Delhi High Court - Orders
Dell International Services India ... vs Union Of India & Ors on 20 November, 2024
Author: Yashwant Varma
Bench: Yashwant Varma, Dharmesh Sharma
$~29
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 9008/2022
DELL INTERNATIONAL SERVICES INDIA PRIVATE
LIMITED .....Petitioner
Through: Mr. Yogendra Aldak, Mr.
Kunal Kapoor, Mr. Yatharth
Tripathi, Advs.
versus
UNION OF INDIA & ORS. .....Respondents
Through: Ms. Sonu Bhatnagar, Sr. SC,
CBIC with Ms. Apurva Singh
and Ms. K.S. Mary, Advs. for
R-2 to R-7.
Mr. Udit Malik, ASC for
GNCTD with Mr. Vishal
Chanda and Ms. Rima Rao,
Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE DHARMESH SHARMA
ORDER
% 20.11.2024
1. The present writ petition has been preferred seeking the following reliefs:-
"a) Issue a Writ of Certiorari or any other appropriate writ or order or direction in the nature thereof, quashing the impugned letter bearing C. No. DLSouth/ GST/Div-Okhla/R-76/De11/402/2020-
21/10212 dated 05.01.2021, as untenable in law being contrary to the provisions of GST laws and prejudicial to the accrued and vested rights of the Petitioner;
b) Issue a writ of Mandamus or any other appropriate writ or order or direction in the nature thereof, declaring that the Petitioner is entitled to utilize the credit of eligible duties carried forward in terms of Section 140 of the Central Goods and Services Tax Act, 2017 for payment towards outward tax for the taxable period commencing July 2017;
c) Issue a writ of Mandamus or any other appropriate writ or order This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/11/2024 at 21:42:36 or direction in the nature thereof, ordering and directing the Respondent No. 3 themselves, their officers and subordinates to forthwith allow filing of revised GSTR-3B from July 2017 to till date permitting utilization of transitional credit from July 2017 onwards, in a time bound manner;
d) Issue a Writ of Mandamus or any other appropriate writ or order or direction in the nature thereof, to Respondent No. 5 directing it to sanction refund of Rs. 3,00,46,015/-, relating to excess cash paid to discharge output tax liability to the extent of transitional credit, from the credit balance as on date;
e) for such further and other reliefs as the nature and circumstances of the case"
2. We take note of the submissions addressed by Mr. Aldak, learned counsel, who places reliance upon the judgment rendered by Division Bench of the Court in Vision Distribution Pvt. Ltd. vs. Commissioner, State Goods & Services Tax and Ors.1 and where the following observations appear: -
"7. Having heard learned counsels, we are inclined to direct partial refund of the amount claimed by the Petitioner. We are of the view that the Petitioner cannot be made to suffer on account of failure on the part of the Respondents in devising smooth transition to GST regime w.e.f. 01.07.2017, from the erstwhile indirect taxation structure. The Petitioner, being an exporter under the GST regime is entitled to undertake zero rated supplies. The Petitioner claims to have undertaken exports in the months of July and August, 2017 and since its unutilized Input Tax Credit - to the tune of Rs. 3,13,06,050/-, which was accumulated up to June, 2017, was not reflected in its ITC ledger as on 01.07.2017, it could not utilize the same w.e.f. 01.07.2017. The same resulted in the Petitioner having to shell out, in cash, Rs. 1,37,37,029/- which would not have been required, had the Respondents taken care to ensure that the Petitioner was able to utilize its accumulated Input Tax Credit in the said months. Even the Form GST TRAN-1 was made available on the portal of the Respondents only from 25.08.2017. The business activity in the country could not be expected to come to a standstill, only to await the Respondents making the GST system workable. The failure of the Respondents in first putting a workable system in place, before implementing the GST regime, reflects poorly on the concern that the Respondents have shown to the difficulties that the trade faced throughout the length and breadth of the country. Unfortunately, even after passage of over 1 2019 SCC OnLine Del 12136 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/11/2024 at 21:42:36 two years, the Respondents have not remedied their omissions and failures by taking corrective steps. They continue to take shelter of the limitations in, and the inability of their software systems to grant refund, despite the same being justified. The rights of the parties cannot be subjugated to the poor and inefficient software systems adopted by the Respondents. The software systems adopted by the Respondents have to be in tune with the law, and not vice versa. The system limitations cannot be a justification to deny the relief, to which the Petitioner is legally entitled. We, therefore, reject the hyper technical objections sought to be raised by the Respondents - to the effect, that no refund can be granted, because the system did not reflect any credit lying in the ITC ledger of the Petitioner for the months of July and August, 2017. If that is so, it is entirely the Respondents making. In fact, to permit the Respondents to get away with such an argument would be putting premium on inefficiency. We therefore, reject the submission."
