Deepsons Auto Centre Through Its Proprietor Sandeep Agarwal vs. The Union Of INDIA

Facts

The petitioner, Deepsons Auto Centre, sought to switch from the Composition Scheme to a regular dealer under GST. They claim they could not file Form GST ITC-01 by the due date of August 12, 2018, due to portal errors. Permission to switch was granted by the Jurisdictional Officer of the State Tax on July 17, 2018. The petitioner approached the High Court seeking permission to file the form after the due date. Affidavits were filed by the State Tax Authorities and GSTN. The State Tax Authorities acknowledged the petitioner's grievance and requested GSTN to open the portal, citing technical glitches. However, GSTN denied any technical glitches, stating the portal was functioning correctly and the petitioner had saved invoices but not submitted the form within the prescribed time. GSTN also stated they had not received a communication from the State Nodal Officer.

Held

The Court acknowledged the borderline situation and the petitioner's bonafide and prompt complaint after the due date. It noted that the petitioner claimed a loss of ITC to the tune of Rs. 5.00 lakh if the switchover was not permitted. The Court referred to the proviso to Rule 40(1)(b) of the JGST Rules, 2017, which confers power upon the Commissioner of State Tax to extend the time limit. The Court observed that the respondents interpreted this proviso as a power for extension in a class of cases generally, not for individual taxpayers, though no such restriction was apparent in the enabling provisions. Without making a definitive interpretation of Rule 40(1)(b) at this stage, the Court directed the petitioner to approach the Commissioner, State Taxes, with a request for extension of time for submission of Form GST ITC-01. The Commissioner was directed to consider this request in accordance with law and take a decision within four weeks of receiving the representation. The Court clarified that no observation made should be read as a conscious interpretation of Rule 40(1)(b).

Key Issues

1. Whether the petitioner should be granted permission to file Form GST ITC-01 after the due date of August 12, 2018, considering the alleged technical glitches on the GST portal, as per Rule 40(1)(b) of the JGST Rules, 2017? Petitioner's arguments: The petitioner contends that they made sincere attempts to submit Form GST ITC-01 by the deadline but the portal did not accept it, leading them to file complaints on August 13 and 14, 2018. They argue that the proviso to Rule 40(1)(b) of the JGST Rules, 2017, allows the Commissioner of State Tax to extend the time limit, and this is a fit case for such an extension. Revenue/State's arguments: The Respondent State Tax Authorities supported their communication to GSTN requesting portal access for the petitioner, acknowledging potential technical glitches. However, they later argued that since GSTN denied technical glitches, the power under Rule 40(1)(b) cannot be exercised in an individual case without extenuating circumstances. They referred to a notification extending the time limit for a class of persons in 2017. GSTN argued that no technical glitches were established at their end, the portal was functioning fine, and the non-submission of Form GST ITC-01 within the prescribed time limit is fatal to the petitioner's claim.