2025(03)LCX0376

Union of India

Versus

Jagdalpur Motors

WA No. 56 of 2023 decided on 26-03-2025

HIGH COURT OF CHHATTISGARH AT BILASPUR

WA No. 56 of 2023

{Arising out of order dated 28-11-2022 passed by the
learned Single Judge in W.P.(T)No.252/2022}

Order reserved on: 24-3-2025

Order delivered on: 26-3-2025

1.Union of India Through Secretary, Department of
Revenue, Ministry of Finance Department of
Revenue, Room No.46, North Block, New Delhi110001.

2.GST Council Through Secretary, GST Secretariat, V-
Floor, Tower LI, Jeevan Bharti Building, Janpath
Road, Connaught Place, New Delhi.

3.Principal Commissioner Central Goods and Service
Tax, Central Excise Building, Tikrapara, Dhamtari
Road, Raipur (Chhattisgarh).

4.Goods and Service Tax Network Through its CEO,
Worldmark 1, Aerocity, Indira Gandhi International
Airport, New Delhi- 110037, India.
                                                        (Respondents No.1, 2, 3 & 5)
                                                                            ... Appellants

versus

1.M/s Jagdalpur Motors Through Director, Shri Niraj
Sharma, Address- NH-16, Geedam Road, Pandripani,
Jagdalpur, District Bastar (Chhattisgarh)
                                                                        (Petitioner)

2.Commissioner State Goods and Service Tax, GST
Bhawan, Atal Nagar, Raipur, Chhattisgarh.
                                                            (Respondent No.4)
                                                                ... Respondents

Division Bench: -
Hon'ble Shri Sanjay K. Agrawal and
Hon'ble Shri Sanjay Kumar Jaiswal, JJ.

CAV Order

SANJAY K. AGRAWAL, J.

“12. … There can be no doubt that the authorities functioning under the Act must, as are in duty bound, protect the interest of the Revenue by levying and collecting the duty in accordance with law – no less and also no more. It is no part of their duty to deprive an assessee of the benefit available to him in law with a view to augment the quantum of duty for the benefit of the Revenue. They must act reasonably and fairly.”

1. The aforesaid statement of law rendered by their Lordships of the Supreme Court in the matter of Unichem Laboratories Ltd. v. Collector of Central Excise, Bombay squarely applies to the facts of the present case, as in this case also, the writ petitioner was denied the benefit of filing the revised FORM GST TRAN-1 unfairly.

2. Invoking the writ appellate jurisdiction of this Court under Section 2 (1) of the Chhattisgarh High Court (Appeal to Division Bench) Act, 2006, the Union of India / appellants herein / respondents No. 1, 2, 3 & 5 of the writ petition have preferred this writ appeal calling in question legality, validity and correctness of judgment & order dated 28-11-2022 passed by the writ court in W.P.(T) No. 252/2022, by which the learned Single Judge has directed respondents No. 1, 2 & 5 therein to open the portal so far as the writ petitioner is concerned for once and further directed to ensure that proper steps are taken on or before 30-11-2022 to submit the revised FORM GST TRAN-1.

    (For the sake of convenience, parties would be referred as per their status and ranking shown in the writ petition before the writ court.)

QUESTION INVOLVED

3. The short question involved in this writ appeal is, whether the learned Single Judge is justified in directing respondents No. 1, 2 & 5 therein to open the GST portal enabling the writ petitioner to submit the revised FORM GST TRAN-1 in view of Rule 120A of the Central Goods and Services Tax Rules, 2017 (for short, ‘the Central GST Rules’)?