3. However, of equal significance would be the following findings which have come to be rendered by the Supreme Court in Union of India vs. Bharti Airtel2 insofar as a claim for refund is concerned: -
"60. The Delhi High Court in the present case then relied on the decision of the Punjab & Haryana High Court in Adfert Technologies (P) Ltd. v. Union of India [Adfert Technologies (P) Ltd. v. Union of India, 2019 SCC OnLine P&H 5701 : 2019-TIOL- 2519-HC-P&H-GST] . In that case, the petitioner was unable to file return before 31-12-2017 being the extended time due to heavy load upon accountants, who were having number of assesses, lack of proper knowledge of computer system, complexity in filling different columns of TRAN-1, etc. The Punjab & Haryana High Court noted that GST was an electronic based tax regime and most of people of India were not conversant with electronic mechanism and not able to load simple forms electronically. Be it noted that the factum of inability to access the electronic portal to submit return within the specified time due to technical faults in the portal is entirely different than the assertion to grant adjustment of amount voluntarily paid in cash by the assessee towards OTL. The latter can be allowed only if the law enacted by Parliament expressly permitted such swapping of entries of the electronic credit ledger vis-à-vis electronic cash ledger; and certainly not permissible in the teeth of Section 39(9) of the 2017 Act.
61. Relying on the decision of the Gujarat High Court in Siddharth Enterprises v. Nodal Officer [Siddharth Enterprises v. Nodal 2 (2022) 4 SCC 328 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/11/2024 at 21:42:37 Officer, 2019 SCC OnLine Guj 3711 : 2019-TIOL-2068-HC- AHM-GST] , however, the High Court in Adfert Technologies case [Adfert Technologies (P) Ltd. v. Union of India, 2019 SCC OnLine P&H 5701 : 2019-TIOL-2519-HC-P&H-GST] noted that denial of credit of tax/duty paid under existing Acts would amount to violation of Articles 14 and 300-A of the Constitution of India. It noted that unutilised credit has been recognised as vested right and property in terms of Article 300-A of the Constitution. This decision was on facts of that case concerning erroneous entry recorded in Form GSTR-3B and not regarding right asserted to swap the mode of payment of OTL in cash to be adjusted against electronic credit ledger as in the present case in the guise of rectification of return filed in Form GSTR-3B for the earlier period.
62. Reference was then made in Adfert Technologies case [Adfert Technologies (P) Ltd. v. Union of India, 2019 SCC OnLine P&H 5701 : 2019-TIOL-2519-HC-P&H-GST] to decision of this Court in MRF Ltd. v. CST [MRF Ltd. v. CST, (2006) 8 SCC 702] , wherein it is held that a person may have a legitimate expectation of being treated in a certain way by an administrative authority, even though he has no legal right in private law to receive such treatment.
63. The High Court in Adfert Technologies case [Adfert Technologies (P) Ltd. v. Union of India, 2019 SCC OnLine P&H 5701 : 2019-TIOL-2519-HC-P&H-GST] then referred to the decision of Delhi High Court in Krish Automotors (P) Ltd. v. Union of India [Krish Automotors (P) Ltd. v. Union of India, 2019 SCC OnLine Del 10090 : 2019-TIOL-2153-HC-DEL- GST] , which had permitted the writ petitioners to either submit the TRAN-I form electronically by opening the electronic portal or to tender the said form manually before the specified date and thereafter to process the claim for ITC in accordance with law. The Punjab and Haryana High Court in Adfert Technologies case [Adfert Technologies (P) Ltd. v. Union of India, 2019 SCC OnLine P&H 5701 : 2019-TIOL-2519-HC-P&H-GST] agreed with the view [Siddharth Enterprises v. Nodal Officer, 2019 SCC OnLine Guj 3711 : 2019-TIOL-2068-HC-AHM-GST] taken by the Gujarat High Court and the Delhi High Court [Krish Automotors (P) Ltd.v. Union of India, 2019 SCC OnLine Del 10090 : 2019- TIOL-2153-HC-DEL-GST] .
