Super India Paper Products v. Union of India
(2021) 50 GSTL 371: (2022) 97 GSTR 39
In the High Court of Delhi
WP(C) 1150/2020 and CM App. 3814/2020
Before Justice Manmohan and Justice Sanjeev Narula
Decided on May 27, 2021

Relevancy of the case: Accountability for technical issues and glitches in the online portal for transferring Cenvat credits to the GST platform

Statutes and Provisions Involved

• The Central Goods and Services Tax Act, 2017 (Chapter XX)
• The Central Goods and Services Tax Rules, 2017 (Chapter XIV)

Relevant Facts of the Case

• After transforming the tax system to the present Goods and Services Tax regime, taxpayers wanted to convert their unutilised Cenvat credits to the new system.
• For the above conversion, a taxpayer had to complete the TRAN 1 forms by the prescribed date. However, the online system had technical glitches and shortcomings.
• The recently developed online system and technical issues made it difficult for many taxpayers to complete the TRAN 1 form online before the due date. As a result, taxpayers were deprived of their Cenvat credits.
• The tax authorities had set up a redressal mechanism to address the technical issues. They also extended the deadline for submitting the form. However, the extension was only available for taxpayers who could not fill out the form due to technical reasons. They had to attach digital evidence to avail themselves of the extended deadline.

Prominent Arguments by the Advocates

• The petitioner’s counsel argued that the fast-paced transformation and shortcomings in the online system to fill out the TRAN 1 form resulted in taxpayers being unable to exercise their legal right over their property, which is the Cenvat credit.
• The respondent’s counsel submitted that Cenvat credit is not a vested right but a creation of statute. Therefore, it had to be availed within the boundaries prescribed. The counsel also contended that a redressal mechanism was set up to address taxpayers’ genuine difficulties.

Opinion of the Bench

• Cenvat credit is property under Article 300A of the Constitution, and no one could be deprived of the said property except by authority of law.
• Taxpayers should be given the benefit of the doubt and be entitled to claim the credits without any digital evidence.
• A genuine mistake should not result in petitioners losing their accumulated credits. Article 300A of the Constitution protects those credits.

Final Decision

• The bench directed the respondents to reopen the online portal or enable the petitioners to file the TRAN 1 form manually before June 30, 2021.