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2022 (2) TMI 846 - HC - GSTTransitional Credit - Input service distribution - availment of credit of various input transactions as the ISD for distributing proportionate credit to each of the business premises in accordance with Rule 7 of the Cenvat Credit Rules - HELD THAT - The respondents cannot raise their hands in despair saying that it is not possible to correct or take care of the technical glitches. The writ applicant herein has been running from pillar to post requesting the respondents to provide a solution and take care of the technical error and glitch that occurred as regards furnishing the GSTR 6 return for recording and distributing the ISD credit of ₹ 20,52,989/-. As usual, there is no response at the end of the GSTN. The writ applicant is not allowed to distribute the ISD credit of ₹ 20,52,989/- as the same has not been recorded, reported and declared in the GSTR 6 return. Mr. Tripathi is right in his submission that the credit is a tax paid by the registered person on input transactions and therefore, the credit of such tax already paid to the credit of the Central Government is a vested right of the person. Such vested right cannot be defeated on account of any irregularity in the system evolved by the Government. The respondents are directed to allow the writ applicant to furnish manually the GSTR 6 return with details of the ISD credit of ₹ 20,52,989/- and also permit distribution of such credit to the constituents of the writ applicant. Let this entire exercise be undertaken within a period of six weeks from the date of the receipt of writ of this order - Petition allowed.
Issues Involved:
1. Technical glitches in GST network affecting the filing of GSTR-6 return. 2. Non-recording and distribution of ISD credit of ?20,52,989/-. 3. Petitioner's right to manually file GSTR-6 return. 4. Respondents' failure to address the technical issue. 5. Petitioner's vested right to ISD credit. Issue-wise Detailed Analysis: 1. Technical Glitches in GST Network Affecting the Filing of GSTR-6 Return: The petitioner, a public limited company engaged in manufacturing chemical products, faced issues due to an error in the GST network. The GST network failed to include the ISD credit balance of ?20,52,989/- in the return, showing only ?2,96,528/-. Despite multiple representations to the Nodal Officer and jurisdictional Assistant Commissioner of GST, the issue remained unresolved. 2. Non-recording and Distribution of ISD Credit of ?20,52,989/-: The petitioner argued that the un-utilized ISD credit should have been transferred to the GST regime. However, due to the technical glitch, the ISD credit was not recorded. The petitioner could not distribute the ISD credit to its business premises as required under Rule 7 of the Cenvat Credit Rules. 3. Petitioner's Right to Manually File GSTR-6 Return: The petitioner sought relief through a writ application under Article 226 of the Constitution of India, requesting permission to manually file the GSTR-6 return with details of the ISD credit. The court referenced a similar case (M/s. Vishnu Aroma Pouching Pvt. Ltd. Vs. The Union of India) where manual filing was permitted due to system failures. 4. Respondents' Failure to Address the Technical Issue: The respondents argued that the petitioner failed to follow the due procedure for distributing the TRAN-1 credit. However, the court noted that the petitioner had been trying to resolve the issue since the error occurred and that the respondents did not provide any remedial measures. The court emphasized that the respondents could not dismiss the issue by citing technical glitches. 5. Petitioner's Vested Right to ISD Credit: The court upheld the petitioner's argument that the credit is a tax already paid and thus a vested right. This vested right cannot be defeated due to system irregularities. The court directed the respondents to allow the petitioner to manually file the GSTR-6 return and distribute the ISD credit of ?20,52,989/- to its constituents. Conclusion: The petition was allowed, directing the respondents to permit the petitioner to manually file the GSTR-6 return and distribute the ISD credit within six weeks. The court emphasized that technical glitches should not impede the petitioner's right to the ISD credit.
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