C/SCA/6418/2019 JUDGMENT IN HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 6418 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA Sd/- and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Sd/- 1 Whether Reporters of Local Papers may be allowed to NO see judgment ? 2 To be referred to Reporter or not ? NO 3 Whether their Lordships wish to see fair copy of NO judgment ? 4 Whether this case involves substantial question of law NO as to interpretation of Constitution of India or any order made thereunder ? M/S DEENDAYAL PORT TRUST Versus UNION OF INDIA Appearance: MS VAIBHAVI K PARIKH(3238) for Petitioner(s) No. 1 MR ANKIT SHAH(6371) for Respondent(s) No. 1,2 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 12/02/2020 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Page 1 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT 1. Rule returnable forthwith. Mr.Ankit Shah, learned advocate waives service of notice of rule for respondents. 2. By this petition under Article 226 of Constitution of India, petitioner has prayed for following relief(s): 7(a) direct respondent authorities to allow Input Tax Credit for period from 1st April, 2017 to 30th June, 2017 as appearing in Tran 1; (b) alternatively, direct respondent authorities to permit petitioner to revise tax return for period from 1st April 2017 tp 30th June, 2017 such that different Input Tax Credit left out owing to certain technical glitches can be claimed and further direct respondent authorities to allow such Input Tax Credit to be carried forward in Tran 1 in view of transitional provisions of CGST Act; (c) Pending admission, hearing and final disposal of this petition, direct respondent authorities not to press for reversal or recovery of ITC to tune of Rs.99,46,810/ . (d) Any other and further relief deemed just and proper be granted in interest of justice; (e) to provide for cost of this petition. 3. facts giving rise to this petition may be summarized as under: 3.1 petitioner is body corporate notified under Major Port Trust Act, 1963 established for developing, operating and managing major port in Kandla. Page 2 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT 3.2 petitioner follows cash system of accounting. petitioner filed return of service tax in Form ST 3 for period from 1st April, 2017 to 30th June, 2017 on 14.08.2017. 3.3 It is case of petitioner that after filing of such return, it was realized that there were certain invoices pertaining to said period which remained unaccounted and consequently, Input Tax Credit (for short ITC ) involved in such invoices could not be claimed in return of service tax in Form ST 3. petitioner, therefore, using online facility available on Automation of Central Excise and Service Tax (for short ACES ) filed revised Form ST 3 on 17.09.2017, wherein ITC of Rs.6,94,19,228/ was claimed. 3.4 It is case of petitioner that it was further realized that some more invoices remained unaccounted and ITC involved therein amounting to Rs.99,46,810/ was left out even in revised return in Form ST 3. petitioner, therefore, again tried to file second revise return so as to claim correct amount of ITC. 3.5 It is case of petitioner that online ACES did not permit petitioner to file revised return for second time. petitioner, therefore, could not claim ITC to tune of Rs.99,46,810/ . petitioner, vide letter dated 09.11.2017, requested Assistant Commissioner of Goods and Service Tax, Gandhidham to consider Page 3 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT additional claim of ITC which could not be claimed since ACES portal did not permit second time revision of return in Form ST 3. 3.6 On 1st July, 2017, Central Goods and Service Tax Act, 2017 (for short CGST Act 2017 ) came into effect replacing Service Tax Act. As per transitional arrangement for ITC, provision of Section 140 of CGST Act 2017 is made so as to permit registered person to take to electronic credit ledger, amount of ITC of eligible duties carried forward in return relating to period ending with day immediately preceding appointed day. Accordingly, petitioner filed Form No.Tran 1 online, wherein amount of ITC was entered into including amount of Rs.99,46,810/ . petitioner claimed correct amount of ITC being Rs.7,93,66,038/ (i.e. Rs.6,94,19,228/ + as per revised return Form No.ST 3 + Rs.99,46,810/ being ITC which was not permitted to be claimed by filing second revised return on AECS portal. 