Tran 1 filling allowed when it was not filed due to bona fide reason : HC

Pramji Paul Vazhappilly , Adv. for the Petitioner. P. Vijayakumar, Adv. and P.R. Sreejith for the Respondent.

JUDGMENT

1. As both these writ petitions involve a common issue they are taken up for consideration together and disposed by this common judgment.

2. The petitioners in both these Writ Petitions were assesses under the Kerala Value Added Tax Act, 2003, who migrated to the GST regime pursuant to the enactment of the Central Goods and Service Tax/State Goods and Service Tax (CGST/SGST) Act, 2017. The petitioners, consequent to their migration to the GST regime, were entitled to carry forward the tax paid on purchase of goods during the VAT regime to the GST regime and to avail credit under the latter regime. The transition provisions, which govern the transfer of credit under the CGST/SGST Act and Rules are sections 139 to 143 of the Act and Rule 117 of the SGST Rules. As part of the procedure for the transfer of credit, the petitioners had to file a declaration in Form GST TRAN-1 on or before 27.12.2017 for the purposes of successfully migrating the credit to the GST regime. In both these Writ Petitions, the grievance of the petitioners is essentially that they had come across a press release by the GST Council, which indicated that the last date for uploading the details in the GST portal for the purposes of carrying forward the accumulated credit from the erstwhile regime was extended up to 31.12.2017. Relying on the said press release, the petitioners sought a clarification from the GST Net Work, on finding that the web portal had closed by 27.12.2017, as to when the portal would re-open again for them to upload the necessary details for migration of the credit to the GST regime. The respondents however clarified that inasmuch the petitioners had not made any attempt to log into the system before 27.12.2017 their request for migration of credit could not be accepted. In these Writ petitions, the communications issued to them by the respondents denying them the facility of transfer of accrued credit are impugned, inter alia, on the contention that the substantial rights available to them under the GST Act cannot be deprived solely on account of a technical lapse that was occasioned at the instance of the respondents.

3. Through statements filed on behalf of the respondents, it is stated that the complaints with regard to system error and the alleged inability of assessees to upload the necessary details for carrying forward the credit earned by them under the erstwhile regime to the GST regime on or before 27.12.2017, were considered by the respondents, who have the wherewithal to ascertain whether an assessee had in fact made an attempt to log into the system or not. It is stated that system log maintained by the respondents clearly reveals cases where an assessee attempted to log into the system but failed, and also whether or not the inability of the assessee to upload the necessary details was on account of a system error or otherwise. It is stated that inasmuch as the system logs in the instant case reveal that the petitioners had not made an attempt to log into the system before 27.12.2017, their case would be covered by category B2, in the categorization drawn up by the respondents, which are cases where the system log indicates that the assesees had not made any attempt to log into the system before 27.12.2017.

4. I have heard the learned counsel appearing for the petitioner and the learned Standing Counsel appearing for the respondents.

5. On a consideration of the facts and circumstances of the case and the submissions made across the bar, I find that, while it is a fact that the petitioners did not make an attempt to log into the system before 27.12.2017, the cut-off date prescribed by the respondents for uploading the TRAN-1 Form to the web portal, I find that the petitioners were guided by a press release of the GST Council, which suggested that they could upload the statutory form on any date before 31.12.2017. Placing reliance on the said press release, the petitioners had submitted an E-mail on 30.12.2017, seeking a clarification as to when the web portal would open again so as to upload their respective TRAN-1 Forms. The said E-mail, in my view, suggests that the petitioners would have attempted to upload the TRAN-1 Form had the web portal remained open till 31.12.2017 as indicated in the press release of the GST Council. No doubt, it is now clarified by the learned Standing Counsel for the respondents that the press release itself was a mistaken one, in that there was no decision to extend the time limit till 31.12.2017. I find, however, that the petitioner assesee cannot be deprived of the substantive benefit under the GST Act merely on account of a technical procedure insisted upon by the respondents. This is more so when they had valid reason to assume that the facility to upload the necessary TRAN-1 Form was available till 31.12.2017. I also take note of the judgment of the Delhi High Court in Aman Motors v. Union of India [2019] where in almost similar circumstances, the Court permitted the petitioners therein to file a Form TRAN-1 electronically on or before a specified date. Taking cue from the said judgment, I deem it appropriate to allow these Writ petitions by quashing the impugned communications and directing the respondents to either open the online portal so as to enable the petitioners to file the Form TRAN-1 electronically or to accept the same manually on or before 31.12.2019. While the respondents shall attempt to facilitate the filing of these TRAN-1 Forms electronically by making the necessary arrangements in the web portal, an insistence on manual filing shall be only in circumstances where the electronic filing is not possible. In either event, the respondents are at liberty to verify the genuineness of the claim of the petitioners and the claim shall not be denied only on the ground that the same was not filed before 27.12.2017.

These Writ Petitions are allowed on the above lines.