Title | LARSEN AND TOUBRO LIMITED and UNION OF INDIA |
Court | Madras high court |
Honarable judges | JUSTICE A.K.JAYASANKARAN NAMBIAR |
Citation | 2019 (12) GSTPanacea 69 HC Madras W.P(C).No.32968 OF 2019(U) |
Judgment Date | 19-12-2019 |
The petitioner in the writ petition is a taxpayer under the Kerala Value Added Tax Act, 2003, who transitioned to the Goods and Services Tax (GST) regime following the enactment of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Act in 2017. This transition entitled the petitioner to carry forward the tax paid on the purchase of goods during the VAT regime to the GST regime and to avail of the corresponding credit under the GST system.
The provisions governing the transfer of this credit under the CGST/SGST Act and Rules are detailed in Sections 139 to 143 of the Act and Rule 117 of the SGST Rules. According to these provisions, the petitioner was required to file a declaration in Form GST TRAN-1 by December 27, 2017, to successfully migrate the credit to the GST regime.
The crux of the petitioner’s grievance in the writ petition is that, despite their efforts to upload the necessary details on the designated web portal, they faced difficulties. This has led to complications in the transfer and availability of their due tax credit under the new GST system. The petitioner seeks redressal for this issue through the writ petition.
The petitioner in the writ petition is an assessee under the Kerala Value Added Tax Act, 2003, who migrated to the Goods and Services Tax (GST) regime following the enactment of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Act in 2017. This migration entitled the petitioner to carry forward tax credits from the VAT regime to the GST regime by filing a declaration in Form GST TRAN-1 before the deadline of December 27, 2017.
The petitioner attempted to upload the necessary details on the GST Network (GSTN) system but was unable to do so due to a technical glitch. Despite requests for assistance from the respondent authorities under the GST Act, the petitioner did not receive a favorable response. The respondents maintained that the petitioner failed to meet the procedural requirements before the cut-off date, and therefore, could not carry forward the accrued credit from the previous regime into the GST regime.
In the writ petition, the petitioner challenges the respondents’ decision to deny the transfer of the accrued credit. The petitioner contends that their substantial rights under the GST Act should not be forfeited due to a technical lapse beyond their control, which was caused by the system managed by the respondents. The petitioner’s counsel also argues that they had made attempts to revise the GST TRAN-1 form before the deadline, but these attempts were hindered by technical issues, preventing the revision from being completed on time.
The petitioner’s complaints about system errors and the alleged inability to upload the necessary details were considered by the respondents. The respondents have the capability to verify whether an assessee attempted to log into the system. The system logs maintained by the respondents clearly indicate cases where an assessee tried to log in but failed, and whether the inability to upload the necessary details was due to a system error.
In the petitioner’s case, the system logs show that an attempt was made to log into the system before December 27, 2017. This categorizes the petitioner under category B3, according to the respondents’ classification. For such assessees, the system would record the login attempt, but it must be established that the failure to upload details was due to a system error caused by the respondents.
The petitioner seeks judicial intervention to address this grievance, asserting that the technical failure should not be a reason to deny them the benefits they are entitled to under the GST regime.
The petitioner in the writ petition is an assessee under the Kerala Value Added Tax Act, 2003, who transitioned to the Goods and Services Tax (GST) regime following the enactment of the Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) Act in 2017. This transition allowed the petitioner to carry forward tax credits from the VAT regime to the GST regime by filing a declaration in Form GST TRAN-1 before the deadline of December 27, 2017.
Despite the petitioner’s efforts to upload the necessary details on the GST Network (GSTN) system, they encountered a technical glitch that prevented the successful submission of the form. The petitioner requested assistance from the respondent authorities under the GST Act but did not receive a favorable response. The respondents argued that the petitioner failed to comply with the procedural requirements before the cut-off date and thus could not carry forward the accrued credit from the previous regime into the GST regime.
The petitioner challenged this decision, asserting that their substantial rights under the GST Act should not be forfeited due to a technical lapse beyond their control, which was caused by the respondents’ system. The petitioner’s counsel further contended that attempts were made to revise the GST TRAN-1 form before the deadline, but these attempts were thwarted by technical issues.
The petitioner’s complaints about system errors and the alleged inability to upload the necessary details were considered by the respondents, who have the means to verify whether an assessee attempted to log into the system. The system logs maintained by the respondents clearly indicate cases where an assessee tried to log in but failed and whether the inability to upload the necessary details was due to a system error. In this case, the system logs confirmed that the petitioner attempted to log into the system before December 27, 2017. This categorized the petitioner under category B3 according to the respondents’ classification, which requires establishing that the failure to upload details was due to a system error caused by the respondents.
In the hearing, the learned counsel for the petitioner and the learned Standing Counsel for the respondents presented their arguments. After considering the facts and circumstances of the case and the submissions made, it was found that since it was undisputed that the petitioner attempted to upload the necessary details and that the system logs confirmed this attempt, the petitioner should not be denied the substantive benefit of carrying forward the credit earned under the previous regime. This conclusion was supported by the precedent set by the Delhi High Court in Blue Bird Pure Pvt. Ltd. v. Union of India and Others [(2019) 68 GSTR 340 (Delhi)], and the Himachal Pradesh High Court’s decision dated November 16, 2019, in CWP No. 2169 of 2018 (Jay Bee Industries v. Union of India and Others), which held that accrued tax credits cannot be denied due to technical lapses.
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