M/S. Banerji Memorial Club vs. The Deputy Commissioner (Tech) - Kerala High Court, 29 November 2019

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 29TH DAY OF NOVEMBER 2019 / 8TH AGRAHAYANA, 1941 WP(C).No.17323 OF 2019(M) PETITIONER : M/S. BANERJI MEMORIAL CLUB, ROUND NORTH, THRISSUR-1, REPRESENTED BY ITS HON. SECRETARY, IGNY MATHEW. BY ADVS. SRI.HARISANKAR V. MENON SMT.MEERA V.MENON RESPONDENTS : 1 THE DEPUTY COMMISSIONER (TECH), PRINCIPAL NODAL OFFICER, OFFICE OF THE COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI - 682 018. 2 THE JOINT COMMISSIONER (TECH), PRINCIPAL NODAL OFFICER, OFFICE OF THE COMMISSIONER, CENTRAL TAX AND CENTRAL EXCISE, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI - 682 018. 3 UNION OF INDIA, REPRESENTED BY SECRETARY TO GOVERNMENT, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, NEW DELHI- 110 001. 4 GOODS AND SERVICES TAX NETWORK, EAST WING, 4TH FLOOR, WORLD MARK-1, AEROCITY, NEW DELHI- 110 037. R1-R2 BY SRI.P.R.SREEJITH, SC, CENTRAL BOARD OF EXCISE AND CUSTOMS R3 BY SRI.T.V.VINU, CGC R4 BY SRI.P.R.SREEJITH, SC, GOODS AND SERVICES TAX NETWORK THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.11.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WPC.No.17323 of 2019 2 JUDGMENT The petitioner is a club which was holding a service tax registration during the pre-GST period. Subsequent to the implementation of GST with effect from 01.07.2017, the petitioner had sought for permission to migrate to the GST regime as provided under Section 25 of the CGST Act. It is relevant to note that the petitioner was also allotted a provisional GSTIN. Thereafter, since it was not able to complete the registration process during the time granted by the department, the provisional GSTIN that was allotted to them was cancelled. On account of of that, the petitioner was not able to file the GST returns from July 2017 onwards. The petitioner, however, approached the respondents for the allotment of a regular GSTIN and obtained one in July 2018. In the meanwhile, through a Notification dated 06.08.2018, assessees were given an opportunity to prefer their application for migration to the GST if they had not already done so, on or before 31.08.2018. Acting on the said Notification, the petitioner preferred an application (Ext.P2) for migration to the GST on 09.08.2018. While the application for migration had to indicate the provisional GSTIN that was earlier granted to the petitioner, the petitioner inadvertently showed the new GSTIN that had been allotted to him in July 2018. This led to the respondents taking a stand that the migration to the GST to cover the

WPC.No.17323 of 2019 3 period from July 2017 onwards could not be accepted. In the communication issued to the petitioner, which is impugned in this writ petition, the stand of the respondents is only that the application for migration was belated. The learned counsel for the petitioner would submit that the application itself was dated 09.08.2018, well before the last date of 31.08.2018 that was permitted by the Notification dated 06.08.2018. It would appear however that it was on account of the confusion created by the erroneous furnishing of the provisional GSTIN that a delay was occasioned while considering the application, which was ultimately rejected by the respondents. The prayer in this writ petition is to quash Ext.P7 communication issued by the 2nd respondent, and to direct the respondents to grant registration under Ext.P1 Notification to the petitioner so as to enable him to take transitional credit for the period from July 2017 onwards.

A statement as well as an additional statement have been filed on behalf of respondents 1, 2 and 4, wherein, the sequence of events leading to the rejection of the application preferred by the petitioner is narrated. The principal contention in justification of Ext.P7 order is that it was on account of the furnishing of erroneous GSTIN by the petitioner that the migration process could not be completed within time, and therefore had to be rejected by the respondents.

WPC.No.17323 of 2019 4

I have heard the learned counsel for the petitioner and also the learned Standing counsel for the respondents. On a consideration of the facts and circumstances of the case as also the submissions made across the Bar, I am of the view that it is not in dispute in the instant case that the petitioner had availed of the extended time limit granted through the Notification dated 06.08.2018 to prefer an application for migration on 09.08.2018, well before the last date of 31.08.2018 prescribed by the respondents. No doubt, there was an inadvertent error occasioned by the petitioner while furnishing the GSTIN number. While he ought to have indicated the provisional GSTIN that he once held, he provided the GSTIN number that was subsequently obtained by him in July 2018. At any rate, there is no dispute with regard to the identity of the petitioner either under the new number allotted to him or under the provisional number allotted to him earlier, and hence, there would be no prejudice caused to the respondents through a permission to migrate the accumulated credit from July 2017 onwards to the GST system with effect from July, 2018. In matters where the assessee risks the loss of a substantive right that accrued to him, the revenue ought to relax the procedural requirements so as to ensure that substantive benefits accrued to assessees are not denied on account of mere technical lapses. In the instant case, since I have found that there is no dispute with regard to the

WPC.No.17323 of 2019 5 identity of the assessee, who held a provisional GSTIN and later a regular GSTIN, and he was under the regulatory supervision of the GST department throughout the period, there cannot be any prejudice caused to the revenue by allowing the petitioner to migrate the accumulated credit in his account. Thus, I allow the writ petition, by quashing Ext.P7 and directing the respondents to treat the GSTIN granted to the petitioner in July 2018, as covering the period from July 2017 onwards, by making appropriate adjustments in the system. The respondents shall do the needful to comply the directions in this judgment within a period of one month from the date of receipt of a copy of this judgment, after intimation to the petitioner. A.K.JAYASANKARAN NAMBIAR JUDGE RKM

WPC.No.17323 of 2019 6 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 COPY OF NOTIFICATION NO.31/2018 ISSUED BY THE 3RD RESPONDENT, DATED 06.08.2018. EXHIBIT P2 COPY OF APPLICATION SUBMITTED BY THE PETITIONER BEFORE THE NODAL OFFICER, THRISSUR, DATED 08.08.2018. EXHIBIT P3 COPY OF REPLY ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER DATED 15.10.2018. EXHIBIT P4 COPY OF NOTIFICATION NO.44/2018 ISSUED BY THE 3RD RESPONDENT DATED 10.09.2018. EXHIBIT P5 COPY OF NOTIFICATION NO.72/2018 ISSUED BY THE 3RD RESPONDENT DATED 31.12.2018. EXHIBIT P6 COPY OF NOTIFICATION NO.67/2018 ISSUED BY THE 3RD RESPONDENT DATED 31.12.2018. EXHIBIT P7 COPY OF LETTER ISSUED BY THE 2ND RESPONDENT TO THE PETITIONER DATED 14.06.2019.