Jhas Industries vs. State Of U.P. And 4 Others

Held

The Court held that the mistake in the provisional GSTIN, specifically the inclusion of the erstwhile proprietor's PAN instead of the present proprietor's PAN, was attributable to the GST Network (respondent no. 6) and not the petitioner. The Court found the revenue's objection to be hyper-technical. The Court reasoned that the provisional GSTIN was to be generated by the GST Network upon verification of the petitioner's submitted email and mobile number. The error in data collection concerning the correct PAN was therefore the responsibility of the GST Network. The Court also noted that the petitioner had no further obligation to inform the GST Authority if the VAT registration was already corrected to reflect Alok Jha as the proprietor. The Court directed respondent no. 6 to verify the facts with the Assessing Authority. If the petitioner's registration certificate under the UP VAT Act, 2008, showed Alok Jha as the proprietor as of June 13, 2017, then the provisional GSTIN effective from July 1, 2017, was to be corrected to reflect Alok Jha's PAN. This correction was to be completed within one month. The Court further clarified that all invoices, declarations, and returns filed with the wrong GSTIN would stand corrected on a deemed basis. The petitioner would also be entitled to the benefit of the Court's decision in Writ Tax No. 477 of 2021.

Facts

The petitioner, Jhas Industries, represented by Alok Jha, sought rectification of a provisional GSTIN allocated by the GST Network (GSTN). The business was previously a proprietorship of Alok Jha's father, Rakesh Jha. On May 16, 2017, during the VAT regime, Alok Jha became the proprietor. Upon GST enforcement on July 1, 2017, a provisional GSTIN was generated. The petitioner claims the GSTIN incorrectly used Rakesh Jha's PAN ('AEBPJ7284A') instead of Alok Jha's PAN ('ABFPJ5438B') for the middle ten characters. The petitioner notified the Assessing Authority on May 22, 2017, and lodged a grievance on the GST portal on June 5, 2017. A fresh registration application under Rule 24(2) was filed on August 24, 2017, and allowed, resolving issues from that date onwards. However, for the period July 1, 2017, to August 23, 2017, the petitioner faced issues with transition ITC and filing returns due to the incorrect GSTIN.

Key Issues

1. Whether the mistake in the provisional GSTIN, specifically the inclusion of the erstwhile proprietor's PAN instead of the present proprietor's PAN, is attributable to the GST Network (respondent no. 6) or the petitioner? 2. Whether the petitioner's actions in notifying the authorities about the error before the GST regime's enforcement were sufficient to warrant rectification? Petitioner's Arguments: The petitioner argued that the error in the GSTIN was a mistake by the GST Network. They contended that they had acted diligently by informing the concerned authorities about the discrepancy before the GST Act came into force. They relied on the fact that the VAT registration was corrected to reflect Alok Jha as the proprietor before the GST regime commenced. The petitioner also highlighted that the subsequent fresh registration application was allowed, indicating the validity of their claim. Respondent's Arguments: The revenue authorities contended that the petitioner did not adopt the correct course of action while seeking fresh registration. They argued that the objection raised by the petitioner was hyper-technical.