Javed Ahmed Khan vs. Deptt Commissioner Of Revenue State Tax Ballygunge And Ors
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The appellant, Javed Ahmed Khan, is challenging an order dated February 7, 2023, passed by the Deputy Commissioner of Revenue, State Tax, Ballygunge, which rejected his TRAN-1 application for transitional credit amounting to Rs. 35,59,064/-. The rejection was based on the ground that the appellant obtained a new GST registration voluntarily on August 23, 2017, and was approved on November 8, 2017, thus not having transitioned from the existing law to the present law on the appointed day (July 1, 2017). The appellant contended that his application for new registration was not voluntary but was made pursuant to advice from the CBEC helpdesk, after he failed to receive a provisional ID for GST migration due to technical issues. The High Court was hearing an intra-court appeal against a Single Bench order that had directed affidavits to be called for.
Held
The Court held that the appellant's application for new GST registration was not voluntary but was made pursuant to the direction issued by the CBEC helpdesk. The Court found that the appellant had emailed the CBEC helpdesk on June 27, 2017, requesting a reissue of his provisional ID for GST migration due to technical breaches, as evidenced by a screenshot of ST-2. The helpdesk, in its reply dated August 16, 2017, acknowledged the appellant's issue of not receiving the provisional ID and advised him to apply for a new registration on the GST Common Portal. Therefore, the Court concluded that the appellant cannot be denied transitional credit on the ground that his application for new registration was voluntary. The impugned order dated February 7, 2023, was set aside, and the matter was remanded back to the Deputy Commissioner of Revenue, State Tax, Ballygunge, for fresh consideration of the appellant's TRAN-1 application, taking into account that the new registration was obtained on departmental direction. The respondent was directed to pass an appropriate order after affording a personal hearing to the appellant within three weeks of receiving the order.
Key Issues
1. Whether the appellant/writ petitioner's application for new GST registration, made on August 23, 2017, was voluntary or made pursuant to directions from the CBEC helpdesk, thereby impacting the eligibility for transitional credit under the CGST Act, 2017 and CGST Rules, 2017. Petitioner's Arguments: The appellant argued that the rejection of his TRAN-1 application was unjust as it failed to consider the circumstances he faced during the transition. He contended that his application for new registration was not voluntary but was filed on the advice of the CBEC helpdesk, evidenced by email correspondence, after he encountered technical difficulties in obtaining a provisional ID for GST migration. He relied on the email exchange with the CBEC helpdesk as proof that his actions were not self-initiated but a response to departmental guidance. Revenue/State's Arguments: The judgment does not record specific arguments made by the Revenue/State regarding the voluntary nature of the registration or the eligibility for transitional credit.
Sections Cited
Rule 8
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common judgment and order.
The order which was impugned in the writ petition dated 7th February, 2023, has rejected the TRAN-1 filed by the appellant/writ petitioner on the ground that the appellant had filed an application for new registration in form GST REG-01 in terms of Rule 8 of the CGST Rules, 2017, voluntarily on 23rd August, 2017 and was approved on 8th November, 2017 and accordingly the appellant/writ petitioner had not filed GSTR-3B return for the month of July, 2017. As the appellant/writ petitioner did not transit from existing law to present law on the appointed day, that is, on 1st July, 2017, but took new registration voluntarily, the entire claim of CGST in TRAN-1 of Rs.35,59,064/- was rejected. Thus, it has to be seen
3 as to whether the appellant/writ petitioner had voluntarily applied for registration in terms of Rule 8 of CGST Rules, 2017. This appears to be not voluntary act of the appellant/writ petitioner but pursuant to certain direction given by the CBEC helpdesk. The appellant sent an email dated 27th June, 2017 to the CBEC helpdesk requesting to reissue a provisional ID for GST migration. The appellant/writ petitioner had enclosed the screenshot of ST-2 to show that there was technical breach in obtaining the provisional ID for GST migration. The helpdesk in reply sent an email dated 16th August, 2017, while recording the stand taken by the appellant that they did not receive the provisional ID and password to migrate to the GST and they advised to apply for new registration on the GST Common Portal. Thus, pursuant to such advice rendered by the CBEC helpdesk vide email dated 16th August, 2017, the appellant/writ petitioner had applied for a new registration on the GST Common Portal, therefore, the said application cannot be stated to be a voluntary application but pursuant to the direction issued by the helpdesk. Therefore, the appellant cannot be non-suited of the said ground. Therefore, we are of the view that the claim made by the appellant/writ petitioner for transitional credit has to be reconsidered bearing in mind that the
4 application made by the appellant/writ petitioner for new registration was not voluntary but pursuant to the direction issued by the CBEC helpdesk.
For the aforesaid reasons the appeal as well as the writ petition is allowed and the impugned order dated 7th February, 2023, is set aside and the matter is remanded back to the Respondent No.1, Deputy Commissioner of Revenue, State Tax, Ballygunge to consider the application filed by the appellant/writ petitioner afresh bearing in mind the observations made in the preceding paragraphs which are to the effect that the application filed by the appellant/writ petitioner for new GST registration was not voluntary but on the direction issued by the department. In this regard, appropriate order be passed after affording an opportunity of personal hearing to the appellant/writ petitioner within three weeks from the date of receipt of server copy of the order.
With the aforesaid directions, the appeal along with the applications and the writ petition are disposed of.
[T.S. SIVAGNANAM] CHIEF JUSTICE
[CHAITALI CHATTERJEE (DAS), J.]
Reproduced from the public record of the Calcutta High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.