Guru Shoe Components And Company VS Goods and Services Tax Council, New Delhi

The petitioner is a manufacturer of insoles and is currently registered as a dealer under the Puducherry Goods and Services Taxes Act, 2017 (PGST Act). Before this, they were registered under the Puducherry Value Added Tax Act, 2007 (PVAT Act). With the introduction of the PGST Act on July 1, 2017, the petitioner attempted to transition their existing VAT credit to the new GST system. Section 139 of the PGST Act facilitates the migration of existing taxpayers to the new system.

According to the prescribed migration procedure, dealers with a valid Permanent Account Number (PAN) were provided with provisional user IDs and passwords. These credentials were generated by the Goods and Service Tax Network (GSTN), allowing the dealers to migrate their existing credits to the GST portal. This process was crucial for businesses to ensure that their previously accumulated VAT credits could be carried forward and utilized under the new GST regime, maintaining the continuity of their tax credits and compliance status.

The petitioner is a manufacturer of insoles registered under the Puducherry Goods and Services Taxes Act, 2017 (PGST Act), previously registered under the Puducherry Value Added Tax Act, 2007 (PVAT Act). With the implementation of the PGST Act from July 1, 2017, the petitioner attempted to transition existing VAT credits to the GST portal. Section 139 of the PGST Act facilitates the migration of existing taxpayers, requiring them to use a provisional user ID and password generated by the Goods and Service Tax Network (GSTN) for enrollment under the GST scheme.

The petitioner claims that they did not receive the provisional ID from GSTN. Consequently, they used a randomly generated ID to conduct business from July 1, 2017, to August 21, 2017, and earned tax credits. However, since this ID was defective, the petitioner could not utilize the credits and subsequently applied for a new registration, which was granted on August 22, 2017. Despite filing returns and attempting to claim input tax credits for the earlier period, they were unsuccessful.

The petitioner made several requests to the relevant authorities on September 20, 2017, September 23, 2017, September 25, 2017, October 3, 2017, August 28, 2018, and January 28, 2019, seeking the user name and password necessary for completing the migration process and claiming the credits.

The petitioner has now filed a writ petition seeking a mandamus to direct the Commercial Tax Officer (the fifth respondent) to issue a user name and password to complete the migration process, upload returns in GSTR1 and GSTR3, and claim TRAN 1 credit under the old provisional ID for the months of July and August 2017.

The petitioner, a manufacturer of insoles, was initially registered under the Puducherry Value Added Tax Act, 2007 (PVAT Act) and later under the Puducherry Goods and Services Taxes Act, 2017 (PGST Act) with its enactment on 01.07.2017. The petitioner attempted to migrate existing credit from the VAT scheme to the GST portal as per Section 139 of the PGST Act, which provides for the migration of existing taxpayers. This migration required a valid PAN, and provisional user ID and password generated by the Goods and Service Tax Network (GSTN).

However, the petitioner did not receive the provisional ID and used a random, defective ID to conduct business and earn credit from 01.07.2017 to 21.08.2017. The petitioner applied for a new registration, which was granted on 22.08.2017. Subsequent returns filed claimed input tax credit for the earlier period but were unsuccessful. Multiple requests for a username and password were made to the respondents (Commercial Tax Authorities) between September 2017 and January 2019.

The writ petition seeks a mandamus directing the Commercial Tax Officer to issue a username and password to complete the migration process, upload returns in GSTR1 and GSTR3, and claim TRAN 1 credit for July and August 2017. The respondents, Commercial Tax Authorities at Puducherry, admit the petitioner’s factual narration. Mr. J. Kumaran, representing the Commercial Tax Authorities, and Mr. V. Sundareswaran, representing the GSTN, agree that the petitioner should be allowed to access the portal, file the requisite forms, and avail the credit, attributing the issue to a simple human error.

The court records these submissions and directs the appropriate authority to issue the necessary positive recommendations for the migration/transition of credit within four weeks. GSTN, in turn, must permit the petitioner to access the portal and upload the forms within four weeks of receiving the recommendation.

The petitioner also sought permission to deposit tax, penalty, and interest under Section 50 of the PGST Act, but this request was deemed premature as no assessment had been made in the present case.

