Facts of the Case

The petitioner, M/s The Ramaraju Surgical Cotton Mills Limited, was a registered assessee under the Goods and Services Tax law bearing GSTIN 33AAACT4380D1ZX. Until August 2021, it had ten registered additional places of business apart from its principal place of business.

In August 2021, the petitioner added another place of business at Annamaraja Nagar, Sankarankovil Road, Rajapalayam, as its 11th additional place of business. Thereafter, the petitioner purchased capital goods for that place of business and availed Input Tax Credit on such capital goods up to June 2022.

The petitioner subsequently decided to obtain a separate GST registration for the 11th additional place of business. The new Registration Certificate was issued on 21 June 2022, and simultaneously that place was removed from the list of additional places of business under the existing registration.

After obtaining the new registration, the petitioner attempted on 20 July 2022 to file the prescribed GST form for transferring ITC of ₹72,44,300/- to the new registration in proportion to the value of assets. However, the GST portal did not permit filing because the filing option was disabled. The portal displayed a message stating that a declaration for transfer of ITC pursuant to registration under Section 25(2) could be filed within 30 days from the grant of registration to the transferee.

According to the petitioner, the 30-day period had not expired when the filing was attempted. Since the portal prevented filing of the form, the petitioner approached the High Court under Article 226 seeking appropriate directions.

Issues Involved

The principal issues before the Court were:

  1. Whether the petitioner had attempted to file the prescribed form for transfer of ITC within the permissible 30-day period.
  2. Whether denial of filing due to disabling of the option on the GST portal could defeat the petitioner’s claim to transfer ITC of ₹72,44,300/-.
  3. Whether relief should be granted by directing acceptance of FORM GST ITC-02A through reopening of the common portal, physical filing, or permitting transfer through GSTR-3B returns.
  4. Whether the petitioner’s claim was required to be considered in light of the Rajasthan High Court decision in Pacific Industries Limited vs Union of India, reported in (2022) 61 GSTL 592.

Petitioner’s Arguments

The petitioner contended that the separate GST Registration Certificate was issued on 21 June 2022 and that it attempted to file the prescribed form on 20 July 2022.

It was argued that the statutory period of 30 days had not expired on the date of the filing attempt. Nevertheless, the GST portal disabled the filing option and prevented submission of the form.

The petitioner maintained that it had acted within the permissible period and should not be deprived of the transfer of legitimate ITC merely because of the functioning or restriction of the electronic portal.

Accordingly, the petitioner sought a writ of mandamus directing the respondent to:

  • accept FORM GST ITC-02A by opening the common portal; or
  • accept the form physically; or
  • permit transfer of the credit through GSTR-3B returns,

so as to enable transfer of ₹72,44,300/- in terms of Rule 41A of the CGST Rules, 2017.

The petitioner specifically relied upon the decision of the Rajasthan High Court in Pacific Industries Limited vs Union of India, (2022) 61 GSTL 592, where a similar issue had been dealt with.

Respondent’s Arguments

The learned Senior Standing Counsel appearing for the respondent submitted, on instructions, that the petitioner had attempted to file the form on the last day of the 30-day limitation period and, for that reason, the portal had disabled the filing option.

Thus, the respondent’s position was essentially that the portal restriction arose because the filing attempt was made at the end of the prescribed period.

Court Order / Findings

The Madras High Court examined the relevant dates and found that the new Registration Certificate had been issued on 21 June 2022, while the petitioner attempted filing on 20 July 2022.

The Court specifically held that time was still available, because the period of limitation would expire only on the next day. Therefore, the petitioner’s attempt on 20 July 2022 was within the available period.

The Court further found that the petitioner could not file the form within the 30-day period because the portal did not allow the petitioner to upload it.

On this basis, the Court formed the considered opinion that the petitioner was entitled to relief.

However, instead of directly ordering the immediate transfer of ITC, the Court directed the petitioner to submit a fresh petition before the IT Grievance Redressal Committee. The Committee was directed to:

  • consider the petitioner’s claim;
  • examine it in light of the Rajasthan High Court judgment in Pacific Industries Limited vs Union of India, (2022) 61 GSTL 592; and
  • pass appropriate orders within six weeks from the date of receipt of a copy of the High Court’s order.

With these directions, the writ petition was disposed of without costs.

Important Clarification

This judgment is significant because the Court did not accept the proposition that a taxpayer’s substantive claim could simply be defeated when the taxpayer attempted compliance within the available period but the GST portal prevented uploading of the prescribed form.

A crucial factual finding was that:

  • new registration was granted on 21 June 2022;
  • filing was attempted on 20 July 2022; and
  • according to the High Court, the limitation period would expire only the next day.

Therefore, the Court treated the inability to file as a consequence of the portal not permitting upload, rather than as an established delay attributable to the petitioner.

At the same time, it is important to clarify that the High Court did not itself finally sanction or electronically transfer ₹72,44,300/- of ITC. The operative relief was a direction to approach the IT Grievance Redressal Committee, which was required to consider the claim and pass orders within six weeks in light of the cited Rajasthan High Court precedent.

Sections / Provisions Involved

Article 226 of the Constitution of India — The writ petition was filed seeking a writ of mandamus against the tax authority.

Section 25(2) of the CGST Act, 2017 — Referred to in the portal message concerning transfer of ITC pursuant to registration and the prescribed filing period.

Rule 41A of the CGST Rules, 2017 — Central provision governing transfer of unutilised Input Tax Credit where a registered person obtains separate registration for multiple places of business within a State or Union Territory and seeks transfer in the prescribed manner.

FORM GST ITC-02A — The prescribed form relevant to transfer of unutilised ITC in the circumstances contemplated under Rule 41A.

GSTR-3B — Mentioned as one of the alternative modes of relief sought by the petitioner for enabling transfer of the credit.

substantive consideration rather than mechanical rejection solely on account of the portal restriction. In the present case, the Madras High Court found that the petitioner’s attempt was

Link to download the order -https://www.mytaxexpert.co.in/uploads/1783321710_1260compressed.pdf

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