9911796707
TMI Blog2024 (10) TMI 670X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CGST Act and Rule 41 (1) of the CGST Rules, alleges that the Petitioner has contravened the said two provisions since it has availed and utilised credit of Rs. 18,30,58,995/- (including Rs. 74,06,395/- as IGST, Rs. 15,74,90,681/- as CGST and Rs. 1,81,61,919/- as SGST) for payment of tax liability - The allegation in the impugned show cause notice might have had some substance if it had been the Respondents' case that its common portal was fully functional and TDN or the Petitioners could file Form GST ITC-02 electronically on the common portal. However, it was conceded that the GST portal was nascent during the relevant time, and GST ITC-02 was not available for filing electronically. Thus, neither the Petitioner nor TDN could be faulted for not filing Form GST ITC-02 electronically on the department s common portal. The record establishes, and in any event, it was not disputed, that TDN or the Petitioner couldn't file Form GST ITC-02 on the department s common portal during the relevant period because of the functionality issues relating to such a common portal. The Division Bench of the Rajasthan High Court in Pacific Industries Ltd Vs. Union of India [ 2022 (3) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, the manually filed forms by the TDN as expeditiously as possible. Petition allowed. - M.S. SONAK JITENDRA JAIN, JJ. For the Petitioner : Mr Prasad Paranjape, a/w Advocate Bhavya Varma i/by Lumiere Law Parters. For the Respondents : Mr J B Mishra, a/w Mr. Ram Ochani. JUDGMENT PER (M. S. SONAK, J.) 1. Heard learned counsel for the parties. 2. Rule. The rule is made returnable immediately at the request of and with the consent of the learned counsel for the parties. 3. The Petitioner challenges the show cause notice dated 17.08.2023 as a prelude to recovering or reversing the Input Tax Credit (ITC) of Rs. 18,30,58,995/-on the sole ground that the necessary GST IT 02 form was not filed by its transferor electronically but only manually thereby allegedly breaching the provisions of Section 18 (3) of the CGST Act read with Rule 41 of the CGST Rules. The petitioner contends that such notice is wholly without jurisdiction, arbitrary and void, given the admitted impossibility of filing such form electronically due to serious functionality issues plaguing the department s portal. 4. Mr. Paranjape, the learned counsel for the Petitioner, submits that the Petitioner, for the period bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant period, the department s portal did not have the facility of filing Form GST ITC-02 electronically. However, he referred to Rule 41 of the Central Goods and Services Tax Rules, 2017 ( CGST Rules ) to submit that a registered person shall, in the event of inter alia transfer or change in ownership of business for any reason, furnish the details in Form GST ITC-02 electronically on a common portal along with - request for transfer of unutilised input tax credit lying in his electronic credit ledger to the transferee. 10. Mr Mishra submitted that in this case, since the prescribed form was not filed electronically, the impugned show cause notice was issued to the Petitioner requiring it to show cause as to why the credit of Rs.18.30 crores (approximately) should not be recovered from the Petitioner. He submitted that in addition to this aspect, the Petitioner was called upon to show cause regarding other matters detailed in the impugned show cause notice. 11. Mr Mishra submitted that the impugned show cause notice was intra vires; therefore, no case was made to interfere with the same. He submitted that it was open to the Petitioner to raise all permissible defences in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional Assessing Authority to guide it on transferring credit from TDN to the Petitioner. 18. The Petitioner has pleaded that there was neither any response nor any guidance from the jurisdictional Assessing Authority despite such authority admittedly receiving the communication/letter dated 13 September 2017 containing full details of the transfer. Therefore, the Chartered Accountant Certificate dated 09 February 2018 was submitted to certify that the transfer of business from TDN to the Petitioner was effected with specific provisions for the transfer of liabilities. On 14 February 2018, the Petitioner submitted a letter dated 12 February 2018 informing the Respondents about the transfer of ITC from TDN to the Petitioner through Form GSTR-3B. This letter/communication is at Exhibit-I (pages 88-90 of the paper book of this Petition) 19. After about 5 to 6 years, the second Respondent issued an Audit Notice dated 28 April 2023 to the Petitioner proposing to recover and demand the ITC of Rs. 18,30,58,995/ with interest and penalty on the alleged ground of wrongful availment of ITC. The Petitioner submitted replies dated 17 May 2023 and 18 May 2023 to the Audit Notice dated 28 April ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease or transfer of business has been done with a specific provision for the transfer of liabilities. (3) The transferee shall, on the common portal, accept the details so furnished by the transferor and, upon such acceptance, the un-utilized credit specified in FORM GST ITC-02 shall be credited to his electronic credit ledger. (4) The inputs and capital goods so transferred shall be duly accounted for by the transferee in his books of account. 