Department’s inability to maintain a functional portal should not penalize the petitioner

Facts of the case: The Petitioner bank, with its headquarters in Mumbai, Maharashtra, and centralized registration in the state, encountered a technical glitch on the Maharashtra GST portal. Consequently, the bank filed its return on the GST portal of Telangana, took credit on the same day, and transferred it to the Maharashtra portal immediately. Despite these actions, the petitioner faced a demand for reversal of the credit along with applicable interest and penalties, alleging ineligibility of the credit availed through the TRAN-I return filed in Telangana. The petitioner emphasized that there was no undue benefit derived from this action, nor did the revenue suffer any loss. Additionally, the petitioner argued that there is no prohibition of Sections 140(1) and (8) of the GST, as it does not bar filing returns in another state where the petitioner has a branch under such circumstances. 

Held that: The Telangana High Court, in this case addressed the conundrum where the petitioner, a bank headquartered in Mumbai, Maharashtra, and registered centrally under both Service Tax and GST regimes, was unable to file its return on the GST portal of Maharashtra due to a technical glitch. The Court found that Section 140 of the GST Act, particularly subsections (1) and (8), did not prohibit the filing of returns in another state where the petitioner's branch existed. The court emphasized that it was the revenue's responsibility to ensure their portal was functional and that they could not penalize the petitioner for using an alternative portal due to these technical issues. The court concluded that the show cause notice and the impugned order were bad in law, relieving the petitioner of the confirmed demand, interest, and penalties. 

To read the complete judgment 2024 taxo.online 1589