3.7 respondent no.2, vide notice dated 07.12.2018, informed petitioner that on verification, Form No.Tran 1 was showing Rs.7,93,66,038/ whereas actual closing balance of ITC in last service tax Form No.ST 3 filed by petitioner was Rs.6,94,19,228/ . It was, therefore, brought to notice of petitioner that petitioner had wrongly claimed ITC of Rs.99,46,810/ . petitioner was, therefore, asked to reverse or Page 4 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT pay differential amount of Rs.99,46,810/ and submit proof of same. 3.8 By letter dated 27.12.2018, petitioner brought correct facts to notice of respondent no.2 and submitted that availing ITC is basic right which cannot lapse on some technical counts. 3.9 respondent no.2, vide notice dated 31.12.2018, informed petitioner that as per Rule 7B of Service Tax Rules, 1994 (for short Rules 1994 ), assessee may file revised return in Form ST 3 within period of 90 days from date of submission of original return in Form ST 3. It was informed to petitioner that when original return is revised, no other option for second revision of return is permitted as per Rules 1994. petitioner has filed this petition for appropriate direction to respondents to permit petitioner to avail ITC of Rs.99,46,810/ under CGST Act 2017. 4. Heard Mr.Tushar Hemani, learned Senior Advocate assisted by Ms.Vaibhavi Parikh, learned advocate for petitioner and Mr.Ankit Shah, learned advocate for respondents. 5. Learned Senior Advocate Mr.Tushar Hemani submitted that respondents could not have denied ITC to petitioner on ground that once original return is in Form of ST 3 is revised, then Page 5 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT there is no option under Rules 1994 to revise it again. It was further submitted that it is right of petitioner to claim ITC under provisions of Service Tax Act as well as CGST Act 2017. petitioner cannot be deprived of legitimate claim of ITC on ground of interpretation made by respondents that no other option is possible once option is exercised under Rule 7B of Rules 1994. It was contended that if there is no mechanism in Tran 1 whereby in case any variation in actual amount of ITC and amount of ITC appearing in ST 3, then actual amount of ITC is required to be granted manually after proper verification. 6. Learned Senior Advocate Mr.Tushar Hemani relied upon Order No.01/2020 GST dated 7th February, 2020, issued by Government of India, Ministry of Finance (Department of Revenue) (Central Board of Indirect Taxes and Customs) to submit that now Portal for Form GST TRAN 1 is again opened for period till 31st March, 2020. It was, therefore, submitted that necessary directions are required to be given to respondents to consider case of petitioner for ITC under CGST Act 2017 considering Form ST 3 filed by petitioner together with differential sum of Rs.99,46,810/ and to verify claim of petitioner then petitioner would be entitled to upload revised Form Tran 1 in order to get credit of ITC to which petitioner is entitled to. 7. On other hand, Mr.Ankit Shah, learned Page 6 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT advocate appearing for respondents relying upon averments made in affidavit in reply filed on behalf of respondents submitted that once original return is revised, there is no option in Rules 1994 to permit assessee to file second revised return, and therefore, petitioner is not entitled to or not eligible to carry forward amount of Rs.99,46,810/ . averments made in affidavit in reply is quoted herein below: 23. As per provision under Rule 7B of Service Tax Rules, 1994, petitioner had revised ST 3 returns on 17.09.2017 and accordingly balance Cenvat Credit in said ST 3 return was Rs.6,94,19,228/ . As per Section 140 of CGST Act, 2017, assesseee was entitled to carry forward at as closing balance in ST 3. As per revised ST 3 return filed by petitioner, closing balance of CENVAT credit was Rs.6,94,19,228/ and hence petitioner was required to file Tran 1 claiming only that amount. Petitioner's claim, that after filing of revised ST 3 returns they again realized that some more invoices remained unaccounted and amount of ITC involved under such invoices was Rs.99,46,810/ , but they could not revise ST 3 return again as online portal did not permit and hence, benefit cannot be denied, is not permitted. In view of above and in view of case laws submitted supra petitioner is not eligible to carry forward amount of Rs.99,46,810/ and same is required to be paid/reversed. 