M/S Tarun Enterprises PVT. LTD. vs. Union Of INDIA & Ors.
Held
The Court allowed the writ petition, following its previous decisions in "Super India Paper Products Vs. Union of India" and "SRC Aviation (P) Ltd. v. Union of India". The Court held that taxpayers who genuinely attempted to file TRAN-1 within the deadline but faced technical glitches should be granted relief. The Court reasoned that the transitional credit is a form of property that cannot be deprived of an assessee except by authority of law, and that system inefficiencies should not penalize taxpayers. The Court directed the respondents to either re-open the online portal for the petitioner to file TRAN-1 electronically or to accept the same manually by 15th December, 2021. The respondents were further directed to process the petitioner's claims in accordance with law once the TRAN-1 Form is filed. The Court did not explicitly address the challenge to the vires of Rules 117 to 120A and the Circular No. 39/13/2018-GST, but by allowing the relief, implicitly found that the petitioner's right to claim credit was not extinguished by these provisions in the given circumstances.
Facts
The petitioner, M/s Tarun Enterprises Pvt. Ltd., filed a writ petition seeking directions to open the common portal for filing TRAN-1 electronically or to allow manual filing, or filing via GSTR 3B, to avail transitional credit. The petitioner claimed transitional credit of Rs. 71,25,873/- for one GSTIN and Rs. 27,30,375/- for another. The petitioner faced technical glitches while attempting to file TRAN-1 and had lodged complaints with the Nodal Officer and Chief Commissioner in July and August 2018, followed by representations in March 2020. The respondents contended that technical glitches could not be considered errors on the GST common portal.
Key Issues
1. Whether the Petitioner is entitled to avail transitional credit by filing TRAN-1 electronically or manually, or through Form GSTR 3B, despite facing technical glitches while attempting to file within the prescribed time? 2. Whether Rules 117 to 120A of the CGST Rules, 2017, and Circular No. 39/13/2018-GST dated 03.04.2018 are ultra vires the CGST/SGST Acts, 2017, and the Constitution of India? Petitioner's Arguments: The petitioner argued that they faced technical glitches while filing TRAN-1 and had made genuine attempts to file within the deadline, supported by complaint applications and representations. They relied on the High Court's decision in "Super India Paper Products Vs. Union of India" which allowed similar relief to taxpayers facing technical issues, and also cited "SRC Aviation (P) Ltd. v. Union of India" and "Triveni Needles Pvt. Ltd. v. Union of India" to support their claim that credit is a property and cannot be denied due to system inefficiencies. They sought to declare the impugned rules and circular as illegal and unconstitutional. Respondents' Arguments: The respondents argued that technical glitches on the portal could not be considered valid reasons for non-filing of TRAN-1, and that the due date for filing had passed.
Sections Cited
Rule 117, Rule 117(1A), Rule 120A
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Cause title — parties, addresses and appearances
O R D E R % 29.11.2021 MANMOHAN, J. (Oral)
Present writ petition has been filed with the following prayers: “i. To issue a writ of mandamus or a writ in the nature of mandamus or any other writ, order or direction, to direct the Respondents to open the common portal for the Petitioner to be able to file TRAN-1 electronically; or alternatively to allow the Petitioner to avail the said ITC by manually filing TRAN-1 or by furnishing the details in Form GSTR 3B or in any other manner so as to enable the Petitioner to avail the transitional credit of Rs.71,25,873/- for GSTIN 07AAACT4460C2ZO, and transitional credit of Rs. 27,30,375/- for the GSTIN 09AAACU0057C1ZR, in its respective electroni
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