M/S.Sekar And Co vs. The Principal Secretary /

Held

The Court allowed the writ petition. It 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 Court noted that the requirement for an assessee to establish a demonstrable technical glitch, as mentioned in a circular dated April 3, 2018, was difficult for assessees to anticipate and collect proof for, especially before such a requirement was explicitly stated. The Court acknowledged that the mass of litigation arising from Rule 117 had defeated the object of the GST enactment. The ratio is that where an assessee demonstrates genuine technical difficulties in filing TRAN-1, and the issue has been considered favorably by higher judicial pronouncements, relief should be granted to facilitate the transition and credit utilization. The respondents (Assistant Commissioner of Commercial Taxes and Superintendent, GST Range South) were directed to facilitate the uploading of Form TRAN-1 by the petitioner within eight weeks.

Facts

The petitioner, M/s. Sekar & Co., a dealer registered under the TNVAT Act, 2006, migrated to the GST regime. They sought to claim credit for eligible duties on inputs held in stock as of June 30, 2017, as per Section 140(3) of the CGST Act. This required filing Form GST TRAN-1 electronically on the common portal, initially within 90 days, with the final extended due date being March 31, 2020. The petitioner claims they could not file TRAN-1 due to technical glitches, despite attempts to submit it manually on January 8, 2019, and September 1, 2018, and representations made. A screenshot of an upload attempt on March 27, 2019, was also provided. The respondents argued that the petitioner had missed the deadline and no relief could be granted.

Key Issues

1. Whether the petitioner is entitled to relief for being unable to file Form GST TRAN-1 due to alleged technical glitches, despite the extended due date of March 31, 2020, having passed? (Question of law and fact, turning on Section 140(3) and Rule 117 of the CGST Act and Rules). Petitioner's Contentions: The petitioner argued that technical glitches prevented them from filing Form TRAN-1 within the stipulated period, even with extensions. They had made efforts to file manually and submitted representations. They relied on the principle that the object of GST is to streamline, and the mass of litigation generated by Rule 117 defeats this purpose. Respondents' Contentions: The respondents contended that the petitioner had missed the extended deadline of March 31, 2020, and therefore, no relief could be granted in writ proceedings.