Shardaben Jayantilal Patel vs. Union Of INDIA

Held

The Court held that the respondents failed to resolve the issue raised by the writ applicant. It was not disputed that the applicant had filed Form TRAN-1 electronically within the time limit, but it was not successfully uploaded due to technical glitches on the portal. The Court found no fault on the part of the writ applicant in claiming the CENVAT credit. The respondents had neither rejected the claim nor resolved the technical issue of transitional credit not being reflected in the electronic credit ledger, despite various representations made by the applicant. Therefore, the Court directed the respondents to consider and act upon the representation dated January 30, 2019, and decide the claim of the writ applicant in accordance with law, taking appropriate action for transitional credit in the electronic credit ledger within four weeks. The Court explicitly stated that it had not examined the merits of the eligibility of the claim for transitional credit.

Facts

The writ applicant, M/s. Jai Electrical Industries, a manufacturer of electrical goods, was registered under the Central Excise Act and migrated to the GST Act from July 1, 2017. The applicant claimed eligible CENVAT credit of Rs. 8,35,435/- for the period of June 2017, as reflected in their ER-1 return filed on July 10, 2017. They submitted Form GST TRAN-1 within the stipulated time (before December 27, 2017) to claim this transitional credit under Section 140(1) of the CGST Act. However, the credit did not reflect in their electronic credit ledger due to alleged technical glitches in the GSTN system. Despite raising grievances on the GST portal with supporting documents, the issue remained unresolved. The applicant filed a writ petition seeking a mandamus to direct the respondents to act on their representations and grant the transitional credit.

Key Issues

1. Whether the petitioner is entitled to claim transitional credit under Section 140(1) of the Central Goods and Services Tax Act, 2017, and Rule 117 of the CGST Rules, 2017, when Form GST TRAN-1 was saved but not successfully uploaded due to technical glitches? Petitioner's contention: The petitioner argued that they had filed Form TRAN-1 within the prescribed time limit, but the transitional credit did not reflect in their electronic ledger solely due to technical difficulties on the GSTN portal. They contended that despite numerous reminders and representations, the respondents failed to resolve the technical glitches or reject the claim, leading to the petitioner being deprived of legitimate tax credit. Revenue's contention: The respondents argued that the petitioner failed to file TRAN-1 successfully within the stipulated period, and therefore, the eligible credit could not be reflected in the electronic credit ledger. They further submitted that the issue was identical to one decided in M/s. Siddharth Enterprises & Anr. Vs. The Nodal Officer & Ors, which was challenged before the Apex Court, and thus the writ application should not be entertained. They also emphasized that grievances must be resolved electronically through GSTN, and manual intervention is not possible.