BRIEF RELEVANT FACTS

4. The writ petitioner / respondent No. 1 herein is engaged in the business of sale of motor vehicles & spare parts thereof and is the authorised dealer of TATA Motor Vehicles and purchases are made solely from TATA Motors under the dealership agreement and was a registered dealer under the erstwhile Central VAT (Value Added Tax) regime. As on 30-6-2017, the writ petitioner firm held goods amounting to Rs. 2,85,71,513/- in its stock on which CENVAT of Rs. 48,86,912/- was already paid and as such, according to the writ petitioner, CENVAT credit of the said amount was available to the writ petitioner firm. With effect from 1-7-2017, the Central Goods and Services Tax Act, 2017 (for short, ‘the Central GST Act’) came into force and Goods and Services Tax was implemented across the country and as per the scheme of the GST (whereby all different taxes were merged), all the entities who were possessing CENVAT credit were eligible for transitional credit in the GST regime in accordance with Section 140 of the Central GST Act upon making a declaration in this regard in FORM GST TRAN-1. As per Rule 117 of the Central GST Rules, the time limit for filing of such declaration was 90 days from the appointed day i.e. till 30-9-2017. However, from July, 2017 to September, 2017, due to technical glitches, many registered assessees were unable to file FORM GST TRAN-1 and the writ petitioner was one such assessee who was unable to file FORM GST TRAN-1 due to technical glitches. In the meanwhile, on 15-9-2017, Rule 120A was inserted in the Central GST Rules giving opportunity to the assessee to revise the TRAN-1 Form once. Ultimately, on 22-7-2022, their Lordships of the Supreme Court in the matter of Union of India and another v. Filco Trade Centre Private Limited and another  issued directions to the GST authorities to open the common portal of Goods and Service Tax Network (GSTN) for filing concerned forms for availing transitional credit through TRAN-1 and TRAN-2 for a period of two months i.e. with effect from 1-9-2022 to 31-10-2022 and enabled the registered assessee to file relevant forms or already revised forms irrespective of the fact that the tax payer has filed writ petition or not and further directed the GST authorities to ensure that there is no technical glitch during the said period and that period was ultimately extended on 2-9-2022 for effectively making the last date of filing of return as 30-11-2022 by the Supreme Court by its order dated 2-9-2022. Consequently, on 9-9-2022 vide Annexure P-3, Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, also issued guidelines for filing/revising TRAN-1/ TRAN-2 in terms of orders dated 22-7-2022 & 2-9-2022 of the Supreme Court.

5. It is the case of the writ petitioner / respondent No. 1 herein that the Tax Consultant engaged by it while opening and making entries in TRAN-1 portal, qua the writ petitioner, instead of entering eligible CENVAT credit amount has mistakenly entered NIL in Form TRAN-1 and pressed the submit button upon which immediately the Form got freezed and there was no option to edit the uploaded Form for which the writ petitioner has also filed affidavit of the Tax Consultant vide Annexure P-6 along with the writ petition and since there was no option to rectify/edit the uploaded Form, the writ petitioner filed representation on 27-10-2022 before the authorities to reset or open the TRAN-1 portal particularly in view of the fact that the last date of submission/filing of TRAN-1 Form was 30-11-2022, which the GST authorities did not address, leading to filing of writ petition by the writ petitioner on 11-11-2022 in which time was granted by the learned Single Judge to the learned counsel appearing for the Revenue to seek instructions and ultimately, reply was filed by the Principal Commissioner, Central Goods & Services Tax & Central Excise, Raipur in the writ petition wherein paragraphs 4.6 & 4.6.1 of the circular dated 9-9-2022 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, have been reiterated stating that since the writ petitioner has clicked the “submit” button without filling the data / figures in TRAN-1 Form, the GST Department cannot be faulted in this case as enough opportunity has been provided by the Government of India in light of the decision of the Supreme Court, therefore, the writ petitioner is not entitled for any relief and the writ petition deserves to be dismissed.

FINDING OF THE LEARNED SINGLE JUDGE

6. The learned Single Judge allowed the writ petition in light of the provision contained in Rule 120A of the Central GST Rules and in light of the order of the Supreme Court in Filco Trade Centre Private Limited (supra) against which this writ appeal has been preferred by the Union of India primarily and mainly on the ground that circular dated 9-9-2022 is pursuant to the direction of the Supreme Court in Filco Trade Centre Private Limited (supra) and no further opportunity to again file or revise the form either during the period or subsequently will be available to the writ petitioner, as such, the order impugned deserves to be set aside.

SUBMISSIONS OF PARTIES

7. Mr. Ramakant Mishra, learned Deputy Solicitor General of India appearing for the appellants / Union of India, would submit that in view of circular dated 9-9-2022 wherein it has clearly been emphasized that before clicking submit button one must ensure the correctness of figures as no editing option will be available once the submit button is clicked, the writ petitioner should have gone through the said circular and should have been very cautious before filing/submitting the TRAN-1 Form, but they took it very casually and submitted the Form very carelessly without any figure in it, and in that case, the approach of the assessee before this Court is not maintainable and if the portal is made open for each one like this, it will be an endless and never ending process and as such, the order of the learned Single Judge deserves to be set-aside and the writ appeal deserves to be allowed.

8. Mr. Hari Agrawal, learned counsel appearing for the registered assessee / writ petitioner / respondent No. 1 herein, would submit that the registered assessee’s right of accumulated CENVAT credit, which is a constitutional right under Article 300A of the Constitution of India, cannot be taken away merely by way of a circular dated 9-9-2022 contrary to the direction made by their Lordships of the Supreme Court in Filco Trade Centre Private Limited (supra) and as such, the writ appeal deserves to be dismissed.

9. Mr. Arvind Dubey, learned Government Advocate appearing for the State / respondent No. 2 herein, would oppose the instant writ appeal and support the impugned order passed by the learned Single Judge.

