Siddhi Developers vs. Union Of INDIA

Held

The Court held that the petitioner is entitled to claim credit of CENVAT and service tax as on June 30, 2017, in accordance with Section 140(1) of the CGST Act, 2017, read with Rule 117 of the CGST Rules, 2017. The Court acknowledged that the petitioner could not upload the GST TRAN-1 form due to technical glitches and that their representations were not considered. Relying on the settled legal position, including the judgment in M/s Siddharth Enterprises and Order No. 01/2020-GST, the Court directed Respondent No. 4 (the jurisdictional officer) to verify the petitioner's claim for CENVAT and service tax credit. Upon verification, the petitioner is to be permitted to file/upload the GST TRAN-1 form on the GST portal. The Court further directed that this verification and permission to upload should be completed within two weeks from the receipt of the order, enabling the petitioner to upload the form on or before March 31, 2020. The Court found that the due date contemplated under Rule 117 for claiming transitional credit is procedural and not mandatory.

Facts

The petitioners, Siddhi Developers, sought to claim transitional credit of service tax amounting to Rs. 1,15,35,563/-, which was admissible as CENVAT credit on June 30, 2017, under Section 140(3) of the Central Goods and Services Tax Act, 2017. They alleged that they were unable to file the GST TRAN-1 form due to technical glitches on the GST portal. Despite approaching the GST Department and the Nodal Officer, their grievance was not addressed. The petitioners relied on a previous judgment of the Gujarat High Court in M/s Siddharth Enterprises vs. The Nodal Officer, which allowed similar claims.

Key Issues

1. Whether the petitioner is entitled to carry forward the CENVAT credit of service tax amounting to Rs. 1,15,35,563/- as on June 30, 2017, under Section 140(3) of the CGST Act, 2017, read with Rule 117 of the CGST Rules, 2017, despite being unable to file the GST TRAN-1 form due to alleged technical glitches? Petitioner's arguments: The petitioner contended that they are legally entitled to carry forward the CENVAT and service tax credit available as of June 30, 2017, as per Section 140(1) of the CGST Act, 2017, and Rule 117 of the CGST Rules, 2017. They argued that failure to file the TRAN-1 form due to technical issues should not deprive them of this legitimate credit, which is crucial for their working capital and business continuity, citing the judgment in M/s Siddharth Enterprises. They also referred to Order No. 01/2020-GST extending the time limit for filing TRAN-1 in cases of technical difficulties. Revenue's arguments: The respondents initially stated that no technical glitches were found in the petitioner's case, which led to the denial of uploading the TRAN-1 form. However, they conceded that if the petitioner's claim for transitional credit is found to be genuine upon verification, they could be permitted to file the TRAN-1 form. The genuineness of the claim would be looked into by Respondent No. 4.