Cabcon INDIA LTD & Anr vs. Union Of INDIA & Ors

Held

The Court held that the petitioners are entitled to file their individual tax credit in GSTR-3B forms for the month of July 2022, to be filed in August 2022. This decision is based on the principle that assesses should not be prejudiced due to procedural technicalities when their right to input credit has crystallized, especially in cases of technical glitches or system issues. The Court followed the reasoning in the Division Bench judgments of this Court and the Bombay High Court, which affirmed directions to allow assesses to claim credit. Instead of directing the portal to be opened, which was considered a difficult exercise, the Court adopted a more assessee-friendly approach similar to the directions in Hans Raj Sons vs. Union of India and Amba Industrial Corporation vs. Union of India. The genuineness of the petitioners' claim will be subject to verification by the respondent GST authorities. If the authorities find the case to be similar to the facts in the cited decisions, the claim shall be allowed. No specific issue was expressly left undecided.

Facts

The petitioners, Cabcon India Limited and another, filed a writ petition challenging an order or action by the revenue authorities. The core issue revolves around the inability of the petitioners to file Form TRAN-1 within the prescribed time, leading to a denial of input tax credit. The petitioners contend that this inability was due to technical glitches, connectivity issues, or lack of sensitization with the GST system, and that their right to input credit had crystallized. The revenue authorities, represented by Union of India and Ors., argued that the facts of this case were not similar to those in previous judgments relied upon by the petitioners. The procedural history involves the petitioners approaching the High Court via a writ petition.

Key Issues

1. Whether the petitioners are entitled to claim input tax credit despite failing to file Form TRAN-1 within the stipulated time due to technical issues, thereby turning a procedural lapse into a denial of a vested right under the GST regime? Petitioner's Arguments: The petitioners argued that their right to input tax credit had crystallized and ripened into a vested right. They contended that procedural problems, such as technical glitches, connectivity issues, or lack of system sensitization, should not prejudice their entitlement to credit, especially when they had substantially complied with the law. They relied on the Division Bench judgments of this Court in Nodal Officer, Jt. Commissioner, IT Grievance, GST Bhawan – Vs – M/s. Das Auto Centre (dated 14.12.2021) and Principal Commissioner of CGST & CX, Howrah Commissionerate – Vs – Bengal Hammer Industries (P) LTD. & Ors. (dated 27th April, 2022), as well as an unreported decision of the Bombay High Court in Chep India Private Limited – Vs – Union of India & Ors. (dated 27th June, 2022). Revenue's Arguments: The respondents, represented by Mr. Banerjee, submitted that the facts involved in the present writ petition were not similar to the facts presented in the aforesaid judgments relied upon by the petitioners.