The period prescribed under Rule 117 of the Rules for filing the TRAN-1 Form was merely directory and not mandatory.

JUDGMENT

Sanjeev Narula, J. - The common thread in this present batch of petitions is that they pertain to transition of CENVAT credit from the erstwhile indirect tax regime to the present Goods and Services Tax ('GST') system by virtue of a right specifically conferred on the taxpayers for smooth migration into the new indirect tax regime.

I. BRIEF BACKGROUND:

2. Chapter XX of the CGST Act, 2017 (hereinafter "the Act"), which deals with transitional provisions, allows for transition of unutilized CENVAT credit available under the previous regime. The statute provides for filing form GST TRAN-1 (hereinafter "TRAN-1 Form") by furnishing details of amount of CENVAT credit sought to be carried forward in the return, relating to the period ending with the day immediately preceding the appointed date, i.e., 1st July, 2017. The last extended date for filing the TRAN-1 Form, was prescribed as 27th December, 2017.

3. Unfortunately, the transitionary mechanism was not smooth and easy for numerous taxpayers. Several factors, including technical glitches and shortcomings in the online system, prevented or obstructed them from filing the TRAN-1 Form by the above deadline. Many taxpayers complained of poor/low internet bandwidth and cited various other technological hindrances while accessing the online portal closer to the deadline, that hindered their attempts. After the cut-off date, the filing was blocked on the online portal.

4. Taxpayers narrating their grievances petitioned this Court and several other High Courts in the country seeking directions to Respondent to re-open the portal. Concurrently, the Government took cognizance of the complaints and acknowledged the genuine problems faced by the taxpayers. Resultantly, a redressal mechanism to address the IT-related glitches was set up, being the IT Grievance Redressal Committee ('ITGRC'). The necessary amendments in the CGST Rules, 2017 (hereinafter "the Rules") were also made by incorporating Rules 117(1A) and 120A, and correspondingly, the deadline for filing TRAN-1 Form was extended.

5. While this provided an opportunity to taxpayers to file the TRAN-1 Form, the benefit was confined only to a specific class of cases where taxpayers could not submit the declaration before the due date purely on account of technical difficulties on the common portal and in respect of whom the GST Council had made a recommendation for such extension. Taxpayers had to furnish digital evidence before the Nodal Officer of the ITGRC showing their attempt to file the form before the deadline, by way of screenshots, correspondence etc.

6. Hence, all the taxpayers could not avail the benefit of this relaxation, and this batch of Petitioners broadly fall in that category. Few of them have digital evidence to support their case but raise the grievance that Respondents have dealt with them in an unfair and arbitrary manner by unreasonably rejecting the proof adduced by them. Some of the taxpayers do not possess evidence like the screenshots to support their case but contend that digital evidence alone should not be the yardstick to test the genuineness of their claims. Others acknowledge that they committed mistakes while filing the TRAN-1 Form as they were not well-versed with the online system and found it cumbersome and complicated and make a plea that they should be afforded another opportunity to claim their legally vested right.

The view taken by this Court and other High Courts

7. The difficulties faced by the taxpayers while filing the online TRAN-1 Form, occurring largely on account of the technical glitches, have been noted in a plethora of decisions by both this Court as well as other High Courts. It has been acknowledged that the unutilized input tax credit is a vested right of the taxpayers under Article 300A of the Constitution of India, 1950 that cannot be taken away on account of technical grounds. Siddharth Enterprises v. Nodal Officer,2019 29 GSTL 664 It has also been appreciated that, since GST i