Neptune Plastics Th. Its Partner Yuvraj Singh vs. Union Of INDIA Th.Pr.Secy.Ministry Of Finance, Deptt. Of Revenue And Ors.

Facts

The petitioner, Neptune Plastics, sought to carry forward Rs. 9,96,637/- from its Cenvat account credit to the GST regime, which was introduced on July 8, 2017. Instead of filing the prescribed TRAN-1 form, the petitioner submitted a GSTR-3B return. The Assistance Commissioner, State Taxes (Technical) Jammu, vide an order dated March 7, 2019, denied the petitioner's claim, stating that the non-filing of TRAN-1 was not due to a technical glitch. The petitioner argued that lack of awareness about the procedure led to the delay in filing TRAN-1, but the credit was reflected in the GSTR-3B filed within the stipulated period. The respondents did not dispute the entitlement to the credit or its amount, only the procedural lapse of not filing TRAN-1 within the prescribed time. The petitioner also stated that the portal for submitting TRAN-1 was closed.

Held

The Court held that the petitioner cannot be deprived of the benefit of claiming the credit lying in its account on the stipulated date solely on the basis of procedural or technical wrangles, specifically the non-filing of the TRAN-1 form, especially when the petitioner had reflected the said credit in its GSTR-3B return. The Court found consonance with the argument that unutilized credit arising from duties/taxes paid under erstwhile Acts is a vested right that cannot be taken away on procedural or technical grounds. The Court referred to paragraph 14 of the Adfert Technologies Pvt. Ltd. judgment, which emphasized that the respondent authorities, having complete records of registered persons, cannot deprive petitioners of their valuable right of credit despite being aware of the facts and figures. The Apex Court had not interfered with the Adfert Technologies Pvt. Ltd. judgment. Consequently, the Court directed the respondents to permit the petitioner to submit the TRAN-1 form, either electronically or manually, on or before March 15, 2021.

Key Issues

1. Whether the petitioner can be deprived of carrying forward unutilized Cenvat credit amounting to Rs. 9,96,637/- solely on the ground of procedural non-compliance in filing the TRAN-1 form, especially when the credit was reflected in the GSTR-3B return filed within the prescribed period? (Question of law) Petitioner's arguments: The petitioner contended that they could not be deprived of their vested right to carry forward the unutilized credit due to procedural or technical issues, particularly since the credit was reflected in the GSTR-3B. They relied on the decision in Adfert Technologies Pvt. Ltd. and ors. v Union of India and Ors. The petitioner also highlighted that the TRAN-1 portal was closed, preventing electronic filing. Revenue/State's arguments: The respondents' primary objection was that the petitioner failed to submit the TRAN-1 form within the prescribed time. They argued that the petitioner should reverse the GSTR-3B and proceed with submitting TRAN-1.