M/S.Anand Distributors vs. The Union Of INDIA

Held

The Court quashed the impugned order dated 28.08.2019 passed by the sixth respondent. The Court found that the case was squarely covered by a previous order of the same High Court in W.P.No.3328 of 2020, which was subsequently upheld by a Division Bench in W.A.No.788 of 2020. The reasoning was that the requirement for an assessee to establish a demonstrable glitch in the portal, as expressed in a circular dated 03.04.2018, was not anticipated by assessees prior to that date. The Court acknowledged that Rule 117 of the CGST Rules, 2017, allowed for extensions, with the final extended date being 31.03.2020. The impugned order was passed on 28.08.2019, well before the final extended date. The Court directed the respondents to facilitate the uploading of Form TRAN-1 for the petitioner within eight weeks. The ratio decidendi is that assessees should not be denied the benefit of TRAN-1 credit due to technical glitches on the GST portal, especially when the requirement to prove such glitches was not clearly communicated or anticipated.

Facts

The petitioner, M/s. Anand Distributors, a registered dealer under the TNVAT Act, 2006, migrated to the GST regime. The petitioner claims entitlement to a credit of Rs. 5,03,202/- upon the implementation of the CGST Act, 2017. The petitioner alleges inability to file Form GST TRAN-1 due to technical glitches despite multiple attempts. A representation was made to the sixth respondent, the Assistant Commissioner, GST & Central Excise Division, Thanjavur, which was rejected by an order dated 28.08.2019. The rejection stated a lack of evidence for a system error in the log. The petitioner filed a writ petition challenging this order, seeking to re-open and reinstate the online submission of TRAN-1 or manually accept the hard copy.

Key Issues

1. Whether the petitioner is entitled to relief for being unable to file Form GST TRAN-1 due to technical glitches, despite the impugned order stating no evidence of system error. Petitioner's contention: The petitioner argued that they made several attempts to file Form GST TRAN-1 but were prevented by technical glitches. They relied on the principle that assessees should not be penalized for system errors and that the requirement to prove technical difficulties was not anticipated prior to 03.04.2018. They cited decisions from the Punjab and Haryana High Court and Gujarat High Court. Revenue's contention: The respondents reiterated the stand in the impugned order, contending that no relief could be granted in writ proceedings and that the petitioner failed to provide evidence of a system error.