By TIOL News Service

HYDERABAD, OCT 08, 2018: FACTS: Joint Commissioner, Visakhapatnam on 27.06.2018 rejected the petitioners' request to receive their return in FORM GST TRAN-1 which would enable them to claim input tax credit for the tax paid prior to the introduction of GST. The Joint Commissioner refused to accept the plea of server error/technical difficulties in filing FORM GST TRAN-1 on 27.12.2017 holding that the statistics showed that several such returns were filed between 24.12.2017 and 27.12.2017; and there appeared to be no technical glitch/system related matter that prevented the petitioners from filing their TRAN-1 in time. Incidentally, whether or not the petitioners had attempted to file their return in FORM GST TRAN-1 on 27.12.2017 has not been examined by the Joint Commissioner in the impugned order.

By Order No.09/2017- GST dated 15.11.2017, the Government of India, on the recommendation of the GST Council and in supersession of its earlier Order No.07/2017-GST dated 28.10.2017, extended the period for submitting the declarations in FORM GST TRAN-1 till 27.12.2017.

The petitioners submitthat they had attempted to file their return on 27.12.2017.

The Counsel for the Revenue adverted to the letter addressed by the petitioners on 19.02.2018 to submit that, even on their own admission, the petitioners did not seek to file the return in FORM GST TRAN-1 by 27.12.2017; and they had, in fact, admitted having attempted to do so only on 28.12.2017.

The CBIC issued a notification No. 48/2018-CT dated 10.09.2018 amending Rule 117 of CGST Rules by inserting Clause (1A) thereto and a proviso to Rule 117(4)(b)(iii).

The amended Rule 117(1A) and the proviso to Rule 117(4)(b)(iii) read thus:

"Notwithstanding anything contained in sub-rule (1), the Commissioner may, on the recommendations of the Council, extend the date for submitting the declaration electronically in FORM GST TRAN-1 by a further period not beyond 31 st March, 2019, in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal and in respect of whom the Council has made a recommendation for such extension."

"Provided that the registered persons filing the declaration in FORM GST TRAN-1 in accordance with sub-rule (1A), may submit the statement in FORM GST TRAN-2 by 30 th April, 2019."

In terms of the amendment brought about by Rule 117(1A) of the CGST Rules, power has been conferred on the Commissioner, on the recommendations of the GST Council, to extend the date for submitting the declaration electronically in FORM GST TRAN-1 by a further period not beyond 31.03.2019 in respect of registered persons who could not submit the said declaration by the due date on account of technical difficulties on the common portal, and in respect of whom the Council has made a recommendation for such extension.

The High Court noted -

++ The very fact that the Government of India has, itself, issued a notification amending the Rules is its recognition of the fact that certain dealers were unable to electronically submit their declarations in FORM GST TRAN-1 on 27.12.2017.

++ Pursuant to Notification No.48/2018, the Commissioner (GST) issued Order No.4/2018-GST dated 17.09.2018 exercising his powers under Rule 117(1A) of the CGST Rules, to extend the period for submitting the declarations in FORM GST TRAN-1 till 31.01.2019 for the class of registered persons who could not submit the declaration by the due date on account of technical difficulties on the common portal, and whose cases have been recommended by the Council.

The petitioners informed that their representation dated 14.03.2018 made to the GST Council is still pending consideration of the Council.

The High Court, therefore, observed –

++ It is wholly unnecessary for us to examine whether or not the inability of the petitioners to submit their return, in FORM GST TRAN-1 by 27.12.2017, was on account of technical glitches or a server error or any such other difficulties, as these are all matters for the 3rd respondent to examine.

++ The impugned order dated 27.06.2018 does not deal with the petitioners' claim of inability to file their return in FORM GST TRAN-1 on 27.12.2017 because of server error; and, instead, relies on general statistics to justify rejection of the petitioners' claim to have made attempts to file FORM GST TRAN-1 on 27.12.2017. Since the petitioners are entitled to have their case considered in accordance with law, and in terms of the notifications dated 10.09.2018 and the order dated 17.09.2018, the impugned order dated 27.06.2018 is set aside.

++ It is open to the petitioners, in terms of the notification dated 10.09.2018 and the subsequent order dated 17.09.2018, to seek recommendation of the GST Council for submission of FORM GST TRAN- 1 within the time frame stipulated in the order dated 17.09.2018, and to satisfy the authorities concerned that their attempts to file FORM GST TRAN-1 on 27.12.2017 failed because of a systems error or server related issues.