The Kerala High Court has held that the substantial rights available to petitioners under the GST Act cannot be deprived solely on account of a technical lapse that was occasioned at the instance of the GST Council.
The petitioners in both Writ Petitions were assessing under the Kerala Value Added Tax (KVAT) Act, 2003, who migrated to the GST regime pursuant to the enactment of the CGST/SGST Act, 2017. The petitioners, consequent to their migration to the GST regime, were entitled to carry forward the tax paid on the purchase of goods during the VAT regime to the GST regime and to avail credit under the latter regime.
The transition provisions, which govern the transfer of credit under the CGST/SGST Act and Rules are Sections 139 to 143 of the Act and Rule 117 of the SGST Rules. As part of the procedure for the transfer of credit, the petitioners had to file a declaration in Form GST TRAN-1 on or before 27.12.2017 for the purposes of successfully migrating the credit to the GST regime.
In both these Writ Petitions, the grievance of the petitioners is essential that they had come across a press release by the GST Council, which indicated that the last date for uploading the details in the GST portal for the purposes of carrying forward the accumulated credit from the erstwhile regime was extended up to 31.12.2017.
In these Writ petitions, the communications issued to them by the respondents denying them the facility of transfer of accrued credit are impugned, inter alia, on the contention that the substantial rights available to them under the GST Act cannot be deprived solely on account of a technical lapse that was occasioned at the instance of the respondents.
The single-judge bench of Justice A.K Jayashankaran Nambiar pronounced the judgment based on writ petitions filed by A.F Babu and Naga Distributors.
While relying upon Delhi High Court Judgment in Amon Motors Vs. Union of India and Ors, wherein almost similar circumstances, the Court permitted the petitioners therein to file a Form TRAN-1 electronically on or before a specified date.
While allowing the petitions the Court quashed the impugned communications and directed the respondents to either open the online portal so as to enable the petitioners to file the Form TRAN-1 electronically or to accept the same manually on or before 31.12.2019.
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