The Telangana High Court quashed the demand, penalty, interest against Standard Chartered Bank while stating that due to the technical glitch in Maharashtra’s GST Portal, Bank was constrained to file return in Telangana.
The court said that the pivotal question is whether in the teeth of Section 140 of the GST Act, was there any bar or prohibition for filing return in the GST portal of Telangana where the petitioner’s branch admittedly exists? Since it is a pure question of law, in view of judgment of the Supreme Court in M/s. Godrej Sara Lee Ltd. it was not inclined to relegate the petitioner to avail the statutory alternative remedy.
The Supreme Court in the case of M/s. Godrej Sara Lee Ltd. held that where the controversy is a purely legal one and it does not involve disputed questions of fact but only questions of law, then it should be decided by the high court instead of dismissing the writ petition on the ground of an alternative remedy being available.
The Telangana High Court noted that it was an admitted fact in the show cause notice itself that the petitioner faced problem in filing return electronically because of technical glitch in the GST portal of Maharashtra. For this reason and considering the last date of filing return, the petitioner filed the return in the Telangana GST portal.
It was further observed that the electronic credit ledger establishes that M/s.SCB India has not utilised the credit in Telangana State and in fact, the credit was debited from ECL on the very same day and hence, as per the stand of the petitioner, they have not availed credit in the State of Telangana.
The bench observed that Section 140 (1) of the Act envisages that a registered person other than a person opting to pay taxes under Section 10 shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit. Undisputedly, the registration number/Permanent Account Number of the petitioner is same nationwide. Thus, sub-section (1) of Section 140 does not permit the respondents to arrive at a conclusion that the petitioner was obliged to file return electronically only in the GST portal of Maharashtra.
“Admittedly, the petitioner had registration under the existing law i.e., Service Tax Law and also got himself registered under the Act. The last proviso to sub-section (8) of Section 140 of the Act leaves no room for any doubt that the credit may be transferred to any of the registered person having same Permanent Account Number for which the centralised registration was obtained under the existing law. The filing of return in the GST portal of Telangana and transfer of credit is squarely covered and permissible under the last proviso to sub-section (8) of Section 140”, the court held.
The court said that it was the duty of the Department to keep their portal functional. If the portal was not functional or having technical glitch and because of that the petitioner was compelled to file return in the portal of Telangana, the petitioner cannot be saddled with demand, interest and penalty.
The bench opined that the very foundation of show cause notice itself is bad in law and the assumption of respondent that return could not have been filed in the GST portal of Telangana is not flowing from Section 140 of the Act. Therefore, the action founded upon such a notion is bad in law and deserves interference.
Case Details
Case Name: M/s. Standard Chartered Bank v/s The Principal Commissioner of Central Tax & others
Citation: WRIT PETITION No.648 of 2024
Counsel for Petitioner : Sri Lakshmi Kumaran Sridharan.
Counsel for Respondent : Sri B.Narayan Reddy, Senior Counsel representing Sri Uday Kumar Bhagwath.
Court: Telangana High Court
Judge: Justice Sujoy Paul and Justice Namavarapu Rajeshwar Rao
Decision Date: 11/07/2024
