Taxpayer allowed to correct B2C errors in GSTR-1, claim ITC as no revenue loss found

HC allowed the writ petition, holding that the taxpayer's erroneous reporting of certain supplies as B2C instead of B2B in GSTR-1 for September 2017 and March 2018 was a rectifiable technical mistake and that permitting correction would cause no revenue loss or tax evasion. The rejection letters issued by the tax authorities were quashed. HC directed the authorities to accept, manually, the corrected B2B details in GSTR-1 for the relevant periods, thereby enabling the taxpayer to obtain the corresponding ITC. The petition was accordingly disposed of.

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Issues:
Rectification of GST Return from Form-B2C to Form-B2B for Input Tax Credit benefit.

Analysis:
The Petitioner sought a direction to rectify the GST Return filed incorrectly in Form-B2C instead of Form-B2B for the period September 2017 and March 2018 to avail Input Tax Credit (ITC) benefit from M/s. Odisha Construction Corporation Limited (OCCL), the principal contractor. The deadline for filing the return was 31st March 2019, and the rectification deadline was 13th April 2019. The error was noticed after OCCL withheld the Petitioner's legitimate running bill amount and subsequent requests to the Opposite Parties for correction were unfruitful.

The Opposite Parties contended that no indulgence could be granted once the rectification deadline had passed. However, allowing the rectification would not cause any loss to the Opposite Parties as it pertained to ITC benefit, which must be provided to the Petitioner. Denying rectification would unfairly prejudice the Petitioner. Citing a similar case, the Madras High Court directed rectification in comparable circumstances.

Consequently, the rejection letters were set aside, and the Petitioner was permitted to resubmit the corrected Form-B2B for the specified periods. The Opposite Parties were directed to receive the corrected forms manually for subsequent uploading on the web portal, to be completed within four weeks. The writ petition was disposed of with these directions, and an urgent certified copy of the order was to be issued as per rules.

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