Objective of Digitization Is To Convenience Taxpayers and Not To Harass Them: Bombay HC

Objective of Digitization Is To Convenience Taxpayers and Not To Harass Them: Bombay HC

The Bombay High Court granted relief to BMW India Financial Services limited stating that the objective of digitization is to convenience taxpayers and not to harass them.

The Petitioner, BMW India Financial Services limited is engaged in financing automobiles in the form of loans and financial leases to various customers in addition to acting as a corporate insurance agent for some insurance companies. The company stated that on 27th December, 2017 it had submitted declaration in Form GST TRAN-I for the unit in Maharashtra for transitioning credit of Rs. 17,07,673 and had also received acknowledgement of the same.

Further, post filing of the Form, the petitioner also received a confirmation e-mail from 'do not reply @gst. gov.in' confirming the successful filing of the transition Form by the Petitioner. It was alleged that the entire credit of VAT/State tax of Rs. 17,07,673 was not reflected on the electronic credit ledger as the credit could not be transitioned despite submitting the form on time on the GSTN common electronic portal in time.

According to the Petitioner, the said failure was due to the technical glitches in the Respondents GSTN portal which defeated the Petitioner's substantive right to transition tax credit for no fault of the Petitioner.

Aggrieved by denial of transitioning the credit of Rs. 17,07,673 after the submission of declaration in Form GST TRAN-1 on 27th December, 2017 in time on GSTN portal (Respondent authority) and admission of successful filing of the same by the Respondent authorities, the Petitioner challenged the action of the Respondents as being violative of Articles 14, 265 and 300-A of the Constitution of India.

The request of the Petitioner for transitioning of credit was not approved by the Information Technology Governance, Risk and Compliance (ITGRC) merely on the basis that there were no technical glitches on the GSTN side. The Respondent authority did not provide further explanation or clarification or evidence on the issue.

The division judge bench of Justices Abhay Ahuja and Ujjal Bhuyan held that the whole objective of digitization is to convenience the tax payers and not to harass them. The bench said "We are of the view that merely because there were no technical glitches in the GSTN with respect to the Petitioner's TRAN-1 which was admittedly filed in time, the claim of the Petitioner, if it was otherwise eligible in law, cannot be rejected for no apparent fault on the part of the Petitioner. This cannot be the objective of the GST system or digitisation. Such a situation cannot be countenanced as it would be wholly unfair and unjust".

The Court directed the GST Maharashtra Commissioner ate, GSTN and the Goods and Services Tax Council to consider the case of the petitioner and after looking into the merits of the claim, to facilitate the transition of credit of over Rs. 17 lakh to the petitioner within four weeks.