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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
G. S. Kulkarni, Jitendra Jain, JJ.
Star Engineers (I) Pvt. Ltd. - Petitioner
Vs.
Union of India - Respondent
Writ Petition No.15368 Of 2023
Decided On : 14-12-2023
GSTR-1 - Amendment Request Rejection - Sections 37, 38, 39 of CGST/MGST, 2017 - The court discussed the provisions of Sections 37, 38, and 39 of the CGST/MGST, 2017, and interpreted them to allow rectification of inadvertent errors in GST returns when there is no loss of revenue to the government. The court highlighted the need for an assessee-friendly approach and emphasized the importance of recognizing and permitting correction of bonafide errors in GST returns.
Fact of the Case:
The petitioner sought to rectify an error in Form GSTR-1 for FY 2021-2022, where the GSTIN of third parties was reported instead of the correct party. This led to denial of Input Tax Credit (ITC) to the recipient and financial hardship to the petitioner.
Finding of the Court:
The court found that the rejection of the petitioner's request to rectify/amend Form GSTR-1 was arbitrary and that the provisions of the GST Act allowed for rectification of inadvertent errors when there was no loss of revenue to the government.
Issues: The main issue was whether the petitioner should be permitted to rectify/amend Form GSTR-1 for the period in question, considering the inadvertent error and absence of loss of revenue to the government.
Ratio Decidendi: The court interpreted the provisions of Sections 37, 38, and 39 of the CGST/MGST, 2017 to allow rectification of inadvertent errors in GST returns when there is no loss of revenue to the government. The court emphasized the need for an assessee-friendly approach and recognized the importance of permitting correction of bonafide errors in GST returns.
Final Decision: The court directed the respondents to permit the petitioner to amend/rectify the Form GSTR-1 for the period in question, either through Online or manual means within a period of four weeks from the date of the judgment.
JUDGMENT :
G. S. Kulkarni, J.
1. This petition under Article 226 of the Constitution of India essentially challenges a communication dated 27 September 2023 issued by the respondent-Deputy Commissioner, State Tax, whereby on an application of the petitioner for seeking approval to modify/amend FORM GSTR-1 for financial year 2021-2022 dated 11 September 2023, the petitioner has been informed that such a request for amendment of Form GSTR-1 cannot be approved considering that the matter is time barred and accordingly, the petitioner’s application would stand rejected. At the outset it would be necessary to extract the communication which reads thus:
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| “Office of the Dy. Commissioner of State Tax, Pune_LTU_505, Large Tax Prayers Unit-I, Cabin No.422, 4th Floor, GST Bhavan, Airport Road Yerwada, PUNE-411006 Tel. 26609032 Email-dcgste605@gmail.com |
| To. M/s. Star Engineers(I) Private Limited, 54/2,D-11 Block MIDC-Chinchwad, Pune-411019, Maharashtra, GSTN: 27AAHCS6334BIZI
No:DCST/LTU-1/E-506/Star Engineers/27AAHCS6334BIZI/23-24/B-252 Pune DT.27/09/2023
Subject: Regarding Application for seeking approval to modify/amend From GSTR-1 for FY 2021-22.
Reference : Your application on dated 11/09/2023. _____________
With reference to the above subject, you have requested for correction in Form GSTR-1 of FY 2021-22 namely for the months of July 2021, November 2021 and January 2022 on account of human error committed by your Company wherein, inadvertently, GSTINs of “Ship to” parties were reported in GSTR-1 instead of “Bill to” party-Bajaj Auto Limited.
From the evaluation of facts and supporting thereof, through there does not appear to be any loss of revenue to the Government exchequers, however, provisions under the GST Act prohibits any additional modifications or adjustments post the due date.
Therefore, the request of the Company for amendment of GSTR-1 now for sales transactions pertaining to FY 2021-22 is not approval considering the matter is time-barred and thus, your application stands rejected. | |
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| PANDITRAO DHOKALE Dy. Commissioner of State Tax Pune LTU 505 LTU-1, PUNE” (emphasis supplied) |
2. The relevant facts are required to be noted:
The petitioner is engaged in designing, developing, manufacturing and supplying wide range of electronic components for industrial purpose. It is the petitioner’s case that it is a regular supplier to Bajaj Auto Limited (BAL) and delivers its products based on varying delivery terms as specified in the purchase orders received from BAL.
3. The petitioner contends that during the financial year 2021-2022 the petitioner had carried out delivery of the goods to several third-party vendors and simultaneously invoices were generated “Bill-to-Ship-to-Model” in line with the instructions received from BAL. During the said period, the company had correctly issued the e-invoices and credit notes in favour of BAL by appropriately citing its GST identification number (“GSTIN”). However, at the time of filing of Form GSTR-1 for the period July 2021, November 2021 and January 2022, inadvertently GSTIN of third parties to whom shipment was delivered, was reported instead of declaring GSTIN of BAL.
4. The petitioner contends that BAL was made aware of such error, post the due date of correction in Form GSTIN-1 for the financial year 2021-22 by one of the vendors to whom the goods were shipped, as the transaction was notified in Form GSTR-2B. In pursuance thereto, the petitioner tried to rectify the invoices in question to address the error, however, as the mistake came to the notice of the petitioner in the month of November 2022, GST Portal did not allow any modification in Form GSTR-1 pertaining to the period of July 2021, November 2021 and January 2022.
5. In such circumstances, the invoices submitted by
The main legal point established in the judgment is that the provisions of the GST Act allow for rectification of inadvertent errors in GST returns when there is no loss of revenue to the government,....
Bonafide errors in GST returns should not obstruct rectification where no revenue loss occurs, promoting accuracy and fairness under GST provisions.
The court established that inadvertent errors in GST filings can be rectified without loss of revenue, promoting an equitable approach in tax compliance.
Inadvertent mistakes in filing tax returns should be permitted to be corrected, especially in the absence of an effective, enabling mechanism under the statute.
A taxpayer may be permitted to amend GST forms post-deadline under specific circumstances, provided procedural compliance and prior filing errors justify such corrections.
[The judgment establishes that while Input Tax Credit (ITC) should not be denied solely based on procedural errors, strict compliance with the statutory provisions of the CGST Act is essential for av....
Taxpayers must be granted an opportunity to rectify bona-fide clerical errors in tax filings. Furthermore, remedial legislative amendments that extend deadlines for claiming input tax credit are appl....
The court ruled that system delays in transitioning Input Tax Credit should not prevent a taxpayer from obtaining a refund, emphasizing the need for operational efficiency in tax administration.
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