64. The conclusion so recorded by the Punjab and Haryana High Court in Adfert Technologies case [Adfert Technologies (P) Ltd. v. Union of India, 2019 SCC OnLine P&H 5701 : 2019-TIOL- 2519-HC-P&H-GST] will have no bearing on the facts of this case in light of the opinion expressed in this judgment, as we have held that consequent to submission/filing of Form GSTR-3B, as This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/11/2024 at 21:42:37 envisaged by the 2017 Act, it can be rectified only in the manner specified in Section 39(9) read with Rule 61(5), as applicable at the relevant time. In other words, the rectification can be done only in the return to be furnished in the month or quarter during which such omission or incorrect particulars are noticed and not in the return for the period to which it relates.
65. The High Court in the impugned judgment [Bharti Airtel Ltd. v. Union of India, 2020 SCC OnLine Del 2073] , has also adverted to the decisions of the Delhi High Court in Blue Bird Pure (P) Ltd. v. Union of India[Blue Bird Pure (P) Ltd. v. Union of India, 2019 SCC OnLine Del 9250] and in Lease Plan India (P) Ltd. v. State (NCT of Delhi) [Lease Plan India (P) Ltd. v. State (NCT of Delhi), 2019 SCC OnLine Del 11931] . For the same reasons, the conclusion reached in the said two decisions will be of no avail to Respondent 1.
66. We need not multiply the authorities referred to in the judgments concerned, and cited before us, as in our opinion, these decisions have not dealt with the cardinal aspect of statutory obligation fastened upon the registered person to maintain books of accounts and record within the meaning of Chapter VII of the 2017 Rules, which are primary documents and source material on the basis of which self-assessment is done by the registered person including about his eligibility and entitlement to get ITC and of OTL. Form GSTR-2A is only a facilitator for taking an informed decision while doing such self-assessment. Non-performance or non-operability of Form GSTR-2A or for that matter, other forms, will be of no avail because the dispensation stipulated at the relevant time obliged the registered person to submit returns on the basis of such self-assessment in Form GSTR-3B manually on electronic platform. The provision contained in Section 39(9) of the 2017 Act and Rule 61 of the Rules framed thereunder, as applicable at the relevant time, apply with full vigour to the returns filed by the registered person in Form GSTR-3B.
67. Significantly, the registered person is not denied of the opportunity to rectify omission or incorrect particulars, which he could do in the return to be furnished for the month or quarter in which such omission or incorrect particulars are noticed. Thus, it is not a case of denial of availment of ITC as such. If at all, it is only a postponement of availment of ITC. The ITC amount remains intact in the electronic credit ledger, which can be availed in the subsequent returns including the next financial year. It is a different matter that despite the availability of funds in the electronic credit ledger, the registered person opts to discharge OTL by paying cash. That is a matter of option exercised by the registered person on which the tax authorities have no control, whatsoever, nor they have any role to play in that regard. Further, there is no express This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/11/2024 at 21:42:37 provision permitting swapping of entries effected in the electronic cash ledger vis-à-vis the electronic credit ledger or vice versa.
68. A priori, despite such an express mechanism provided by Section 39(9) read with Rule 61, it was not open to the High Court to proceed on the assumption that the only remedy that can enable the assessee to enjoy the benefit of the seamless utilisation of the input tax credit is by way of rectification of its return submitted in Form GSTR-3B for the relevant period in which the error had occurred. Any unilateral change in such return as per the present dispensation, would have cascading effect on the recipients and suppliers associated with the transactions concerned. There would be complete uncertainty and no finality could ever be attached to the self-assessment return filed electronically. We agree with the submission of the appellant that any indulgence shown contrary to the statutory mandate would not only be an illegality but in reality, would simply lead to chaotic situation and collapse of tax administration of the Union, States and Union Territories. Resultantly, assessee cannot be permitted to unilaterally carry out rectification of his returns submitted electronically in Form GSTR- 3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records.
69. As noted earlier, the matching and correction process happens on its own as per the mechanism specified in Sections 37 and 38, after which Form GSTR-3 is generated for the purposes of submission of returns; and once it is submitted, any changes thereto may have cascading effect. Therefore, the law permits rectification of errors and omissions only at the initial stages of Forms GSTR-1 and GSTR-3, but in the specified manner. It is a different dispensation provided than the one in pre-GST period, which did not have the provision of auto-populated records and entries."
4. In order to enable learned counsels for respective sides to address submissions further, let the matter be called again on 03.12.2024.
YASHWANT VARMA, J.
DHARMESH SHARMA, J.
NOVEMBER 20, 2024/gunn This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/11/2024 at 21:42:37