The Supreme Court has recently dismissed the Special Leave Petition ( SLP ) filed by the Revenue against Standard Chartered Bank regarding the filing of TRAN-01 through another state’s Goods and Services Tax ( GST ) portal amid technical glitches.
The SLP was filed by the revenue challenging the Telangana High Court’s ruling, which upheld the Standard Chartered Bank’s action of filing TRAN-01 via a different state’s GST portal due to portal issues.
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The facts are that the petitioner, Standard Chartered Bank, headquartered in Mumbai, Maharashtra, attempted to file its TRAN-01 return on the Maharashtra GST portal. However, due to technical glitches, the bank was unable to complete the filing. As the bank also had a registered branch in Telangana, it filed the TRAN-01 return on the Telangana GST portal on October 18, 2017. The credit was availed and subsequently transferred to the Maharashtra GST portal on the same day.
Despite this, the Revenue issued a pre-show cause notice on September 3, 2021, alleging that the credit availed through the Telangana GST registration was ineligible and needed to be reversed along with interest and penalties. The petitioner promptly responded on September 9, 2021, clarifying that the total transitional credit of ₹1,41,26,69,646 had been transferred to the Maharashtra GST registration on the same day of filing, with only a differential balance of ₹2,00,000 remaining in Telangana. The bank also provided supporting evidence, including its Electronic Credit Ledger from July 2017 to March 2018.
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However, the Revenue was not satisfied with the explanation and proceeded with an adverse Order-in-Original on October 31, 2023. Challenging this order, the petitioner moved the High Court.
The Telangana High Court, in its judgment, referred to the Supreme Court’s decision in M/s. Godrej Sara Lee Ltd., which emphasized that purely legal disputes should be adjudicated by High Courts instead of being dismissed on the grounds of alternative remedies.
The High Court noted that under Section 140(1) of the GST Act, a registered person is entitled to avail CENVAT credit in their electronic credit ledger, and since the bank’s GST registration and PAN were the same nationwide, there was no legal requirement to restrict the filing to Maharashtra’s portal alone.
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The high court also held that the responsibility of maintaining a functional GST portal lies with the Department, and taxpayers cannot be penalized for system failures. It concluded that the Department cannot take advantage of its own shortcomings to impose liabilities on the taxpayer.
Thus, the bench of Justices J.B. Pardiwala and R. Mahadevan refused to interfere with the judgment of the Telangana High Court and upheld the filing of TRAN-01 though another state’s GST portal when the designated portal experiences technical glitches.
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