10. We have heard learned counsel for the parties and considered their rival submissions made hereinabove and also went through the material available on record with utmost circumspection.

DISCUSSION AND ANALYSIS

11. A registered assessee who was eligible for a credit of tax paid under pre-GST regime was entitled to claim credit of input taxes as per the provisions contained in Section 140 of the Central GST Act. GST TRAN-1 is the transition form to be filed for taxpayers who were registered under the pre-GST regime to avail the accumulated input tax, remaining in their account on 30-6-2017 i.e. the day preceding the appointed day. The said form is to be filed by every person having input tax credit on the closing stock and who have migrated to GST regime.

12. It is the case of the writ petitioner / respondent No. 1 herein that the Tax Consultant engaged by it while opening and making entries in TRAN-1 portal, qua the writ petitioner, instead of entering eligible CENVAT credit amount, mistakenly entered NIL in the Form TRAN-1 and pressed the submit button, upon which, immediately, the Form got freezed and there was no option to edit the uploaded form, which is also supported by the affidavit of Tax Consultant Mr. Rishikesh Sharma filed along with the writ petition vide Annexure P-6 against which the writ petitioner made representation to the Principal Commissioner, Central GST & Central Excise, but to no avail.

13. Now, the question would be, whether on account of such technical error / advertent error, can the registered assessee be denied the transitional credit?

14. As noticed herein-above, the Supreme Court in Filco Trade Centre Private Limited (supra), considering the technical glitches suffered by the registered assessees, granted two months time from 1-9-2022 to 31-10-2022 to file transitional credit through TRAN-1 and TRAN-2 and extended the same up to 30-11-2022 by order dated 2-9-2022. The directions were as under:-

“1.1. Goods and Service Tax Network (“GSTN”) is directed to open common portal for filing forms concerned for availing transitional credit through TRAN-1 and TRAN-2 for two months i.e. w.e.f. 1-9-2022 to 31-10-2022.

1.2. Considering the judgments of the High Courts on the then prevailing peculiar circumstances, any aggrieved registered assessee is directed to file the relevant form or revise the already filed form irrespective of whether the taxpayer has filed writ petition before the High Court or whether the case of the taxpayer has been decided by Information Technology Grievance Redressal Committee (“ITGRC”).

1.3. GSTN has to ensure that there are no technical glitch during the said time.

1.4. The officers concerned are given 90 days thereafter to verify the veracity of the claim/transitional credit and pass appropriate orders thereon on merits after granting appropriate reasonable opportunity to the parties concerned.

1.5. Thereafter, the allowed transitional credit is to be reflected in the electronic credit ledger.

1.6. If required GST Council may also issue appropriate guidelines to the field formations in scrutinising the claims.”

15. The writ petitioner approached the writ court prior to the period indicated by the order of the Supreme Court i.e. 30-11-2022 by filing writ petition on 11-11-2022 and upon pleadings having been completed, the learned Single Judge considered the writ petition on 28-11-2022 and passed following order:-

“14. In the instant case the circular dated 09.09.2022 is primarily a clarification instructions and the said clarificatory instructions cannot have an overriding effect over the Act or the Rules. When Rule 120A provides for revising of the declaration in form GST Tran-1 once, only because the portal has been opened as a one time measure by itself cannot be construed that the Rule 120A cannot be made applicable when the period for submission of Form Tran-1 is still open in terms of the order of the Supreme Court even as on date. The Supreme Court also has nowhere held that the applicability of Rule 120A would not be available to those persons who are to submit their Form Tran-1 and Tran-2 in terms of its order.

15. This court therefore is of the opinion that taking into consideration the Rule 120A, it is ordered that the respondents No. 1 & 2 may instruct the respondent No.5 to open the portal so far as the petitioner is concerned for once in terms of Rule 120A permitting the petitioner to revise the declaration and thereafter permit him to submit the same and complete the filing.

16. The respondents No. 1,2 and 5 are further directed to ensure that all necessary steps are taken as far as possible before the time limit provided by the Supreme Court i.e. by 30.11.2022 if not at the earliest. The petitioner also should take all necessary steps to submit the same within the said time period. It is made clear that there cannot be any further permission for revision granted to the petitioner.

