The Karnataka High Court has once again directed GST authorities to permit a taxpayer to file a revised TRAN-2 return beyond the statutory time limit, applying the relief already granted to the same petitioner in an earlier, connected proceeding.

Facts of the Case

The petitioner, M/s Akshaya Agro Sales Pvt. Ltd., a trader of agricultural seeds registered under GST vide GSTIN 29AAGCA2447M1ZU, was also registered with the central excise authority and sought to carry forward input credit on excise duty paid on unsold inventory into the GST regime under Section 140 of the CGST Act, 2017. The petitioner had filed its TRAN-1 return on 20.11.2017 but was unable to file the revised TRAN-2 return due to a technical glitch on the GST portal. The petitioner filed representations before the authorities (Annexures B, B1 and B2), which were not acted upon, and thereafter approached the High Court under Articles 226 and 227 of the Constitution seeking a direction to permit filing of the revised TRAN-1 and TRAN-2 returns, electronically or manually, beyond the time limit prescribed under Rule 117 of the CGST Rules read with Section 140.

Issues Involved

  1. Whether the petitioner, having been unable to file the TRAN-2 return within the prescribed time due to a technical glitch, is entitled to a direction permitting filing of the revised return beyond the Rule 117 time limit.

Petitioner's Arguments

  • The petitioner was registered with the central excise authority and was entitled to carry forward input credit on excise duty on unsold inventory into the GST regime.
  • Although TRAN-1 was filed on 20.11.2017, the petitioner could not file the revised TRAN-2 return on account of a technical glitch on the common portal.
  • Representations seeking permission to file the revised return were made to the authorities but remained unaddressed.

Respondent's Arguments

  • Learned counsel for the Union of India and the State of Karnataka jointly submitted that the facts of the present case are identical to those already considered by the Court in W.P.No.4241/2021 and connected matters, which was affirmed by the Division Bench in W.A.No.461/2020 and W.A.No.18/2021.
  • The respondents accepted that, in view of the identical factual matrix, the matter could be disposed of on the same terms as the earlier decision.

Court Order / Findings

  • The Court noted that the facts of the present case were identical to those already dealt with in W.P.No.4241/2021 and connected matters, a decision affirmed by the Division Bench.
  • Applying the same reasoning, the Court allowed the writ petition and directed the respondents to permit the petitioner to file the revised TRAN-2 return, either electronically or manually, within 30 days from release of the order.

Important Clarification

  • Where a taxpayer's inability to file TRAN-1/TRAN-2 returns within the Rule 117 time limit is attributable to a technical glitch on the GST portal, courts have consistently permitted manual or electronic filing of the revised return beyond the prescribed period, treating the time limit as directory rather than mandatory in such circumstances.
  • Coordinate Bench precedent on identical facts is sufficient for disposal of connected writ petitions without requiring the petitioner to re-establish the underlying technical-glitch grievance afresh.

Sections Involved

  • Section 140, CGST Act, 2017 — transitional arrangements for carrying forward input tax credit into the GST regime.
  • Rule 117, CGST Rules, 2017 — time limit for filing the TRAN-1/TRAN-2 declaration for transitional credit.
  • Articles 226 and 227, Constitution of India — writ jurisdiction of the High Court invoked for the relief sought.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee. The Karnataka High Court directed the GST authorities to permit the petitioner to file the revised TRAN-2 return, electronically or manually, within 30 days of the order.

Case Details

  • Court: High Court of Karnataka at Bengaluru
  • Case No.: Writ Petition No.3754/2022 (T-RES)
  • Coram: Hon'ble Mr. Justice S. Sunil Dutt Yadav
  • Date of Order: 18 February 2022
  • Parties: M/s Akshaya Agro Sales Pvt. Ltd. vs Union of India & Ors.

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