Opening GST Portal to allow filing/Revision of TRAN-1. Supreme Court dismisses SLP of the Government against order of Punjab & Haryana High Court
ABCAUS Case Law Citation:
ABCAUS 3277 (2020) (03) SC
Important case law relied upon by the parties:
Krish Authomotors Pvt. Ltd. Vs UOI and other
Willowood Chemicals Pvt. Ltd. Vs. Union of India 2018(19) G.S.T.L. 228 (Guj.)
Siddharth Enterprises Vs The Nodal Officer
On the introduction of GST w.e.f. 1.7.2017, under Section 140 of CGST Act, 2017 read with Rule 117 of CGST Rules, 2017, every registered person was required to file electronically FORM GST TRAN-1 with respect to unutilized input tax credit of unutilized credit of duties/taxes paid under different erstwhile taxing statues (i.e. CENVAT and State VAT Input Tax Credit) paid on the inputs laying in the stock under erstwhile tax regime.
As per Rule 120A of the CGST Rules, 2017 a registered person may revise his declaration once and submit revised declaration within the time period specified in Rule 117, 118, 119 and 120 of CGST Rules, 2017
No time limit was prescribed under Section 140 of the CGST Act to carry forward unutilized credit, however under Rule 117 of the CGST Rules, 2017 a period of 90 days from appointed day i.e. 1.7.2017 was prescribed which was extended from time to time and ultimately last date was fixed 27.12.2017.
In the instant case, due to one or another reason, the traders (respondents) either could not upload prescribed form TRAN-1 electronically or incorrect form was uploaded which could not be corrected within prescribed time.
The traders had filed Writ Petitions before the Hon’ble High Court of Punjab and Haryana seeking direction under Article 226 of Constitution to Appellant Government/Department to permit them carry forward of unutilized credit of said taxes.
The Hon’ble High Court opined that introduction of Rule 117(1A) & Rule 120A and absence of any time period prescribed under Section 140 of the CGST Act indicated that there was no intention of government to deny carry forward of unutilized credit of duty/tax already paid on the ground of time limit.
The Hon’ble High Court agreed with the contention that GST is an electronic based tax regime and most of people of India are not well conversant with electronic mechanism. When most of the people are not able to upload simple forms electronically since there were a number of steps and columns in TRAN-1 forms, the possibility of mistake could not be ruled out.
The Hon’ble High Court noted that Division Bench of Gujrat High Court had dealt with issue involved at length. It had been held that denial of credit of tax/duty paid under existing Acts would amount to violation of Article 14 and 300A of Constitution of India. Unutilized credit was recognized as vested right and property in terms of Article 300A of the Constitution of India.
The Hon’ble High Court also noted that Delhi High Court had, after considering all issue, directed the Govt. to permit traders to either submit TRAN-1 form electronically by opening the electronic portal or allow them to tender said form manually.
Accordingly, the Hon’ble High Court had directed the Govt. to to permit the traders to file or revise where already filed incorrect TRAN-1 either electronically or manually statutory Form(s) TRAN-1 on or before 30th November 2019.
The Government had challenged the above direction of the Hon’ble High Court by filing a Special Leave Petition (SLP) which had been dismissed by the Hon’ble Supreme Court observing the following:
“In the facts and circumstances of the present case, we are not inclined to exercise our jurisdiction under Article 136 of the Constitution. We accordingly dismiss the Special Leave Petition.”
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