8. It was further submitted that provision of Rule 7B of Rules 1994 provides option to assessee to correct mistake or omission within period of 90 days from date of submission of return under rule 7. Therefore, assessee cannot keep on Page 7 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT filing revised return once option is exercised and ACES portal also would not allow petitioner to file repeatative revised return during period of 90 days. 9. Having heard learned advocates for respective parties and having gone through material available on record, in order to consider issue raised in this petition with regard to terms of filing of revised service tax return for second time, it would be germane to refer Rule 7B of Rules 1994 which reads as under: 7B (1) asseessee may submit revised return, in Form ST 3, in triplicate, to correct mistake or omission, within period of (ninety) days from date of submission of return under rule 7; (provided that revised return for period from 1st day of April 2017, to 30th day of June, 2017, shall be submitted within period of forty five days from date of submission of return under rule 7. (2) assessee who has filed filed annual return referrred to in sub rule (3A) of rule 7 by due date may submit revised return within period of one month from date of submission of said annual return) Explanation: Where assessee submits revised return, relevant date for purpose of recovery of service tax, if any, under Section 73 of Act shall be date of submission of such revised return. 10. On perusal of aforesaid Rule 7B of Rules 1994, it permits assessee to file revised return in form ST 3, in triplicate, to correct Page 8 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT mistake or omission, within period of ninety days from date of submission of return under Rule 7. Rule 7 prescribes for return to be filed under Form ST 3. As per rule 7B, it appears that assessee can revise return filed under Rule 7 within period of 90 days from date of submission of original return under Rule 7 of Rules 1994. Rule 7B only permits assessee to revise mistake or omission in return filed under Rule 7 within period of 90 days. If assessee finds any mistake in form ST 3 file under Rule 7 of Rules 1994, he can revise same in multiple documents within prescribed period. intention of framing of Rule is to revise return Form ST 3 filed under Rule 7 of Rules 1994. 11. In that view of matter, stand taken by respondents that once option is exercised to revise original return then assessee cannot file revised return again within prescribed time period under Rule 7B of Rules 1994 is not tenable. ACES portal not allowing petitioner to revise Form ST 3 for second time within prescribed period resulting into technical glitches is contrary with provisions of Rule 7B of Rules 1994. 12. On one hand, when ACES Portal did not permit petitioner to file revised return for second time due to which claim of ITC to tune of Rs.99,46,810/ was not reflected in last return in Form ST 3 filed by petitioner and on other Page 9 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT hand, when petitioner entered correct amount of ITC including amount of Rs.99,46,810/ in Form Tran 1 while claiming ITC under CGST 2017, there is no mechanism whereby such claim can be verified by system and as such there is difference in amount of ITC in form of ST 3, in system and Form Tran 1 which is filed by petitioner. Therefore, in such circumstances, differential amount of ITC of Rs.99,46,810/ cannot be denied to petitioner on ground of technical glitches not permitting petitioner to file second revised return within prescribed time period, as there is no prohibition as per Rule 7B of Rules 1994 to file revised return more than one time to revise return filed under Rule 7 of Rules 1994 within stipulated period under Rule 7B of Rules 1994. 13. In opinion of the Court, respondents have failed to consider aspect of technical glitches to reject claim of petitioner on ground that petitioner has no option to revise return in Form ST 3 once original return is revised by petitioner. 14. For foregoing reasons, respondents are hereby directed to consider claim of petitioner for amount of ITC of Rs.99,46,810/ manually under Rule 7B of Rules 1994, so as to enable petitioner to take advantage of order dated 07.02.2020 to revise Form Tran 1 to be filed online on or before 31.03.2020. Such exercise Page 10 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 C/SCA/6418/2019 JUDGMENT shall be completed by respondents on verification of claim of petitioner for differential amount of ITC of Rs.99,46,810/ within period of two weeks from date of receipt of copy of this order. 15. petition accordingly, stands disposed of. Rule is made absolute to aforesaid extent. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) GIRISH Page 11 of 11 Downloaded on : Fri Jun 18 12:13:11 IST 2021 Deendayal Port Trust v. Union of India