2021 (4) TMI 876 - HC - GST

Seeking allowance to access to the portal to enable us to file Form GST TRAN 1 - filing of Form GST TRAN 1 - HELD THAT - It is to be noted that on 03.04.2018, the Central Board of Indirect Taxes and Customs issued a circular bearing No.39/13/2018-GST in F.No.267/7/2018-CX.8, dealing with the subject of setting up of an IT Grievance Redressal Mechanism to address the grievances of assessees. It is thus clear that the officials of the Department of Goods and Service Tax were well aware of the existence of such glitches. Notwithstanding this, the Board places the onus upon the assessee to establish a demonstrable glitch in the portal. Such requirement does not figure in the Act prior to 03.04.2018 and thus an assessee has not been put to notice that the would have to collect evidence of difficulty/technical glitch in uploading forms. The requirement for an assessee to establish technical difficulty as expressed in Circular dated 03.04.2018, is reiterated in the provision - Though Goods and Service Tax has been introduced to streamline multiple revenue enactments, the mass litigation that Rule 117 has generated, has defeated the very object and purpose of the enactment. Transition, by itself, does not vest any right in the assessee. It is only utilisation of credit that does, and such utilisation is subject to verification and assessment by an Assessing Officer. The exchange of communications between 12.02.2019 to 26.03.2019 reveal that the petitioner has been diligent in making efforts to open the portal and upload the forms. In the light of the above, the respondents are directed to do the needful forthwith to enable the petitioner to upload the requisite forms - Petition allowed.

Summary

Issues:
1. Reopening of GST Portal for filing Form GST TRAN-1.
2. Availability of input tax credit under the new GST regime.
3. Legal implications of technical glitches on the GST Portal.

Analysis:
1. The petitioner sought a directive to reopen the GST Portal to enable filing of Form GST TRAN-1 for carrying forward unutilized amounts of input tax credit due to the introduction of Goods and Service Tax (GST) on 01.07.2017. The petitioner faced difficulties in uploading the form by the stipulated deadline of 27.12.2017, citing technical glitches on the portal. The petitioner contended that denial of the claim to file TRAN-1 was unjust and against natural justice principles, especially after a circular was issued on 03.04.2018, addressing IT grievances on the GST Portal.

2. The respondents argued that the petitioner failed to utilize the extended time provided by the Government to transition input tax credit to the new GST regime, as the facility for filing TRAN-1 was withdrawn after 28.12.2017. The respondents maintained that the petitioner was negligent and not entitled to avail the input tax credit. The court noted the subsequent amendments to Rule 117, extending the deadline for submitting the declaration electronically in FORM GST TRAN-1, emphasizing the importance of establishing technical difficulties faced by the assessee.

3. The court highlighted the requirement for the assessee to prove technical glitches on the portal, as per the circular dated 03.04.2018, which was not a pre-existing condition before that date. The judgment emphasized the distinction between transitioning credit and utilizing it, underscoring the need for proper verification and assessment by the tax authorities. Relying on precedent cases from other High Courts, the court allowed the writ petition, acknowledging the petitioner's diligent efforts to resolve the portal access issues and directing the respondents to facilitate the uploading of requisite forms without imposing costs.

This detailed analysis of the judgment from the Madras High Court underscores the legal complexities surrounding the reopening of the GST Portal, availability of input tax credit, and the impact of technical glitches on compliance with GST regulations.