National Internet Exchange Of INDIA vs. Union Of INDIA & Ors.

Held

The Court held that the Petitioner's difficulty was genuine and arose from an inadvertent human error and oversight. The Petitioner had filed TRAN-1 within the prescribed time and possessed documents evidencing payment of tax on inputs/input services under the erstwhile regime, making them eligible to carry forward the credit under Section 140 of the CGST Act read with Rule 117 of CGST Rules. The Court found that the Petitioner's substantive right should not be denied due to this bona fide error. Citing previous judgments where courts had directed the opening of the system for rectification of bona fide errors, and noting the dismissal of the department's SLP by the Supreme Court in Union of India & Ors. v. Adfert Technologies Pvt. Ltd., the Court allowed the Petitioner's request. The Respondents were directed to open the online portal for the Petitioner to re-file the rectified TRAN-1 form electronically or accept it manually within three weeks. The Petitioner's claim would then be processed in accordance with law, with the Respondents at liberty to verify its genuineness. The Petitioner would also be permitted to revise Form TRAN-2.

Facts

The Petitioner, National Internet Exchange of India, a not-for-profit company, had migrated to the GST regime and filed Form GST TRAN-1 on September 1, 2017, to carry forward CENVAT credit of Rs. 60,21,471/-. The Petitioner later realized an inadvertent error in not accounting for certain invoices on which service tax was paid under the erstwhile regime, amounting to Rs. 40,36,542/-. Despite representations to the respondents in March and November 2019, no action was taken. The Petitioner approached the High Court seeking directions to modify/revise Form GST TRAN-1, either by opening the GST portal or permitting manual submission of the corrected form.

Key Issues

1. Whether the Petitioner is entitled to revise its Form GST TRAN-1 due to a bona fide human error, considering the introduction of a new tax regime and the Petitioner's lack of prior experience with GST filings? (Section 140 of CGST Act, Rule 117 of CGST Rules) Petitioner's arguments: The Petitioner contended that the error was unintentional and inadvertent, arising from the complexity of the new GST regime and Form TRAN-1. They relied on several High Court judgments, including Blue Bird Pure Pvt. Ltd. v. Union of India and Ors., Arvind Beauty Brands Retail Pvt. Ltd. v. Union of India & Ors., A B Pal Electricals Pvt ltd v. Union of India & Ors., SRC Aviation (P) Ltd. v. Union of India and Ors., and Adfert Technologies Pvt. Ltd. v. UOI. They argued that the system should have provided a facility for rectifying bona fide errors. Respondents' arguments: The respondents did not file a counter-affidavit. The judgment notes that in similar matters, counter-affidavits had not been filed, and arguments were heard by a coordinate bench.