2020 (11) TMI 108 - HC - GST

Court allows correction of GST form errors, emphasizes timely credit rectification.

The court allowed the writ petition, setting aside the rejection of the petitioner's request to amend Form GSTR-1 due to an inadvertent error in reporting ... Furnishing details of outward supplies - Rectification of errors in returns - Time limit for rectification and proviso - Input Tax Credit allocation between IGST, CGST and SGST - Availability of enabling mechanism for matching and correction (GSTR-2A / GSTR-1A)Furnishing details of outward supplies - Rectification of errors in returns - Time limit for rectification and proviso - Input Tax Credit allocation between IGST, CGST and SGST - Availability of enabling mechanism for matching and correction (GSTR-2A / GSTR-1A) - Permissibility of allowing petitioner to correct erroneously reported credit (IGST instead of CGST/SGST) for returns filed for August 2017 to December 2017 despite expiry of statutory rectification period - HELD THAT: - The statutory scheme under Chapter IX requires furnishing of outward supplies (Form GSTR 1) and permits rectification of errors subject to the proviso which prescribes a final cut off (extended to 31.03.2019). Admittedly the statutory window for rectification had expired (see the proviso to Section 37(3) as extended). However, the infrastructure and prescribed recipient facing forms (GSTR 2A and GSTR 1A) by which mismatches would have been noticed and corrected were not notified, thereby depriving the petitioner and its customers of an effective mechanism to detect and correct the inadvertent misclassification of intra state supplies as inter state supplies leading to wrong columning of ITC. The Court found the mistake to be an inadvertent human error, not a deliberate attempt to obtain undue benefit, and that the petitioner's customers would be prejudiced by denial of legitimately available credit. In those circumstances and in the absence of an effective enabling mechanism under the statute, the Court exercised writ jurisdiction to prevent prejudice to assessees and directed that the petitioner be permitted to re submit the annexures to Form GSTR 3B with the correct distribution of credit between IGST, CGST and SGST, subject to compliance within the timeline ordered and enabling the portal to auto populate the corrected details. [Paras 11, 18, 19, 20, 21]Writ allowed; impugned rejection set aside and petitioner permitted to re submit annexures to Form GSTR 3B with corrected distribution of IGST/CGST/SGST within four weeks from date of uploading of this order and respondents directed to take the same on file and enable auto population in the GST portal.Final Conclusion: The High Court allowed the writ petition, set aside the refusal to permit amendment, and directed the petitioner to re submit corrected annexures to Form GSTR 3B for August 2017 to December 2017 within four weeks of uploading of the order, with respondents to accept the same and enable auto population so that the petitioner's customers are not deprived of legitimately available input tax credit. Issues Involved:1. Error in reporting credit in Form GSTR-1.2. Rejection of request for amendment of Form GSTR-1.3. Legal provisions governing the filing and rectification of GST returns.4. Petitioner's request for a mandamus to correct Form GSTR-1.5. Respondents' counter-arguments based on statutory timelines and provisions.Detailed Analysis:1. Error in Reporting Credit in Form GSTR-1:The petitioner, a registered dealer under the Tamil Nadu Goods and Service Tax Act, 2017, filed monthly returns for August 2017 to December 2017 in Form GSTR-3B, accompanied by annexures in Form GSTR-1. An inadvertent error occurred where intra-state sales were reported as inter-state sales, causing CGST and SGST credits to be reflected in the IGST column. This error was identified when customers found it difficult to avail the said credit.2. Rejection of Request for Amendment of Form GSTR-1:The petitioner requested an amendment of Form GSTR-1, which was rejected on 12.08.2019 as there was no provision to grant the amendment after 31.03.2019, the deadline extended by Notification 71/2018 for the period 2017-18. Consequently, the petitioner was unable to correct the error.3. Legal Provisions Governing the Filing and Rectification of GST Returns:The respondents cited Sections 37, 38, and 39 of the Act, which outline the procedures for furnishing details of outward and inward supplies and filing returns. Section 37(3) allows rectification of errors or omissions in returns, but no rectification is permitted after the filing of the return under Section 39 for the month of September following the end of the financial year or the relevant annual return, whichever is earlier. The last date for rectification in this case was 31.03.2019.4. Petitioner's Request for a Mandamus to Correct Form GSTR-1:The petitioner sought a mandamus directing the Assistant Commissioner to permit the correction of Form GSTR-1 for the period August 2017 to December 2017 and to redistribute the credit from the IGST column to the CGST and SGST fields. The petition was filed because the error was inadvertent and not intended to gain any benefit, and it caused difficulty for the petitioner's customers in availing the legitimate credit.5. Respondents' Counter-Arguments Based on Statutory Timelines and Provisions:The respondents argued that the petitioner approached the Officer only on 16.08.2019, well past the deadline of 31.03.2019 for rectification. They highlighted that any amendment of statutory timelines could only be done by the Government upon recommendation of the GST Council, as per Section 164 of the Act.Judgment:The court acknowledged that the petitioner committed an inadvertent human error and that the statutory forms (GSTR-2A and GSTR-1A) which could have helped identify the error in time, were not notified. The court emphasized that assessees should not be prejudiced from availing credit they are legitimately entitled to due to the absence of an enabling mechanism.The writ petition was allowed, and the impugned order was set aside. The petitioner was permitted to re-submit the annexures to Form GSTR-3B with the correct distribution of credit between IGST, SGST, and CGST within four weeks. The respondents were directed to take the corrected details on file and enable auto-population in the GST portal. No costs were awarded.