The Madras High Court, while hearing a petition seeking re-opening of GST TRAN-1, has expressed a view that the input tax credit, is a substantive right, cannot be denied to the assessees on the ground of procedural grounds. The bench also clarified that the due dates prescribed under the GST laws are mere procedural grounds.
According to the petitioners, they could not complete the submission of GST TRAN-1 form due to technical glitches in the GST portal before the due date ie. before 27.12.2017. they also tried the grievance redressal portal, but, all the efforts made by the petitioner have ended in vain. The manual returns filed by them were also rejected by the authorities by stating that the returns can be filed online only.
Aggrieved by the action of the authorities, the petitioners approached the High Court for relief.
While disposing of the petition, Justice Nisha Banu noticed that the petitioners have made genuine attempts to file the return.
“GST is a new progressive levy. One of the progressive ideals of GST is to avoid cascading taxes. GST Laws contemplate the seamless flow of tax credits on all eligible inputs. The input tax credits in TRAN 1 are the credits legitimately accrued in the GST transition. The due date contemplated under the laws to claim the transitional credit is procedural in nature. In view of the GST regime and the IT platform being new, it may not be justifiable to expect the users to back up digital evidence. Even under the old taxation laws, it is a settled legal position that substantive input credits cannot be denied or altered on account of procedural grounds,” the Court said.
The Court, hence, directed the Government either to open the portal, so as to enable the petitioner to file the TRAN 1 electronically for claiming the transitional credit or accept the manually filed TRAN 1, dated 31.01.2018, and allow the input credits, after processing the same, if it is otherwise eligible in law.
Subscribe Taxscan Premium to view the Judgment
