Highway Industries LTD. vs. Union Of INDIA And Anr.

Held

The Court allowed the writ petition, following its previous decision in CWP-30949-2018 (Adfert Technologies Pvt. Ltd. vs. Union of India and others). The Court directed the respondents to permit the petitioner to file or revise their TRAN-1 forms, either electronically or manually, on or before December 31, 2019. In addition, the Court directed that the petitioner be permitted, as an alternative, to claim or enter the unutilized credit in question in their GST-3B forms for the month of January 2020, either electronically or manually. The reasoning was based on the concession made by the respondents that the case was covered by the precedent judgment and the interim order from the Delhi High Court, which addressed similar grievances regarding the inability to claim transitional credit due to portal issues. The ratio decidendi is that taxpayers facing technical glitches or departmental inaction in filing transitional credit forms should be provided with a mechanism to claim their legitimate credit, even if it involves manual filing or alternative methods.

Facts

The petitioner, Highway Industries Limited, is engaged in manufacturing and selling automotive parts. Prior to July 1, 2017, the petitioner had unutilized Cenvat Credit of inputs and capital goods amounting to Rs. 13,61,06,767/-. They were able to transfer only Rs. 3,05,14,635/- to their electronic credit ledger, leaving Rs. 10,55,92,132/- unutilized. The petitioner attempted to file their TRAN-1 on August 28, 2017, but due to the discrepancy, the full amount of input tax credit (ITC) could not be carried forward. The petitioner contacted the GST helpline on August 30, 2017, but received no response. The GST portal for filing or revising TRAN-1 remained inaccessible, preventing the petitioner from carrying forward their accrued credit under the earlier tax regime to the GST regime. The petitioner sought permission to file or revise TRAN-1 forms.

Key Issues

1. Whether the petitioner should be permitted to file or revise their TRAN-1 forms, either electronically or manually, to carry forward their unutilized Cenvat Credit accrued under the previous tax regime, in light of the technical difficulties faced and the subsequent inaction by the respondents. The petitioner argued that they were unable to transfer their full unutilized Cenvat Credit due to discrepancies and portal issues, and despite attempts to rectify the situation, their GST portal for filing TRAN-1 was not opened. They relied on the judgment in CWP-30949-2018 (Adfert Technologies Pvt. Ltd. vs. Union of India and others) and an interim order from the Delhi High Court in Indusind Media Communications Ltd. & Anr. vs. Union of India & Ors., highlighting the severe financial implications of not being able to claim the credit. They requested directions to permit filing or revising TRAN-1 forms by December 30, 2019. The respondents conceded that the matter was covered by the aforementioned judgment of this Court and noted that the deadline for filing or revising TRAN-1 had been extended to December 31, 2019.