2021 (2) TMI 38 - HC - GST

Seeking to modify/revise Form GST TRAN-1 filed by it, either by opening the GST portal or by permitting submission of manual modified/rectified Form - HELD THAT - On perusal of the record, it emerges that Petitioner has filed TRAN-1 form within the time prescribed by the Respondents under the rules. Petitioner is holding documents evidencing payment of tax by it on such inputs / input services received under the erstwhile tax regime. It is thus eligible to carry forward the credit from erstwhile tax regime to the GST regime under Section 140 of the CGST Act read with Rule 117 of CGST Rules. Petitioner claims that this error has occurred because of the introduction of new and vastly different tax regime (GST) of which the Petitioner had no prior experience whatsoever, and thus it was new to the filing of Form GST TRAN-1 as well. For the aforesaid bona fide human error, inadvertently, it failed to take into account certain invoices, on which service tax amounting to ₹ 40,36,542/- was not reflected in TRAN-1 Form. The difficulty faced by the Petitioner was a genuine one. Due to an inadvertent human error and oversight on the part of the Petitioner, its substantive right should not be denied. Petitioner should therefore not be precluded from having its claim examined by the authorities in accordance with law - there are no hesitation in allowing the request of the Petitioner and accordingly the present petition is allowed. The Respondents are directed to open the online portal so as to enable the Petitioner to re-file the rectified TRAN-1 form electronically, or, accept the same manually with the corrections within a period of three weeks from today. Petitioner s claim shall thereafter be processed in accordance with law and Respondents shall be at liberty to verify the genuineness of the claim of the Petitioner - petition allowed.

Summary

Issues:
1. Exemption application - disposal
2. Failure to file counter affidavit - decision to proceed without it
3. Petition seeking modification of Form GST TRAN-1
4. Eligibility to carry forward credit to GST regime
5. Request for rectification of errors in TRAN-1 form
6. Preclusion of petitioner's substantive right
7. Directions to open online portal for re-filing TRAN-1 form

Analysis:

1. The judgment begins with the disposal of an exemption application, allowing it subject to exceptions. The court then proceeds to address the issue of the respondents' failure to file a counter affidavit despite opportunities granted, deciding to proceed without it due to the nature of the controversy and previous instances where counter-affidavits were not filed.

2. The core issue in the case pertains to a petition seeking directions to modify/revise Form GST TRAN-1. The petitioner, a not-for-profit company under the Companies Act, sought to migrate CENVAT credit to the GST regime but made unintentional errors in the filing process, leading to the request for modification.

3. The court examines the petitioner's eligibility to carry forward credit to the GST regime under Section 140 of the CGST Act read with Rule 117 of CGST Rules. It acknowledges the petitioner's genuine human error due to the new GST regime's complexity and lack of prior experience, justifying the need for rectification.

4. Referring to previous judgments, the court emphasizes the need for a facility to rectify bona fide errors in the system. It highlights the impracticality of the revision deadline coinciding with the original return filing deadline and cites precedents where courts upheld petitioners' rights in similar situations.

5. Considering the genuine difficulty faced by the petitioner and the inadvertent error made, the court rules in favor of the petitioner, directing the respondents to open the online portal for re-filing the rectified TRAN-1 form within three weeks. The petitioner's claim will be processed, and authorities can verify its genuineness, allowing for the revision of Form TRAN-2 accordingly.

6. Ultimately, the court allows the petition, granting relief to the petitioner and disposing of the writ petition with the specified directions for rectification and processing of the claim in accordance with the law.