Hospital Supply Company PVT. LTD. vs. Union Of INDIA And Ors.
Original PDF →Facts
A batch of writ petitions were filed before the High Court challenging orders or actions by GST authorities. The petitioners, including Haldia Petrochemicals Ltd., contended that due to technical glitches, connectivity issues, or lack of sensitization with the system, they were unable to upload their TRAN-1 returns within the stipulated time. This procedural issue prevented them from claiming input tax credit, which they argued had crystallized into a vested right. The petitioners relied on previous judgments from the same High Court and the Bombay High Court that dealt with similar situations of delayed TRAN-1 filings due to technical reasons. The revenue authorities argued that the facts in the present petitions were not similar to those in the cited judgments.
Held
The Court held that the petitioners were entitled to claim their input tax credit. While acknowledging the revenue's submission regarding factual dissimilarities, the Court found that the core issue of procedural difficulties preventing the filing of TRAN-1 returns, thereby impacting a vested right to credit, was common to the cited precedents. Following the principles established in the Division Bench judgments of this Court and the Bombay High Court, and specifically referencing the workable solution adopted in "Hans Raj Sons vs. Union of India" and "Amba Industrial Corporation vs. Union of India", the Court decided against directing the portal to be reopened, deeming it a difficult exercise. Instead, it granted liberty to the petitioners to file their individual tax credit claims in GSTR-3B forms for the month of June 2022, to be filed in July 2022. The Court directed that these claims would be allowed by the respondent GST authorities upon verification of their genuineness and similarity to the facts in the cited decisions. The Court did not expressly leave any issue undecided.
Key Issues
1. Whether the petitioners are entitled to claim input tax credit despite failing to upload their TRAN-1 returns within the prescribed time due to technical glitches or other procedural issues, thereby impacting a crystallized right to credit? (Mixed question of law and fact, turning on the interpretation of provisions related to transitional credit and the principles of substantial compliance under the GST regime). Petitioner's Arguments: The petitioners argued that their right to input tax credit had vested and was being denied solely due to procedural shortcomings beyond their control, such as technical glitches and connectivity problems. They relied on the principles laid down in the Division Bench judgments of this Court in "Nodal Officer, Jt. Commissioner, IT Grievance, GST Bhawan – Vs – M/s. Das Auto Centre" and "Principal Commissioner of CGST & CX, Howrah Commissionerate – Vs – Bengal Hammer Industries (P) LTD. & Ors.", as well as a Bombay High Court decision in "Chep India Private Limited – Vs – Union of India & Ors.", which allowed similar claims by permitting filing of TRAN-1 or alternative methods for claiming credit. Revenue's Arguments: The revenue authorities, represented by the Commissioner of State Taxes and CGST authorities, contended that the facts involved in the present writ petitions were not similar to the facts presented in the aforementioned judgments. They did not explicitly argue against the entitlement to credit on merits but rather questioned the applicability of the precedents based on factual dissimilarity.
Sections Cited
Form TRAN-1, GSTR-3B
AI-generated summary — verify with the full judgment below
2022
Sl no. 18-25
Ct no. 2
P.M.
W.P.A. 12239 of 2019 With WPA 10104 of 2021 With WPA 5065 of 2020 With With WPA 5627 of 2020 With WPA 5734 of 2020 with CAN 1 of 2020 CAN 3681 of 2020 With WPA 7926 of 2021 With Haldia Petrochemicals Ltd. & Anr.
Vs. Commissioner of State Taxes & Ors.
Mr. Vinay Kr. Shraff, Ms. Priya Sarah Paul, Mr. Kaushal Agarwal
……..for the petitioner in WPA 12239 of 2019, WPA 5627 of 2020, WPA 5734 of 2020, WPA 7926 of 2021 and Mr. A. Ray, Ld. G.P. Mr. T. M. Siddiqui, Mr. S. Mukherjee, Mr. D. Ghosh, Mr. N. Chatterjee
………for the State.
Mr. K.K. Maiti, Mr. Bhaskar Prosad Banerjee, Ms. Aishwarya Rajyashree, Mr. Tapan Bhanja
… for CGST authority
2
Mr. Siddhartha Lahiri, Mr. Tapan Bhanja.
