M/S Nagorao Auto Engineering Works Telghani Naka Raipur vs. Union Of INDIA

Held

The Court allowed the writ petition, holding that the petitioner should be permitted to submit the TRAN-1 Form. The Court endorsed the views of various High Courts, including the Kerala High Court in Union of India & Ors. Vs. Merchem India Pvt. Ltd. and the Punjab & Haryana High Court in Adfert Technologies Pvt. Ltd. v. Union of India, which recognized the difficulties faced by taxpayers during the transition to GST due to technical glitches and the death of proprietors. The Court reasoned that input tax credit is a statutory right and should not be denied due to procedural or technical reasons beyond the taxpayer's control. The Court directed the respondents to allow the petitioner to submit the TRAN-1 Form either online by opening the portal or manually, and thereafter to process the claim for input tax credit within 60 days from the receipt of the order. The issue of challenging Rule 117 was implicitly addressed by granting relief despite it not being explicitly challenged.

Facts

The petitioner, M/s Nagorao Auto Engineering Works, sought to file TRAN-1 Form to claim input tax credit (ITC) under the GST regime. The proprietor passed away on September 20, 2017, shortly after the initial deadline for TRAN-1 submission (initially September 21, 2017, extended to December 27, 2017). The legal heirs, facing technical difficulties and glitches, were unable to upload the form even after further extensions granted by the GST Council up to March 31, 2019. The petitioner made representations to the Commissioner for permission to submit the form online or manually, which remained undecided, leading to the filing of this writ petition on February 4, 2021. The respondents argued that the petition was not sustainable as the petitioner had not challenged Rule 117 of the GST Rules and lacked evidence of technical glitches.

Key Issues

1. Whether the petitioner can be permitted to submit TRAN-1 Form for claiming input tax credit, considering the death of the proprietor and subsequent technical difficulties in uploading the form, despite missing the statutory deadlines and extended deadlines prescribed under Rule 117 of the CGST Rules, 2017? Petitioner's arguments: The petitioner contended that the inability to submit TRAN-1 was due to circumstances beyond their control, specifically the death of the proprietor and subsequent technical glitches on the GST portal. They argued that they were willing to comply but were prevented by these issues and sought a chance to upload the form either online or manually. They relied on the principle that technicalities should not defeat bonafide claims. Respondents' arguments: The respondents argued that the writ petition was not maintainable because the petitioner had not challenged Rule 117 of the GST Rules, which prescribes the time limit for submitting TRAN-1. They also contended that the petitioner failed to provide sufficient evidence of the specific dates of attempted submissions and the technical glitches encountered, making their claim at this belated stage unsustainable.