditions:
The Petitioners sought a writ declaring the conditions under Rule 120A of the CGST Rules as ultra vires the CGST Act, arguing that it restricted the power of revision of GST TRAN-1. They requested an extension of the time period for submitting the revised declaration to claim input tax credit on goods held in stock without available invoices/duty paying documents.

3. Extension of Time Period for Revised Declarations:
Petitioners requested an extension of the time period for filing revised GST TRAN-1 and to be allowed to manually file a revised GST TRAN-1 under Rule 120A for cases where invoices were not available. The Court noted that the last date for filing the revised declaration coincided with the last date for filing the original declaration, rendering the provision for revision ineffective. It was necessary to stipulate a date for revision beyond the original filing date to allow for error correction.

4. Technical Glitches and Difficulties:
The Petitioners faced technical glitches on the GST portal, preventing them from filing the requisite forms within the deadline. Despite multiple extensions, many taxpayers could not meet the extended deadline due to these issues. The Court acknowledged the technical difficulties and human errors, granting relief to Petitioners in similar situations in previous cases.

5. Misleading Language in Forms GST TRAN-1 and TRAN-2:
The Court found that the language in Forms GST TRAN-1 and TRAN-2 was misleading, causing confusion among taxpayers. Petitioners, registered as manufacturers and not traders, were under the impression that Form GST TRAN-2 was to be used for goods without available invoices/duty paying documents. They attempted to submit a declaration under Form GST TRAN-2 but faced errors due to not filling in the details in Form GST TRAN-1 by the deadline.

Judgment:
The Court directed the respondents to either open the online portal to enable Petitioners to file Forms GST TRAN-1 and TRAN-2 electronically or accept them manually by 06.01.2020. The respondents were instructed to process Petitioners’ claims in accordance with the law once the forms were filed. The petitions were allowed on these terms, recognizing the confusion caused by the misleading language in the forms and the technical glitches faced by taxpayers.