………for the UOI. in
WPA 7926 of 2021. Mr. Sanjay Bhaumik, Mr. Indranil Banerjee, Mr. Subrata Mukherjee.
………for the petitioner in
WPA 5065 of 2020. Mr. Sandip Choraria, Mr. R. Chatterjee,
………for the petitioner, in
WPA 10104 of 2021. Ms. Sweta Mukherjee
… for petitioner in Mr. Sujit Mitra
…. for Union of India in Heard learned advocate appearing for the parties. All these writ petitions are heard and disposed of by this common order for similarity of the issues involved in all these writ petitions. According to the petitioner, in these bunch of writ petitions are similar in facts and question of law involved like in a bunch of cases which have been finally decided by the Division Bench of this Court by a judgement dated 14.12.2021 in the case of Nodal Officer, Jt. Commissioner, IT Grievance, GST Bhawan – Vs – M/s. Das Auto Centre being MAT 552
3 of 2020 with CAN 1 of 2020 and CAN 2 of 2020 and another Division Bench judgement of this Court dated 27th April, 2022 in the case of Principal Commissioner of CGST & CX, Howrah Commissionerate – Vs – Bengal Hammer Industries (P) LTD. & Ors. being APOT No. 40 of 2022 with GA 2 of 2022 and WPO 240 of 2019 and petitioner also relies on a recent unreported decision of the Bombay High Court, dated 27th June, 2022 in the case of Chep India Private Limited – Vs – Union of India & Ors. being Writ petition No. 1075 of 2021. In my view relevant portion of the judgement of the appeal Court, dated 14.12.2021 in the case of Nodal Officer, Jt. Commissioner, IT Grievance, GST Bhawan (Supra) are required to be quoted as hereunder : In the bunch of writ petitions the facts may be slightly different in the sense that each of the writ petition may have a peculiar problem but the common feature in all the writ petitions is that on account of a technical glitch or on account of the assesses not being felt sensitized with the system or on account of other connectivity issues or when the assesses/dealers are located in remote corners of the State Form TRAN-1 could not be uploaded in time or in appropriate form.
4 The other common but most important feature in all these cases is the entitlement of the writ petitioners to the input credit has crystallized. This crystallized right, which ripened into the vested right, is now being denied to the writ petitioners on account of procedural problem. In this factual background, we require to examine as to whether the order or direction passed by the learned Single Judge was appropriate or otherwise.
Thus, we are fully convinced that the decision which were rendered above have clearly brought out the difficulties faced by the assesses and also as to how the assesses having substantially complied with the requirement under law and having been entitled to credit on account of transition to the GST regime which is beyond the purview of the assessee and the assessee cannot be put to prejudice on account of technicalities. Thus, keeping the underlying principle in mind if the matter is examined then we are inclined to lean in favour of the writ petitioners and affirm the directions issued by the learned Single Judge. We note from the directions issued by the learned Single Judge that the authorities have been directed to open the portal so that the assessee may be able to file their respective TRAN-1 return or revise return or re-revise
5 2020 (34) GSTL 58 (P & H). In the said decision the Court while allowing the writ petition had granted two options one by directing opening of the portal and in case of non-opening of portal the writ petitioner/assessee will be entitled to make unutilized 195 (P & H).
Considering and following the aforesaid judgements of the Division Bench of this Court as well as Bombay High Court all these writ petitions are disposed of by granting liberty to the petitioners to file individual tax credit in GSTR-3b forms for the month of June, 2022 to be filed in the month of July, 2022 subject to verification of genuineness of the claim of the petitioner in all these cases and respondent GST authorities concerned shall allow the claim of these writ petitioners if it is found that the cases of the writ petitioners are similar to the facts involved in all the aforesaid decisions. Though Mr. Maiti, learned advocate appearing for the respondents submits that the facts involved in these writ petitions are not similar to the facts involved in the aforesaid judgments of the Division Bench of this Court but that will be subject to verification by the assessing officers. With this observation all these writ petitions being W.P.A. 12239 of 2019, WPA 10104 of 2021,
7 WPA 5065 of 2020, WPA 5573 of 2020, WPA 5627 of 2020, WPA 5734 of 2020 with CAN 1 of 2020, CAN 3681 of 2020, WPA 7926 of 2021 and WPA 8985 of 2020 stand disposed of.
(Md. Nizamuddin, 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.