Asiad Paints Limited Vs. Union of India

Since common and akin issues are involved in these matters, the same are heard together and disposed of by this common order. The petitioners, who are registered dealers under the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘Act’), are seeking a direction to the respondents to permit them to file the TRAN-I statutory form either electronically or manually, thereby extending the time limit prescribed under Rule 117 read with Section 14C of the CGST Act, 2017, to carry forward the unutilized credit of duty paid under the Finance Act, 1994, and the VAT Act, 2003, to the common portal. The learned Senior Counsel, Sri G. Shivadass, representing the petitioners, submits that this very subject matter has been elaborately considered by the Hon’ble High Courts of Delhi, Punjab and Haryana, as well as Kerala, which have rendered decisions directing the respondent authorities to permit the registered dealers to file or revise the TRAN-I form, whether electronically or manually, thus extending the cut-off date prescribed under Rule 117. These rulings also reserve the liberty of the respondents to verify the genuineness of the claims made by the registered dealers on the merits of each case. Reliance is placed on several judgments that have addressed similar issues, emphasizing the procedural fairness and the need for accommodating the practical difficulties faced by the dealers in transitioning to the new tax regime under the GST framework. The petitions argue that the technical glitches and administrative challenges encountered while filing the TRAN-I form have unjustly impeded the petitioners’ ability to carry forward their legitimate tax credits, thereby resulting in undue hardship and financial losses. The learned Senior Counsel contends that the petitioners have made sincere efforts to comply with the statutory requirements but have been thwarted by systemic issues beyond their control. Furthermore, it is asserted that the refusal to extend the filing deadline or allow manual submission of the TRAN-I form violates the principles of equity and justice, as it disproportionately penalizes the petitioners for circumstances attributable to the deficiencies in the GSTN portal. The counsel also draws attention to the fact that various High Courts have taken a pragmatic approach in similar cases, recognizing the imperative of safeguarding the substantive rights of the taxpayers while ensuring compliance with the procedural mandates of the CGST Act. The petitioners implore this Court to adopt a similar stance, granting them the relief sought and thereby enabling them to avail the transitional credit that they are rightfully entitled to under the GST law. The petitions underscore that the intent of the legislature behind introducing the GST regime was to create a seamless and unified tax structure, which necessitates a harmonious interpretation and application of the transitional provisions to avoid any unjust deprivation of tax credits. In conclusion, the learned Senior Counsel for the petitioners urges the Court to issue a writ of mandamus or any other appropriate writ, order, or direction, directing the respondents to permit the petitioners to file or revise the TRAN-I form either electronically or manually within a reasonable period, extending the time limit prescribed under Rule 117, and to consider their claims for transitional credit on merits, without being constrained by the technical and procedural impediments that have hitherto obstructed their efforts to comply with the statutory requirements.

The learned High Court Government Pleader appearing for the revenue submits that in terms of the circular dated 03.04.2018 issued by the Government of India, an Input Tax Grievance Redressal Mechanism has been set up whereby nodal officers have been appointed to redress the grievances of the registered dealers in filing the TRAN-1/TRAN-2 forms. This mechanism aims to address technical difficulties faced by taxpayers in the transitional phase under the Goods and Services Tax (GST) regime. By virtue of Rule 117(1A), which was inserted with effect from 10.09.2018 vide Notification No.48/2018, the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration in TRAN-1 by a further period on account of technical difficulties on the common portal. This provision is designed to offer flexibility in cases where taxpayers encounter issues beyond their control when attempting to file the necessary forms. Additionally, the pleader points out that a revised TRAN-1 form must be filed on account of any error committed by the registered persons under Rule 12(1A) of the Rules, which contemplates the revision of the declaration in Form GST TRAN-1. This rule allows taxpayers to correct mistakes made during the initial filing, ensuring that they can accurately report and claim their tax credits. However, the pleader argues that no reliance can be placed on Rule 117(1A) to permit the petitioners to file or revise the TRAN-1/TRAN-2 forms beyond the statutory period prescribed. Allowing such revisions or filings beyond the statutory period would, according to the pleader, cause violence to the language employed in the statute, essentially contravening the intended legislative framework. The pleader emphasizes that the statutory period for filing these forms is explicitly defined in the law, and extending this period without adhering to the specific provisions and recommendations would undermine the legislative intent and the structured process established by the GST law. The pleader also notes that the circular and subsequent notifications have provided ample opportunities and mechanisms for taxpayers to address and rectify their filing issues within the prescribed timelines. The establishment of the Input Tax Grievance Redressal Mechanism and the provision for extending the filing date under specific conditions reflect a balanced approach by the authorities to accommodate genuine difficulties faced by taxpayers while maintaining the integrity and timelines of the tax system. Therefore, the pleader contends that allowing the petitioners to file or revise the TRAN-1/TRAN-2 forms beyond the statutory deadline without adhering to the specified procedural framework would not only violate the statutory language but also disrupt the orderly implementation of the GST regime. This argument underscores the importance of adhering to the legislative provisions to ensure a consistent and predictable tax system that upholds the rule of law and maintains the balance between accommodating taxpayer difficulties and enforcing compliance with statutory requirements.

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