Krish Automotors Private Limited VS The Union of India

In this case, the Petitioner, who is registered under the Central Goods and Services Tax Act, 2017 (CGST Act), has filed a petition seeking several reliefs. One of the primary requests is for the Respondents (presumably tax authorities or related entities) to allow the Petitioner to manually file GST TRAN-I. This manual filing is intended to facilitate the crediting of Input Tax Credit (ITC) amounting to Rs. 1,41,02,394/- as per the provisions outlined in Section 140(3) of the CGST Act, 2017.

Section 140(3) of the CGST Act pertains to transitional arrangements for input tax credit under the Goods and Services Tax (GST) regime. It allows for the carry-forward of accumulated ITC from the pre-GST regime (such as excise duty or service tax) to the GST regime, provided certain conditions are met.

The Petitioner seeks to utilize this transitional credit (ITC) amount to offset its output tax liability, which is required under the GST laws. However, due to unspecified reasons, the Petitioner asserts the need to file GST TRAN-I manually rather than through the online electronic credit ledger system currently mandated under GST procedures.

The legal dispute revolves around the interpretation and application of GST transitional provisions, particularly concerning the method of filing GST TRAN-I and the allowance of ITC claimed therein. The Petitioner contends that they are entitled to this credit and that manual filing should be permitted to enable them to utilize it for discharging their GST liability.

The outcome of this petition will likely hinge on whether the court or relevant authority agrees to grant the Petitioner’s request for manual filing of GST TRAN-I and subsequent crediting of the substantial ITC amount claimed. This case underscores the complexities and challenges businesses may face in transitioning to the GST regime, particularly regarding the proper utilization of transitional credits and compliance with electronic filing requirements stipulated under the law.

Civil Application No. 9244 of 2019, wherein the court had allowed manual filing of GST TRAN-1 forms due to technical glitches on the GSTN portal, thereby granting relief to similarly placed taxpayers. He argued that the Petitioner should not be denied the benefit of claiming ITC due to a technical issue beyond their control. He also highlighted that denial of credit would lead to unjust enrichment for the Government without corresponding benefit to the taxpayer.

5. On the other hand, Mr. Rahul Verma, learned counsel appearing for the Respondents, opposed the petition arguing that the timelines for filing GST TRAN-1 were well-publicized and extensions were granted to facilitate compliance. He contended that allowing manual filing now would open floodgates of similar claims and undermine the legislative intent of timely compliance and transition to GST.

6. The Court considered the submissions and observed that the issue primarily revolves around the Petitioner’s inability to file GST TRAN-1 due to genuine difficulties faced during the transition period to GST. The Court noted the precedent set by the Gujarat High Court in similar circumstances and agreed that technical glitches on the GSTN portal should not deprive taxpayers of legitimate ITC claims.

7. After careful consideration, the Court directed the Respondents to permit the Petitioner to manually file GST TRAN-1 within a specified timeframe, notwithstanding the expiration of the electronic filing deadline. The Court reasoned that denying such relief would result in undue hardship to the Petitioner without advancing the purpose of GST legislation.

8. In conclusion, the Court’s decision underscored the balance between ensuring compliance with statutory deadlines and acknowledging genuine hardships faced by taxpayers during the transition to GST regime. The ruling provided relief to the Petitioner by allowing them to claim ITC as per Section 140(3) of the CGST Act, 2017, through manual filing of GST TRAN-1, thereby upholding the principles of equity and justice in tax administration.

The petitioner, registered under the Central Goods and Services Tax Act, 2017 (CGST Act), seeks relief through this petition to manually file GST TRAN-1 and claim Input Tax Credit (ITC) amounting to Rs. 1,41,02,394/- under Section 140 (3) of the CGST Act. The petitioner, a dealer/distributor of Maruti Suzuki India Limited, operates in trading and servicing motor vehicles and parts.

On 1st July 2017, when the CGST Act came into force, the petitioner became eligible for credit on goods purchased where central excise duty had been paid. The filing deadline for GST TRAN-1, initially set for 30th September 2017, was extended to 30th November 2017 and then to 27th December 2017. Due to the complexity of compliance dates and an oversight related to the extended deadline, the petitioner missed the opportunity to file GST TRAN-1 online within the stipulated time.

Efforts were made to seek permission for manual filing through representations to GST authorities and the Ministry of Finance, followed by the filing of this petition when no response was received. The petitioner cites a Gujarat High Court precedent where similar relief was granted to other taxpayers in comparable situations, emphasizing their entitlement to claim ITC despite missing the extended filing deadline.

The petitioner’s counsel, Mr. Aseem Mehrotra, referred to relevant judicial precedents where courts acknowledged taxpayers’ challenges in adhering to GST TRAN-1 filing deadlines, sometimes due to technical issues. Examples include orders from this Court in cases such as Bhargava Motors v. Union of India, M/s Blue Bird Pure Private Limited v. Union of India, and others, which recognized the difficulties faced by taxpayers in timely filing GST TRAN-1.

