The High Court of Delhi on 5th May, 2020 passed a judgement in the case of four Petitioners namely Brand Equity Treaties Limited, Micromax Informatics Ltd., Developer Group India Private Limited, Reliance Elektrik Works vs. Union Of India & ORS (Respondent) stating that the taxpayers can file TRAN-1 to avail the CENVAT or Input Tax Credit on or before 30th June, 2020. The briefs of case are described as under:
Facts of the Case
- The petitioner namely Developer Group India Private Limited first filed refund application for CENVAT credit on 2nd January, 2018 however due to technical glitches the refund could not be processed, therefore the application was filed with High Court to seek direction.
- The petitioner namely Brand Equity Treaties Limited was not able to file Form TRAN-1 because of the dependence at group level in the context of tax compliances and involvement of multiple entities which resulted in failure of filing TRAN-1 in due time.
- The petitioner namely Micromax Informatics Ltd. filed Tran-1 with some errors in it which were rectified by petitioner but the same was not populated in his TRAN-1 and therefore credit could not be availed.
- The petitioner namely Reliance Elektrik Works was trying to upload its claim in TRAN-1 but due to technical errors and confusion it was not able to able to file the Form in prescribed time.
- The respondent opposed by saying that petitioners exhibited a casual approach while filing form TRAN-1 and the same cannot be attributed to any technical glitches.
- Court held that transition from the erstwhile regime to GST for the availment of the CENVAT credit was to be by way of a declaration to be submitted electronically in Form GST TRAN-1. The date prescribed for filing of the said Form was extended several times by way of orders issued from time to time, finally till 27th December, 2019. Several taxpayers however could not meet the deadline due to inadequacies in the network of respondent.
- Due to above mentioned problem several complaints were made by taxpayers few of which were settled at government level however few were taken to court and relief was given to them because court acknowledged the fact that there were technical glitches on portal.
- Considering the above facts of petitioners and by taking into consideration the judgements passed by court in previous cases, the court held that although the failure was on part of petitioners but the error was inadvertent. Therefore, the petitioners were allowed to file form TRAN-1 within the new prescribed limit.
High Court after considering the above facts and observations passed the following rulings:
- The CENVAT credit which has accrued and vested is the property of the assesse, and is a constitutional right under Article 300A of the Constitution. It cannot be taken away by way of delegated legislation by framing rules.
- Transition from pre-GST Regime to GST Regime has not been smooth. In absence of any specific provisions under the Act, the court held that in terms of the residuary provisions of the Limitation Act, the period of three years should be the guiding principle and thus a period of three years from the appointed date would be the maximum period for availing of such credit.
- Therefore, taxpayers are allowed to file form TRAN-1 on or before 30th June, 2020. The form will be allowed to fill either online on portal electronically or manually.
- The court has further directed Respondent to publicise the judgment widely so that taxpayers who were not able to file form can do it now.