Input Tax Credits can’t be denied on Procedural Grounds: Himachal Pradesh HC directs Govt to allow Filing of TRAN-1 [Read Judgment]

The Himachal Pradesh High Court has held that Substantive Input Tax credits cannot be denied on procedural grounds and the court directs to allow the petitioner to file TRAN-1 electronically or manually.

The division bench comprising of Justice Tarlok Singh Chauhan and Justice Chander Bhusan Barowalia on a writ petition filed by M/s Jay Bee Industries observed that the GST system has been judicially recognized but it is still in a “trial and error phase” dealers facing genuine difficulties in filing returns, claiming input tax credits through the GST portal, Thus assessee can file TRAN-1 either electronically or manually statutory form(s).

The petitioner is engaged in the manufacture and sale/supply of Electrical Transformers/parts thereof etc. subjected to appropriate levies of goods and service tax on the supplies made by it. The petitioner is also entitled to the credit of input tax on the inputs as well as capital goods and input services. The input credit is also admissible in respect of the duty/tax paid on the inputs lying as such and those contained in the semi-finished goods and finished goods lying in stocks as on 30.06.2017 for being carried forward and utilized under the GST Act.

The petitioner tried to submit the aforesaid TRAN-1 Form, but due to system problem/glitches, could not file it. The petitioner thereafter approached its jurisdictional authorities and also submitted a letter requesting for the solution to the problem. Again, when the petitioner tried to submit the aforesaid TRAN-1 Form, there was a message appearing on the portal reflecting that the filing of declaration in TRAN-1 is not available now as the due date is over.

While allowing the writ petition the Court observed that a majority of the High Courts in the Country like Kerala, Madras, Bombay, Gujarat, Karnataka, Telangana, Delhi, Chhatisgarh, Rajasthan, and Gauhati, have taken an identical view and held that either to open the portal so as enable the petitioner to file the TRAN-1 electronically for claiming the transitional credit or accept the manually filed TRAN-1 and to allow the input credit claimed after processing the same.