2022 (2) TMI 946 - HC - GST

Permission to upload Form GST ITC-01 on the online portal - input tax credit under Section 18(1)(c) of the GST Acts - HELD THAT - It appears on plain reading of the communication regarding submission of I.T.C. 01, that the department tried to upload the ITC 01, but due to technical glitch in the GSTN portal, the authority concerned was unable to upload the ITC 01. The authority, thereafter, inquired with the E.D.P. Cell Gujarat as to what can be done in the matter. The E.D.P. Cell Gujarat, in turn, asked the Assistant Commissioner to inform the GSTN through a Nodal Officer. The Assistant Commissioner informed the Nodal Officer. However, nothing could be worked out - the writ applicant also is at fault because while trying to upload the Form ITC 01, it appears that a wrong offline tool was used. It is evident from the affidavit-in-reply filed by the department. If the writ applicant is otherwise entitled to claim the Input Tax Credit under Section 18(1)(c) of the Act, a technical glitch in the portal should not deprive him of such a claim. It was within the capacity of the department itself to resolve the controversy and see to it that the needful is done - Mr. Uchit Sheth, the learned counsel appearing for the writ applicant is right in his submission that had the department at the earliest point of time brought to the notice of his client about wrong offline tool being used by the writ applicant, then probably, something could have been worked out. The respondents are directed to do the needful and see to it that the writ applicant is able to claim the Input Tax Credit by uploading the Form ITC 01. Let this exercise be undertaken at the earliest and completed within six weeks from the date of receipt of the writ of this order - application disposed off.

Summary

Issues Involved:
1. Entitlement to claim Input Tax Credit (ITC) under Section 18(1)(c) of the GST Act.
2. Technical glitches in the GST portal preventing the upload of Form GST ITC-01.
3. Use of an incorrect offline tool for filing Form GST ITC-01.
4. Departmental response and actions regarding the technical issues and ITC claim.

Detailed Analysis:

1. Entitlement to Claim Input Tax Credit (ITC) Under Section 18(1)(c) of the GST Act:
The writ applicant, a proprietary concern, sought to claim ITC on goods held in stock as of the transition date by filing Form GST ITC-01, following the cessation of the composition scheme under Section 10 of the GST Act. The applicant was initially eligible for the composition scheme until 31st March 2018 and opted out effective 1st April 2018. Consequently, the applicant became entitled to claim ITC under Section 18(1)(c) of the GST Act. The conditions for claiming such ITC are stipulated in Rule 40 of the Central/Gujarat Goods and Services Tax Rules, 2017.

2. Technical Glitches in the GST Portal Preventing the Upload of Form GST ITC-01:
The applicant attempted to upload Form GST ITC-01 within the extended time limit as per Notification No.42/2018-Central Tax dated 4th September 2018. However, due to technical issues on the GST portal, the form could not be uploaded, despite multiple attempts and requests to the concerned authorities. The Assistant Commissioner of State Tax acknowledged receiving the ITC-01 in a CD and other records, but was unable to upload the form due to the technical glitch in the GSTN portal.

3. Use of an Incorrect Offline Tool for Filing Form GST ITC-01:
The respondent's affidavit-in-reply indicated that the applicant used the wrong offline tool for filing Form GST ITC-01. The affidavit clarified that the tool used by the applicant was for filing returns and not for ITC-01. The screenshot provided by the applicant showed the use of an offline tool version 2.2.3, which was not the correct version for ITC-01. The correct version was ITC_Offline_v1.0, released on 12th January 2018. This mistake contributed to the failure in uploading the form.

4. Departmental Response and Actions Regarding the Technical Issues and ITC Claim:
The department's affidavit acknowledged the applicant's attempts and the technical issues faced. However, it was also noted that the applicant used an incorrect tool, which compounded the problem. Despite this, the court emphasized that a technical glitch should not deprive the applicant of their rightful ITC claim. The court directed the respondents to find a solution to allow the applicant to upload the correct form and claim the ITC worth approximately ?5 lakh. The department was instructed to complete this process within six weeks from the date of receipt of the court's order.

Conclusion:
The court recognized the applicant's entitlement to claim ITC under Section 18(1)(c) of the GST Act and acknowledged the technical issues that prevented the upload of Form GST ITC-01. Despite the applicant's use of an incorrect offline tool, the court directed the department to facilitate the upload of the correct form and ensure the applicant could claim the ITC. The judgment highlighted the importance of resolving technical issues to uphold the applicant's rights and directed the department to complete the necessary actions promptly.