Important Observations from Delhi High Court Judgment in Brand Equity

Important Observations from Delhi High Court Judgment in Brand Equity

Important Observations from Delhi High Court Judgment in Brand Equity rendered on 05-05-2020 while directing the Union of India to accept the TRAN-1 till 30-06-2020 and publicize the contents of Judgments on its website, so, that others who may not have been able to file TRAN-1 till date are permitted to do so on or before 30.06.2020

1. Technical Difficulty is not the same as a technical glitch. The government is giving “Technical Difficulty” a restrictive meaning by extending dates only for technical glitches under Rule 117(1A). Technical Difficulty is a broader term and can not be restricted to system logs.

2. The access to the GST portal could be hindered for myriad reasons, sometimes not resulting in the creation of a GST log-in record. Further, the difficulties may also be offline, as a result of several other restrictive factors. It would be an erroneous approach to attach undue importance to the concept of “technical glitch” only to that which occurs on the GST Common portal, as a pre-condition, for an assessee/taxpayer to be granted the benefit of Sub-Rule (1A) of Rule 117. Difficulties may also offline.

3. The technical difficulty may be due to low bandwidth, given the fact that before the deadline, a large number of taxpayers all over the country, were trying to submit the declaration in form TRAN-1 [Para 6]

4. It is not fair to expect that each person who may not have been able to upload the Form GST TRAN-1 should have preserved some evidence of it – such as, by taking a screenshot. Many of the registered dealers/traders come from rural/semiliterate background. They may not have had the presence of mind to create any record of their having tried, and failed, to upload the Form GST TRAN-1. They cannot be made to suffer in this background, particularly, when the systems of the Respondents (Union of India) were not efficient.

5. Timeline of 90 days under Rule 117 and further extendable by 90 days is discriminatory and unreasonable and violative of Article 14 of the Constitution.

6. In terms of the residuary provisions of the Limitation Act, the period of three years should be the guiding principle, and thus a period of three years from the appointed date i.e. 30-06-2020 would be the maximum period for availing of such credit. [Residual Entry at S.No. 113 of Part X of Division I of Schedule to Limitation Act]

7. Other taxpayers who are similarly situated should also be entitled to avail of the benefit of this judgment. Therefore, Respondents are directed to publicize this judgment widely including by way of publishing the same on their website so that others who may not have been able to file TRAN-1 to date are permitted to do so on or before 30.06.2020.