M/S. Radical Bio Organics LTD. vs. Assistant Commissioner (Central Taxes)

Held

The High Court disposed of the writ petitions in light of the Supreme Court's decision in Union of India v. Filco Trade Centre Pvt. Ltd. The Supreme Court had directed the Goods and Services Tax Network (GSTN) to open the common portal for filing or revising TRAN-1 and TRAN-2 forms for two months, from September 1, 2022, to October 31, 2022. Any aggrieved registered assessee was directed to file or revise their forms irrespective of whether they had filed a writ petition or if their case was decided by the IT Grievance Redressal Committee. GSTN was to ensure no technical glitches occurred during this period. Concerned officers were given 90 days thereafter to verify the claims and pass appropriate orders on merits after granting an opportunity to the parties. The allowed transitional credit was to be reflected in the Electronic Credit Ledger. The High Court found that these directions sufficiently covered the interests of the petitioners.

Facts

The petitioners, M/s. Radical Bio Organics Ltd., Krishna Medical Associates, and HIL Limited, filed writ petitions challenging the denial of transitional credit under the Goods and Services Tax (GST) regime. They sought directions to allow them to file or rectify their TRAN-1 forms, either electronically or manually, to claim this credit. The core issue revolved around the inability to file or correct these forms within the prescribed timelines, leading to the denial of credit. The petitioners argued that the system glitches and the strict adherence to deadlines by the authorities prevented them from availing their legitimate transitional credit, which was crucial for their businesses. The respondents, including GSTN and tax authorities, were represented by their respective counsels.

Key Issues

1. Whether Rule 117(1) and its proviso of the CGST/SGST Rules, 2017, prescribing a ninety-day limit for filing Form GST TRAN-1, are illegal, ultra vires the CGST Act, 2017, and violative of Articles 14, 19(1)(g), and 265 of the Constitution of India? (Petitioner's contention: Yes, the time limit is arbitrary and unreasonable. Revenue's contention: Not recorded.) 2. Whether the actions of the respondents in disallowing transitional credit claimed in Form TRAN-1, filed on specific dates, without due process, are illegal, arbitrary, and violative of principles of natural justice and constitutional provisions? (Petitioner's contention: Yes, due process was not followed. Revenue's contention: Not recorded.) 3. Whether the petitioners should be permitted to rectify clerical errors in their TRAN-1 forms or file them manually? (Petitioner's contention: Yes, to claim legitimate credit. Revenue's contention: Not recorded.)