17. The respondents are further directed to inform the authorities concerned in this regard telephonically.”

16. The Supreme Court in the matter of Collector of Central Excise, Pune and others v. Dai Ichi Karkaria Ltd. and others held that credit obtained by the manufacturer for the excise duty paid on raw material to be used by him in the production of an excisable product is indefeasible and observed as under:-

“18. It is clear from these rules, as we read them, that a manufacturer obtains credit for the excise duty paid on raw material to be used by him in the production of an excisable product immediately it makes the requisite declaration and obtains an acknowledgment thereof. It is entitled to use the credit at any time thereafter when making payment of excise duty on the excisable product. There is no provision in the rules which provides for a reversal of the credit by the Excise Authorities except where it has been illegally or irregularly taken, in which event it stands cancelled or, if utilised, has to be paid for. We are here really concerned with credit that has been validly taken, and its benefit is available to the manufacturer without any limitation in time or otherwise unless the manufacturer itself chooses not to use the raw material in its excisable product. The credit is, therefore, indefeasible. ...”

17. At this stage, circular dated 9-9-2022 issued by Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs, GST Policy Wing, may be noticed herein upon which great emphasis has been laid by the learned Deputy Solicitor General of India during the course of submission. Paragraphs 4.6.1 & 4.6.2 of the circular state as under:-

“4.6.1 In this regard, it is clarified that the applicant can edit the details in FORM TRAN-1/TRAN-2 on the common portal only before clicking the “Submit” button on the portal. The applicant is allowed to modify/edit, add or delete any record in any of the table of the said forms before clicking the ‘Submit’ button. Once “Submit” button is clicked, the form gets frozen, and no further editing of details is allowed. This frozen form would then be required to be filed on the portal using “File” button, with Digital signature certificate (DSC) or an EVC. The applicant shall, therefore, ensure the correctness of all the details in FORM TRAN-1/TRAN-2 before clicking the “Submit” button. GSTN will issue a detailed advisory in this regard and the applicant may keep the same in consideration while filing the said forms on the portal.

4.6.2 It is further clarified that pursuant to the order of the Hon’ble Apex Court, once the applicant files TRAN-1/ TRAN-2 or revises the said forms filed earlier on the common portal, no further opportunity to again file or revise TRAN-1/ TRAN-2, either during this period or subsequently, will be available to him.”

18. Circular dated 9-9-2022 has been issued in exercise of power conferred under Section 168 of the Central GST Act. At this stage, Rule 120A of the Central GST Rules may noticed herein profitably which provides for Revision of declaration in FORM GST TRAN-1. It states that every registered person who has submitted a declaration electronically in FORM GST TRAN-1 within the time period specified in rule 117, rule 118, rule 119 and rule 120 may revise such declaration once and submit the revised declaration in FORM GST TRAN-1 electronically on the common portal within the time period specified in the said rules or such further period as may be extended by the Commissioner in this behalf. The expression “such further period as may be extended by the Commissioner in this behalf” is quite significant, as the power given by way of Rule 120A of the Central GST Rules cannot be taken by issuance of circular dated 9-9-2022. As held in Dai Ichi Karkaria Ltd.’s case (supra), validity for such credit is indefeasible.

19. The High Court of Gujarat in the matter of Siddharth Enterprises v. Nodal Officer held that Cenvat credit earned under the erstwhile Central excise law is the property of the writ applicants and it cannot be appropriated for merely failing to file a declaration in the absence of law in this respect, and it has been observed as under:

“42. Article 300A provides that no person shall be deprived of property saved by authority of law. While right to the property is no longer a fundamental right but it is still a constitutional right. Cenvat credit earned under the erstwhile Central excise law is the property of the writ applicants and it cannot be appropriated for merely failing to file a declaration in the absence of law in this respect. It could have been appropriated by the Government by providing for the same in the CGST Act but it cannot be taken away by virtue of merely framing Rules in this regard.”

20. Coming to the facts of the present case, although the writ petitioner committed blunder in filing Form TRAN-1, but as per the writ petitioner, huge sum of money was credited in his account and same was found lying unutilized in the last return filed by it for the month of June, 2017. As held by the Supreme Court in Unichem Laboratories Ltd. (supra), it is not the duty of the Revenue to deprive an assessee of the benefit available to him in law and for which he was otherwise eligible and is legitimately available to him and the authorities functioning under the Act are required to act reasonably and fairly. The circular issued under Section 168A of the Central GST Act would not come in way of the assessee to revise its Form TRAN-1 and in that view of the matter, the learned Single Judge is absolutely justified in directing respondents No. 1, 2 & 5 therein to facilitate revising of Form GST TRAN-1 to the writ petitioner. We do not find any good ground to entertain the instant writ appeal.

21. As a fallout and consequence of the aforesaid discussion, we do not find any merit in this writ appeal invoking our appellate jurisdiction to interdict the order passed by the learned Single Judge and accordingly, the instant writ appeal is dismissed leaving the parties to bear their own cost(s).

22. In view of above, respondents No.3 and 4 are directed to permit the writ petitioner to revise Form GST TRAN-1, if not already permitted, so as to enable it to claim transitional credit of the eligible duties in respect of the inputs.