Facts of the Case

The petitioner, M/S Tara Steel Centre Rampur, challenged an order dated 06.02.2023 of the Deputy Commissioner, State Tax (GST), U.P., refusing to entertain its revised Form Tran-1/Tran-2 application, filed offline on 30.11.2022 — the last date specified pursuant to liberty granted by the Supreme Court for availing transitional input tax credit — on the ground that it was received on the online system only on 01.12.2022. The petitioner's case was that the online portal was not functional on 30.11.2022, compelling it to submit the form offline on that date itself.

Issues Involved

  1. Whether the department could deny the benefit of a transitional credit scheme, whose deadline the assessee had met by submitting an offline application, solely because its online system was non-functional and the offline submission could not be uploaded on time.

Petitioner's Arguments

  • The petitioner argued that it had submitted the offline form in the concerned office on 30.11.2022 itself, the last date permitted, because the online system was not functional, and that it should not be penalised for a technical failure not of its making.

Respondent's Arguments

  • The State counsel, after obtaining instructions from the concerned Deputy Commissioner, submitted that the petitioner was required to upload the form online, and since this was not done, the offline submission could not be entertained, as the process was online with no discretion for the officer to accept offline forms.

Court Order / Findings

  • The Division Bench found that the State did not dispute the petitioner's assertion that the online system had a technical glitch on 30.11.2022, nor that the offline application was moved on the last permitted date.
  • The Court held that procedures cannot be given primacy over the substantive rights of the parties, and that the State, having provided a time-bound facility for availing transitional credit, could not deny the benefit of the scheme merely because the application was not made online when the online system itself was not functional that day.
  • The respondents were directed to entertain the petitioner's offline application, submitted within time, and process the claim accordingly, with the petitioner undertaking to extend necessary cooperation.

Important Clarification

  • Where a taxpayer demonstrates that it submitted a transitional-credit application (or any statutorily time-bound GST application) within the deadline through an offline mode because the online portal was genuinely non-functional, and the State does not dispute this technical failure, the substantive right to avail the scheme prevails over a purely procedural online-filing requirement.
  • Courts have directed the authorities to make necessary procedural arrangements to accommodate such portal failures rather than let a taxpayer's substantive statutory right be defeated by a technical glitch outside its control.

Sections Involved

  • Section 140 of the CGST/UP GST Act, 2017 - governs transitional input tax credit, the subject of the revised TRAN-1/TRAN-2 forms.
  • Form GST TRAN-1/TRAN-2 under the CGST Rules, 2017 - the prescribed forms for claiming transitional credit.

Decision – In Favour of

The writ petition was allowed in favour of the Assessee; the department was directed to entertain and process the offline TRAN-1/TRAN-2 application submitted within the permitted window.

Case Details

High Court of Judicature at Allahabad, Writ Tax No. 570 of 2023, Neutral Citation 2023:AHC:107534-DB; Coram: Hon'ble Ashwani Kumar Mishra, J. and Hon'ble Vinod Diwakar, J.; decided on 17 May 2023.

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