The Gujarat High Court held that the department cannot raise their hands in despair saying that it is not possible to correct or take care of the technical glitches.
The Petitioner M/S Bodal Chemicals Ltd. is a public limited company inter alia engaged in the business of manufacture of chemical products like H-Acid, Vinyl Sulphone, Dyes etc. The applicant was registered as the Input Service Distributor (ISD) under the Cenvat Credit Rules read with the Central Excise Rules. Having regard to the same, the applicant was availing the credit of various input transactions as the ISD for distributing proportionate credit to each of the business premises in accordance with Rule 7 of the Cenvat Credit Rules.
The Central Goods and Services Act, 2017 along with the CGST Rules came into force with effect from 01.07.2017. The un-utilized credit lying in the credit register of the assesses was allowed to be transferred and carried forward to the electronic credit ledger under the CGST Act by filing a return in the Form STR – 3 detailing therein the un-utilized credit and other relevant information. A declaration in Form GST TRAN – 1 was also required to be filed by the registered person under the CGST Act by 27.12.2017. Accordingly in November, 2017, the applicant filed GST TRAN – 1 wherein the balance of the Cenvat Credit lying with the applicant on 30.06.2017 including the un-utilized balance of ISD Cenvat Credit was Rs.20,52,989/-. The writ applicant filed a return in Form CGST – 06 with details of balance of Cenvat Credit lying on 30.06.2017 for transferring such credit to the GST regime. However, on account of an error in the GST network, the Cenvat Credit balance in the return was shown at Rs.2,96,528/-. The ISD balance of Rs.20,52,989/- was not added or included in the balance of the ISD credit in the return.
The writ applicant has been requesting the Nodal Officer and also the jurisdictional Assistant Commissioner of GST for correcting the balance in the ISD return by including the balance credit of Rs.20,52,989/-. Over a period of time, many representations have been filed by the writ applicant as regards the aforesaid but of no avail. Hence a WRIT Petition was filed before the Hon’ble High Court of Gujarat to allow the applicant to furnish manually the GSTR – 6 return with details of the ISD credit of Rs.20,52,989/- and also permit distribution of such credit to the constituents of the writ applicant.
While allowing the Writ Petition, the division bench comprising of Justice J.B Pardiwala and Justice Nisha M. Thakore held that “the respondents cannot raise their hands in despair saying that it is not possible to correct or take care of the technical glitches. The writ applicant herein has been running from pillar to post requesting the respondents to provide a solution and take care of the technical error and glitch that occurred as regards furnishing the GSTR – 6 return for recording and distributing the ISD credit”. Further held by the court that “the credit is a tax paid by the registered person on input transactions and therefore, the credit of such tax already paid to the credit of the Central Government is a vested right of the person. Such vested right cannot be defeated on account of any irregularity in the system evolved by the Government”.
M/S BODAL CHEMICALS LTD. vs UNION OF INDIA
CITATION: 2022 TAXSCAN (HC) 146
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