Union Of INDIA vs. M/S Jagdalpur Motors

Held

The High Court held that the learned Single Judge was justified in directing the respondents to open the GST portal for the writ petitioner to revise FORM GST TRAN-1. The Court reasoned that the power granted by Rule 120A of the Central GST Rules, which allows for revision of the declaration, cannot be taken away by the issuance of a circular dated September 9, 2022. The Court emphasized that CENVAT credit, once validly taken, is indefeasible property, as established in the case of Dai Ichi Karkaria Ltd. The Court also referred to the Supreme Court's observation in Unichem Laboratories Ltd. that it is not the duty of the Revenue to deprive an assessee of a benefit available in law. The circular issued under Section 168A of the Central GST Act would not come in the way of an assessee revising its Form TRAN-1. The Court found no merit in the writ appeal and upheld the Single Judge's order. The operative direction was for respondents No. 3 and 4 to permit the writ petitioner to revise Form GST TRAN-1 if not already permitted, to enable them to claim transitional credit of eligible duties in respect of inputs.

Facts

The writ petitioner, M/s Jagdalpur Motors, an authorized TATA Motors dealer, was registered under the erstwhile Central VAT regime. As of June 30, 2017, it held goods worth ₹2,85,71,513/- on which CENVAT of ₹48,86,912/- had been paid, entitling it to transitional credit under Section 140 of the Central GST Act, 2017. The deadline for filing FORM GST TRAN-1 was September 30, 2017. Due to technical glitches, the petitioner could not file it. Rule 120A was inserted on September 15, 2017, allowing revision of TRAN-1 once. Subsequently, the Supreme Court in Union of India v. Filco Trade Centre Private Limited directed the opening of the GST portal for filing/revising TRAN-1 and TRAN-2 forms from September 1, 2022, to October 31, 2022, later extended to November 30, 2022. The petitioner's tax consultant mistakenly entered 'NIL' in the TRAN-1 form instead of the eligible CENVAT credit amount and submitted it, freezing the form with no option to edit. The petitioner represented to the authorities on October 27, 2022, to reset the portal, which was not addressed, leading to a writ petition.

Key Issues

1. Whether the learned Single Judge was justified in directing respondents No. 1, 2, and 5 to open the GST portal for the writ petitioner to submit the revised FORM GST TRAN-1, in light of Rule 120A of the Central Goods and Services Tax Rules, 2017? Petitioner's Arguments: The petitioner contended that they were unable to file the TRAN-1 form due to technical glitches and subsequently made a mistake while filing it, entering 'NIL' instead of the eligible CENVAT credit. They relied on the Supreme Court's decision in Union of India v. Filco Trade Centre Private Limited, which allowed for the opening of the portal for filing/revising TRAN-1 forms, and the principle that CENVAT credit is indefeasible property, as held in Dai Ichi Karkaria Ltd. v. Union of India and Siddharth Enterprises v. Nodal Officer. They argued that the circular dated September 9, 2022, should not override the power granted by Rule 120A to extend the period for revision. Revenue's Arguments: The appellants (Union of India) argued that the petitioner clicked the “submit” button without filling the data/figures correctly, and therefore, the GST Department cannot be faulted. They reiterated paragraphs 4.6 and 4.6.1 of the circular dated September 9, 2022, which stated that once the "Submit" button is clicked, the form gets frozen, and no further editing is allowed, and that no further opportunity to file or revise TRAN-1 would be available. They contended that sufficient opportunity had already been provided in light of the Supreme Court's decision.