Shakti Motors vs. State Of Gujarat

Held

The Court held that the writ-applicant (Shakti Motors) is entitled to the benefit of Order No. 01/2020-GST dated February 7, 2020. This order extends the period for submitting the declaration in Form GST TRAN-1 until March 31, 2020, for registered persons who could not submit it by the due date due to technical difficulties on the common portal and whose cases have been recommended by the Council. The Court directed Respondent No. 5, the Nodal Officer, to undertake the necessary exercise at the earliest, on or before March 30, 2020. The GSTN, upon receiving the proposal from the Nodal Officer, is to take an appropriate decision in accordance with the law, ensuring the writ-applicant does not suffer due to technical glitches. The ratio decidendi is that genuine technical difficulties in filing GST TRAN-1, when properly recommended, should not lead to the denial of eligible input tax credit, especially when the authorities have issued subsequent orders extending the filing period for such cases.

Facts

Shakti Motors, a proprietory concern, filed a writ application challenging the inability to file Form GST TRAN-1 on December 20, 2017, due to technical glitches on the GST system, which prevented the saving of CENVAT Credit and VAT Credit details. Consequently, the accumulated credit from returns filed under erstwhile laws for the period ending June 2017 could not be carried forward. The petitioner had previously communicated this issue to Respondent No. 3 on January 2, 2018, without a response. A previous order dated April 10, 2019, directed the issuance of notice and consideration of Circular No. 39/13/2018-GST. The Deputy State Tax Commissioner, Gandhinagar, subsequently recommended the petitioner's case to the Nodal Officer (Respondent No. 5) on February 25, 2020, acknowledging the technical difficulties.

Key Issues

1. Whether the petitioner is entitled to claim input tax credit in terms of Section 140 of the CGST Act, 2017, read with Rule 117 of the Central Goods & Service Tax Rules, 2017, and Section 140 of the SGST Act, 2017, read with Rule 117 of the Gujarat Goods & Service Tax Rules, 2017, despite failing to file Form GST TRAN-1 within the stipulated time due to technical glitches? Contentions: Petitioner: Argued that they attempted to file Form GST TRAN-1 within the stipulated time but were unable to save the data due to technical failures on the common portal. They relied on Circular No. 39/13/2018-GST and sought directions for the Nodal Officer to address the technical issue and facilitate filing. They also pointed to Order No. 01/2020-GST extending the time limit for filing TRAN-1 in cases of technical difficulties. Revenue/State: Submitted that the Deputy State Tax Commissioner, after being convinced of the technical glitches, recommended the petitioner's case positively to the Nodal Officer. The State did not otherwise contest the petitioner's claim based on technical issues.