2020 (1) TMI 929 - HC - GST

Filing of form GST TRAN-1 - transitional input tax credit - transition to GST regime - the grievance of the petitioners is essentially that they had come across a press release by the GST Council, which indicated that the last date for uploading the details in the GST portal for the purposes of carrying forward the accumulated credit from the erstwhile regime was extended up to 31.12.2017 - HELD THAT - While it is a fact that the petitioners did not make an attempt to log into the system before 27.12.2017, the cut-off date prescribed by the respondents for uploading the TRAN-1 Form to the web portal, it is found that the petitioners were guided by a press release of the GST Council, which suggested that they could upload the statutory form on any date before 31.12.2017. Placing reliance on the said press release, the petitioners had submitted an E-mail on 30.12.2017, seeking a clarification as to when the web portal would open again so as to upload their respective TRAN-1 Forms. The Delhi High Court in AMAN MOTORS VERSUS UNION OF INDIA ORS. 2019 (11) TMI 1249 - DELHI HIGH COURT , where in almost similar circumstances, the Court permitted the petitioners therein to file a Form TRAN-1 electronically on or before a specified date - Taking cue from the said judgment, it is deemed appropriate to allow these Writ petitions by quashing the impugned communications and directing the respondents to either open the online portal so as to enable the petitioners to file the Form TRAN-1 electronically or to accept the same manually on or before 31.12.2019. While the respondents shall attempt to facilitate the filing of these TRAN-1 Forms electronically by making the necessary arrangements in the web portal, an insistence on manual filing shall be only in circumstances where the electronic filing is not possible - petition allowed.

Summary

Issues:
Petitioners migrated to GST regime, sought to carry forward VAT credit, faced technical issue in uploading details, denied credit transfer by respondents, impugned communication, relied on press release extending deadline, sought clarification, respondents maintained petitioners did not attempt to log in before deadline, petitioners argued for substantive rights under GST Act, Delhi High Court judgment cited, petitioners sought relief to file Form TRAN-1.

Analysis:
The judgment involved two writ petitions concerning the migration of assesses from the Kerala Value Added Tax Act to the GST regime. The petitioners were entitled to carry forward tax credit from the VAT regime to the GST regime as per transition provisions under the CGST/SGST Act and Rules. The grievance arose when a press release by the GST Council extended the deadline for uploading details for credit migration to 31.12.2017, conflicting with the original deadline of 27.12.2017.

The respondents denied credit transfer to petitioners, citing their failure to log in before the original deadline. The court considered the press release and the subsequent actions of the petitioners, noting that they attempted to seek clarification on the extended deadline. Despite the clarification that the press release was mistaken, the court emphasized that petitioners should not lose substantive benefits under the GST Act due to technical procedures, especially when relying on official communication.

Referring to a Delhi High Court judgment in a similar case, the court allowed the writ petitions, quashed the impugned communications, and directed the respondents to facilitate the filing of Form TRAN-1 either electronically or manually by 31.12.2019. The court granted flexibility for manual filing only if electronic filing was not feasible, emphasizing that the genuineness of claims should be verified without denial solely based on the filing date. The judgment aimed to uphold the petitioners' rights under the GST Act and provide a reasonable opportunity for credit transfer despite the technical issues faced.