M/S.Ram Auto vs. Commissioner Of Central Taxes And Central Excise

Held

The Court held that the petitioner's case was distinguishable from the case where an interim stay was granted by the Division Bench, as in this instance, the petitioner had filed Form GST TRAN-1 in time, and the grievance was solely about entering details in the wrong column due to an inadvertent error. The Court found the decision of the Delhi High Court in M/s. Blue Bird Pure Pvt. Ltd. Vs. Union of India and Others to be directly applicable. The Delhi High Court had held that the respondents ought to have provided a system facility for rectifying bona fide errors, and the deadline for revision coinciding with the filing deadline made the revision facility impractical. Consequently, the Court quashed the impugned communication dated 22.09.2020. The second respondent was directed to forward the petitioner's application to the third respondent (Goods and Service Tax Council) for verification of the jurisdictional Assistant Commissioner's findings. Upon satisfaction, the third respondent was directed to grant the relief sought by the petitioner within twelve weeks. The writ petition was allowed.

Facts

The petitioner, M/s. Ram Auto, a dealer in two-wheelers, had an input tax credit of Rs. 4,85,684/- under the previous VAT regime. While migrating to the GST regime, the petitioner inadvertently entered details of this credit in column 7(d) of the GST TRAN-1 form instead of column 7(a). Column 7(d) is for stock of goods not supported by invoices, whereas the petitioner had valid invoices. This error prevented them from utilizing the credit. The petitioner requested rectification, and the jurisdictional Assistant Commissioner, GST and Central Excise, Dindigul, vide communication dated 17.05.2019, found the mistake to be unintentional and recommended the case to GSTN. However, no further action was taken. The petitioner reiterated their request, leading to the impugned communication from the Commissioner of Central Taxes & Central Excise, Madurai, dated 22.09.2020, stating that the request could not be considered without a court order. The petitioner then filed the present writ petition.

Key Issues

1. Whether the petitioner is entitled to rectification of the inadvertent error in filing Form GST TRAN-1, specifically regarding the input tax credit, despite the prescribed timelines for filing and revision having expired? Petitioner's arguments: The petitioner contends that the error in filing Form GST TRAN-1 was purely inadvertent and unintentional. They relied on the finding of the jurisdictional Assistant Commissioner, dated 17.05.2019, which supported their claim. They also cited the Delhi High Court's decision in M/s. Blue Bird Pure Pvt. Ltd. Vs. Union of India and Others, which allowed rectification of similar bona fide errors. Respondents' arguments: The respondents argued that the petitioner failed to avail the opportunity to rectify mistakes by the specified deadline of 27.12.2017. They relied on Rule 120A of the Central Goods and Services Tax Rules, 2017, which permits revision of TRAN-1 once within the specified period. They also referred to a Division Bench stay in a similar case (W.A.(MD)No.929 of 2020), suggesting that such relief might not be permissible.