JUDGMENT :

A.M. KHANWILKAR, J.

1. This appeal emanates from the judgment and order dated 05.05.2020 passed by the High Court of Delhi in W.P. (C) No.6345 of 2018, whereby the High Court allowed the writ petition filed by respondent No.1 herein and read down paragraph 4 of the Circular No. 26/26/2017-GST dated 29.12.2017¹[for short, “impugned Circular”] issued by the Commissioner (GST), Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, GST Policy Wing²[ for short, “Commissioner (GST)”], to the extent it restricted the rectification of Form GSTR-3B in respect of the period in which the error had occurred. The High Court also allowed respondent No.1 to rectify Form GSTR-3B for the period in which error had occurred, i.e., from July to September 2017. Further, the High Court directed the appellant that on filing of the rectified Form GSTR-3B, they shall, within a period of two weeks, verify the claim set forth by respondent No.1 and give effect to the same once verified.

2. This lis is aftermath of enacting the Central Goods and Services Tax Act, 2017³[for short, “2017 Act”, which came into force with effect from 01.07.2017. Vide Notification No.10/2017 dated 01.07.2017, Rules 59, 60 and 61 of the Central Goods and Services Tax Rules, 2017⁴[for short, “2017 Rules”] were brought into force along with Forms GSTR-1, GSTR-2, GSTR-2A, GSTR-3 and GSTR-3B.

3. In the context of the matter in issue, it may be apposite to take note of the Notification No.17/2017-Central Tax dated 27.07.2017 issued for amending Rule 61 by altering the wording of Rule 61(5) and introducing Rule 61(6). Rule 61(5), as it stood earlier when it came into force, read thus:

“(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, return in FORM GSTR-3B, in lieu of FORM GSTR-3, may be furnished in such manner and subject to such conditions as may be notified by the Commissioner”

4. This provision was not only substituted, but sub-Rule (6) was also inserted in Rule 61 by the said amendment vide Notification No.17/2017-Central Tax. The amended provision reads thus:

“Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise and Customs

Notification No. 17/2017 - Central Tax

New Delhi, the 27th July, 2017

G.S.R. ( )E.:In exercise of the powers conferred by section 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby makes the following rules further to amend the Central Goods and Services Tax Rules, 2017, namely:

(1) …..

…..

2. In the Central Goods and Services Tax Rules, 2017,

…..

(v) in rule 61, with effect from 1st July, 2017, for sub-rule (5), the following sub-rules shall be substituted, namely:

“(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification, specify that return shall be furnished in FORM GSTR-3B electronically through the common portal, either directly or through a Facilitation Centre notified by the Commissioner.

(6) Where a return in FORM GSTR-3B has been furnished, after the due date for furnishing of details in FORM GSTR-2-

(a) Part A of the return in FORM GSTR-3 shall be electronically generated on the basis of information furnished through FORM GSTR-1, FORM GSTR-2 and based on other liabilities of preceding tax periods and PART B of the said return shall be electronically generated on the basis of the return in FORM GSTR-3B furnished in respect of the tax period;

(b) the registered person shall modify Part B of the return in FORM GSTR-3 based on the discrepancies, if any, between the return in FORM GSTR-3B and the return in FORM GSTR-3 and discharge his tax and other liabilities, if any;

(c) where the amount of input tax credit in FORM GSTR-3 exceeds the amount of input tax credit in te