In conclusion, the petitioner urges the court to direct the respondents to permit manual filing of GST TRAN-1 and enable the credit of ITC as per Section 140 (3) of the CGST Act, highlighting consistent judicial recognition of taxpayers’ genuine difficulties in complying with statutory timelines under GST laws.

effectively address genuine grievances of taxpayers who, due to technical glitches or inadvertent errors, are unable to file or rectify their GST TRAN-1 forms within stipulated deadlines.

9. The counsel for the Petitioner further relied upon the decision of the Division Bench of this Court in W.P.(C) 11459/2018 titled Ralson India Ltd. v. Union of India and Ors. dated 9th August, 2019, wherein in identical circumstances, the Court had directed the Respondents to enable the Petitioner to manually file the TRAN-1 form.

10. Mr. Mehrotra submitted that the Petitioner has a valuable right to claim ITC under Section 140 (3) of the CGST Act, 2017 and the same cannot be defeated on technical grounds especially in view of the fact that it was a systemic failure.

11. Mr. Raghvendra Mehrotra, learned counsel appearing on behalf of the Respondents, submitted that the Respondents are conscious of the fact that a large number of taxpayers have been unable to claim credit under the Transitional Credit Scheme due to bona fide inadvertence or reasons beyond their control. The Respondents have filed an affidavit on behalf of the Respondents.

The petitioner, registered under the Central Goods and Services Tax Act, 2017 (CGST Act), filed a petition seeking relief to manually file GST TRAN-1 and claim Input Tax Credit (ITC) amounting to Rs. 1,41,02,394/-, which was eligible under Section 140(3) of the CGST Act. This credit pertained to central excise duties paid on goods purchased before the implementation of GST on 1st July 2017. The filing of GST TRAN-1 was originally required by 30th September 2017, with subsequent extensions to 30th November 2017 and finally 27th December 2017.

Due to the complexity of compliance timelines and an oversight by the petitioner’s accountant regarding the extended filing deadline, the GST TRAN-1 was not submitted electronically within the stipulated time. Despite making representations to various authorities, including the Ministry of Finance and the GST Council, no response was received, leading the petitioner to approach the court for relief.

The petitioner cited a precedent from the Gujarat High Court where similar circumstances had been addressed favorably, allowing other taxpayers to file their GST TRAN-1 and claim ITC under Section 140(3), despite missing the extended deadline of 27th December 2017 due to technical glitches and other genuine difficulties.

Several orders of the Delhi High Court were also referenced, highlighting cases where taxpayers faced technical issues with the GSTN portal or inadvertent errors in filing, leading the court to direct the authorities to either reopen the portal for electronic filing or accept manually filed GST TRAN-1 forms.

In essence, the petitioner sought judicial intervention to rectify what they claimed was a bona fide difficulty in filing GST TRAN-1 within the extended timeline, emphasizing the need for a fair and accessible grievance redressal mechanism for such issues rather than forcing every taxpayer into litigation for resolution.

The petitioner, a registered entity under the Central Goods and Services Tax Act, 2017 (CGST Act), filed a petition seeking relief to manually file GST TRAN-1 and claim Input Tax Credit (ITC) amounting to Rs. 1,41,02,394/-. This credit pertains to central excise duty paid on goods purchased before the implementation of GST on 1st July 2017. According to Rule 117 of the CGST Rules, 2017, GST TRAN-1 was to be filed by 30th September 2017, with subsequent extensions granted until 27th December 2017.

Due to overlapping compliance deadlines, particularly with the extended deadline for filing GSTR-1 ending on 31st December 2017, the petitioner’s accountant missed the GST TRAN-1 deadline of 27th December 2017. Despite making representations to GST authorities and the Ministry of Finance from March 2018, no response was received, prompting the petitioner to approach the court for relief.

The petitioner’s counsel referenced a Gujarat High Court judgment where similar circumstances allowed other petitioners to file GST TRAN-1 and claim ITC under Section 140 (3) of the CGST Act, despite missing the extended deadline. Several orders by the Delhi High Court also acknowledged technical glitches in the GSTN portal affecting taxpayers’ ability to file on time. These cases included Bhargava Motors, Blue Bird Pure Private Limited, Tyre Plaza, among others, where the court directed authorities to either reopen the portal for electronic filing or accept manual filings to facilitate ITC claims.

The court emphasized the genuine difficulties faced by taxpayers due to technical errors in the GSTN system and the failure of grievance redressal mechanisms within GST authorities. Each case highlighted the need for a fair opportunity for taxpayers to claim legitimate ITC benefits under GST laws.

Ultimately, the court directed the respondents to allow the petitioner to either electronically submit GST TRAN-1 if the portal was reopened or accept a manual submission by a specified date, ensuring due process in verifying and processing the ITC claim. This summary underscores the legal precedent and procedural complexities involved in resolving ITC claims under GST legislation.

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