The petitioner, a manufacturer of insoles, is registered under the Puducherry Goods and Services Taxes Act, 2017 (PGST Act). Previously, they were registered under the Puducherry Value Added Tax Act, 2007 (PVAT Act). With the enactment of the PGST Act from July 1, 2017, the petitioner attempted to transition their existing VAT credit to the GST portal. Section 139 of the PGST Act outlines the migration procedure for existing taxpayers, requiring a provisional user ID and password generated by the Goods and Service Tax Network (GSTN).

However, the petitioner did not receive a provisional ID from GSTN and instead used a randomly generated ID, which was defective. This ID was used to conduct business and earn credit from July 1, 2017, to August 21, 2017. Unable to utilize the credit due to the incorrect ID, the petitioner applied for and received a new registration on August 22, 2017. They filed returns and sought to claim input tax credit for the earlier period but were unsuccessful.

Subsequently, the petitioner made several requests to the Commercial Tax Officer (respondent 5) on various dates for a username and password to complete the migration process. These requests were made on September 20, 2017, September 23, 2017, September 25, 2017, October 3, 2017, August 28, 2018, and January 28, 2019.

The petitioner then filed a writ petition seeking a mandamus directing the Commercial Tax Officer to issue a username and password, complete the migration process, upload returns in GSTR1 and GSTR3, and claim TRAN 1 credit for July and August 2017 using the old provisional ID. The respondents, including the Commercial Tax Authorities at Puducherry, more or less admitted the petitioner’s narrative of events.

Mr. J. Kumaran, the learned Additional Government Pleader for the Commercial Tax Authorities, acknowledged that a human error had occurred and did not object to allowing the petitioner to access the portal and avail the credit earned. Mr. V. Sundareswaran, the learned Panel Counsel for the second respondent, agreed that once a positive recommendation is received from the Puducherry GST Authorities, GSTN will permit the petitioner to access the portal, upload the forms, and avail credit.

The court recorded these submissions and directed the appropriate authority to issue the necessary positive recommendations for migration/transition of credit within four weeks of receiving a copy of the order. The second respondent (R2) was then required to issue the necessary intimation to the petitioner within four weeks of receiving the recommendation, allowing the petitioner to access the portal and upload the forms.

The petitioner also sought permission to deposit tax, penalty, and interest under Section 50 of the PGST Act. The court deemed this request premature, as no assessment had been made. The petitioner was advised to raise this issue during the assessment, at which point it would be considered by the authorities in accordance with the law.

The petitioner in this case is a manufacturer of insoles registered under the Puducherry Goods and Services Tax Act, 2017 (PGST Act), having previously operated under the Puducherry Value Added Tax Act, 2007 (PVAT Act). Following the enactment of the PGST Act from July 1, 2017, the petitioner attempted to transition their existing tax credits from the VAT scheme to the GST regime as per Section 139 of the PGST Act.

Initially, the petitioner did not receive a provisional user ID from the Goods and Services Tax Network (GSTN) as prescribed for migration. Consequently, the petitioner used an ID created with random units, which was later found to be defective. During the period from July 1, 2017, to August 21, 2017, business was conducted using this incorrect ID, resulting in earned tax credits that could not be utilized due to the defectiveness of the ID.

On August 22, 2017, realizing the issue, the petitioner applied for a new registration under GST which was granted. Subsequently, attempts were made through multiple requests to obtain a correct user name and password from the tax authorities, but these were unsuccessful despite several attempts made between September 2017 and January 2019.

As a remedy, the petitioner filed a writ petition seeking a mandamus to direct the Commercial Tax Officer (5th respondent) to issue a valid user name and password. The respondents, namely the Commercial Taxes Authorities, admitted the facts of the case and acknowledged that the issue arose from a human error.

During the proceedings, it was agreed by the learned counsels representing the authorities that once positive recommendations were received from the Puducherry GST Authorities, the petitioner would be permitted by GSTN to access the portal, upload necessary forms (GSTR1 and GSTR3), and avail the credit earned under the old provisional ID from July and August 2017.

The court directed the authorities to issue the required positive recommendations for migration of credits within four weeks and instructed GSTN to allow the petitioner access to the portal for filing forms accordingly.

Regarding the petitioner’s request to deposit tax, penalty, and interest under Section 50 of the PGST Act, the court deemed it premature since no assessment had been conducted yet. It was clarified that such requests could be pursued during assessment, and the authorities would consider them in accordance with the law.

Ultimately, the writ petition was disposed of with no costs imposed, providing relief to the petitioner by facilitating the completion of the migration process and access to accrued tax credits under the correct GST registration.

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