M/S. Ferrocare Machines PVT. LTD vs. Union Of INDIA Through Ministry Finance Dept. Revenue Central Board And Ors

Held

The Court disposed of the writ petitions in terms of a previous order dated April 13, 2022, passed by the Aurangabad Bench of the same High Court in connected matters. The Court allowed the petitioners to file and correct their TRAN-1 and TRAN-2 Forms. If online filing was not possible, manual filing was permitted. The Court directed that these forms should preferably be filed within three weeks. The jurisdictional assessing authority was instructed to pass orders on these filings within six weeks, considering the observations made in the referenced order. The Court clarified that any show cause notices issued during adjudication should also take into account the directions and observations in the present order. The ratio decidendi is that in cases of technical glitches preventing timely filing or amendment of TRAN-1, and where the petitioner is otherwise eligible for credit, the authorities should provide an opportunity for correction, even if statutory timelines have passed, by treating the relevant provisions as directory in such circumstances.

Facts

Multiple petitioners, including M/s. Ashoka Buildcon Ltd., Hira Movers, and others, filed writ petitions before the Bombay High Court. The core issue in these petitions revolves around the inability of the petitioners to file or amend their TRAN-1 Forms. This inability is attributed to technical glitches on the GST portal and the subsequent denial of requests for amendment, revision, or modification of the TRAN-1 Form. The petitioners sought relief from the High Court to allow them to rectify these forms, arguing that human errors and technical issues should not preclude them from claiming input tax credit.

Key Issues

1. Whether the period prescribed under Section 117 of the CGST Act for filing TRAN-1 Form is mandatory or directory, considering the petitioners' inability to file due to technical glitches and denial of amendment requests. Petitioner's Arguments: The petitioners contended that human errors should be rectifiable and that if technical glitches prevented the timely filing of TRAN-1 Form, they should be granted an opportunity to file it. They relied on the Bombay High Court's judgment in Heritage Lifestyles and Developers Pvt. Ltd. v. Union of India, which allowed correction of errors and filing of TRAN-1 due to technical issues. They also cited a recent Aurangabad Bench judgment allowing correction of TRAN-1 and filing of TRAN-2. Revenue's Arguments: The respondents (Union of India and others) argued that the period prescribed under Section 117 of the CGST Act is mandatory. They relied on the Bombay High Court's judgment in NELCO Ltd. v. Union of India, asserting that once the stipulated time for filing or amending TRAN-1 has expired, petitioners do not have a right to do so.