23. The impugned show cause notice, after referring to Section 18 (3) of the CGST Act and Rule 41 (1) of the CGST Rules, alleges that the Petitioner has contravened the said two provisions since it has availed and utilised credit of Rs. 18,30,58,995/- (including Rs. 74,06,395/- as IGST, Rs. 15,74,90,681/- as CGST and Rs. 1,81,61,919/- as SGST) for payment of tax liability. Pertinently, the only allegation in the impugned show cause notice is that the Petitioner, before availing of and utilising the credit of Rs. 18,30,58,995/- did not ensure that the prescribed Form GST ITC-02 was filed electronically on the common portal along with a request for transfer of unutilised input tax credit lying its electronic credit ledger to the transferee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excuse the performance (See State of M.P. v. Narmada Bachao Andolan 2011-7-SCC 639 ). 27. Besides, in the present case, it is not as if the TDN or the Petitioner did not comply with the requirement to file the form prescribed in the rules. The form was filed, and all essential details were furnished manually because the department rendered filing the form electronically impossible. Its portal was simply not functional enough to generate and accept the prescribed form during the relevant period. Thus, the only allegation is that the procedure of filing the prescribed form electronically was not complied with. By invoking the principles in the above maxims, which are now accepted as a part of our legal landscape, the respondents were bound to excuse the strict compliance with the procedural requirement, the performance of which was rendered impossible by the department itself. 28. Admittedly, TDN had, by communication/letter dated 22 September 2017, informed the jurisdictional Assessing Authority about the non-availability of Form GST ITC-02 functionality on the department s common portal. Besides, full details and particulars of the BTA were furnished to the Assessing Authority. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,88,35,905.60 along with interest and penalty. The Petitioner filed a detailed reply, but without considering such a reply, the jurisdictional Assessing Authority made an order dated 17 April 2023 confirming the demand in the show cause notice. 32. In the above facts and circumstances, which are almost identical to the facts and circumstances of the present case, the Division Bench of Allahabad High Court held as follows:- We have heard learned counsel for the petitioner and have gone through the reply dated 13.03.2023 submitted by the petitioner to the show cause as also the impugned order dated 17.04.2023 passed by the Respondent No. 2. Prima-facie, we find that the objections filed by the petitioner has not been considered by the respondent No. 2 and the order has been passed on technicalities. Shri Ankur Agarwal, learned counsel appearing for the Respondent No. 2 has vehemently argued in support of the impugned order. He submits that the averment of the petitioner to the effect that the objections have not been considered is ill founded inasmuch as the impugned order records that the objections have been filed and despite opportunity having been afforded to the petitioner for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allahabad High Court and the Gujarat High Court. It directs the Respondents to dispose of the show cause notice by considering the directions issued by the Allahabad High Court and the Gujarat High Court in the Petitioner s case. 35. In Pacific Industries Ltd Vs. Union of India, D. B. Civil Writ Petition No. 12190/2019) decided by the Division Bench of Rajasthan High Court at Jodhpur. The issue was about the Petitioner being deprived from submitting Form GST ITC-02A online and, consequently, deprived of the Input Tax Credit to the tune of Rs. 2,58,03,590/- through Form GSTR-3B. The Petitioner contended that Form GST ITC-02A was not available on the GSTN Portal for the entire period of 30 days from the registration of its separate business verticals, and as a consequence, the Petitioner was denied the opportunity to transfer the unutilised input tax credit to its new registration which became effective on 16 April 2019. The Petitioner claimed to have uploaded a manual copy and submitted the same to the Deputy Commissioner, CTO Ward, A-Circle Udaipur, on 14 May 2019, but the same was not accepted. The Petitioner also raised this issue with the GST Helpdesk, but there was no effective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed that until an appropriate provision is made for acceptance of such appeal electronically, filing of such appeal should be permitted manually. Again, even this decision is an authority for the proposition that the technicalities, mainly when not the party but the department creates them, should not be put forth by the department to defeat the statutory rights and entitlement of the parties. 40. Based on the facts on record and the decided cases referred to above in the case of this very Petitioner, we agree with Mr Paranjape s contention that the impugned show cause notice ought not to have been issued to the Petitioner. The Respondents were duty-bound to take cognisance of the decisions of the Allahabad, Gujarat, and Delhi High Courts in dealing with almost identical issues concerning this Petitioner. 41. For all these reasons, we quash and set aside the impugned show cause notice dated 17 August 2023 and direct the Respondents to consider, according to law, the manually filed forms by the TDN as expeditiously as possible. If, upon due consideration of the same, the Respondents still find that the ITC of Rs. 18,30,58,995/- was not due or was wrongly availed of and utilised ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
