The Chhattisgarh High Court has asked the local GST Commissioner to refer to the GST Council the matter of granting more time to file a transitional credit claim with those assesses who were unable to do so in time because of technical failures. Transitional loan, or CENVAT loan, refers to the use of tax credit accrued up to June 30, 2017, the last day of the former Central excise and service tax regime.
"In the event that the Commissioner, Commercial Tax, makes a reference to the GST Council, it is required that the Council will also, in effect, take an early decision on the reference made by the Commissioner ideally within 90 days of the date on which the Commissioner receives a reference," said a single-judge bench in its ruling. Under GST Act, Section 117(1)A, the GST Council was allowed to extend the date on which the declaration was submitted electronically in Form GST TRAN-1 for those persons who were unable to send it by the due date due to the technical difficulties on the portal, and one can also fo GST search here for verifying the Indian company.
In a petition, petitioner Dhamtari Krishi Kendra said he had tried to file a claim for CENVAT credit before December 27, 2017, due to date, but was unable to do so due to technical failures. He reported the matter to the tax department immediately. He subsequently manually sent the return in January 2018, and also sent a copy via email. The department didn't recognize both which made him approach the high court. The court then told him to approach the officer at Nodal. He was refused permission to file the lawsuit, however. Therefore, he went to court again.
The court took notice of elements that had been ignored by the Tax Commissioner. Those include proofs supporting the petitioner's argument that he is unable to file the return due to technical failure, filing the complaint before due date and sending the form manually and even via the post within three weeks of due date. "This court, therefore, returns the matter to the Commissioner, Commercial Tax, for reconsideration and for a fresh order to be issued," the ruling said, adding that he/she will bear in mind all the documents submitted by the applicant and decide within 60 days. The Commissioner can refer the matter to the GST Council if appropriate, the court said.
Divakar Vijayasarathy, DVS Advisors LLP 's founder and managing partner, said the decision highlights the apathy in the system which refuses to be tax-payer friendly. "As much as we need to follow the statute, situations such as these tend to be understood from the context rather than from the text itself. The incapacity to comply for causes beyond the taxpayer's control can also be regarded from a benevolent viewpoint.
"With a legal system that is saddled with a huge backlog and an outdated executive structure, the country needs significant changes to get anywhere close to our goal to be pleasant to business," he said.
