2024 (1) TMI 1104 - HC - GST

GST Return Discrepancies: Inadvertent Error Allows Four-Week Window for Rectification Without Penalty

Anvita Associates Versus Union of India (thr. Revenue Secretary) & Ors.

The SC examined GST return discrepancies involving a logistics company. The court acknowledged an inadvertent error in filing returns and advised the ... Recovery of tax paid - Rectification of inadvertent error in filing of GSTR-1 - ITC could not have been disallowed to Mahindra Logistics on the ground of non-reflection of the invoices in FORM-GSTR-2A of Mahindra Logistics - HELD THAT:- There appears to be an inadvertent error on the part of the petitioner in filing return in FORM-GSTR-01 and due to such defective return being filed, the Petitioner contends that it is not in a position to recover the amount from Mahindra Logistics. The appropriate course of action for the Petitioner is to file an Application for rectification of the returns which were filed in FORM GSTR- 01 and, more particularly, considering the observations as made by the Division bench in STAR ENGINEERS (I) PVT. LTD. VERSUS UNION OF INDIA, STATE OF MAHARASHTRA AND DEPUTY COMMISSIONER OF STATE TAX-GST. [2023 (12) TMI 729 - BOMBAY HIGH COURT], and after an order is passed on the Rectification Application, the inter-se issue between the Petitioner and Mahindra Logistics can be taken up by the Petitioner and appropriate claim can be raised subject to the outcome of the Rectification Application. Petition is disposed off with liberty to the Petitioner to approach the department by filing a Rectification Application so as to seek rectification of FORM-GSTR-01 for the period in question, which is permitted to be filed either through online or manual means within a period of four weeks from today. Issues Involved:The issues involved in this case include discrepancies in GST returns filed by the Petitioner, denial of Input Tax Credit (ITC) to Mahindra Logistics due to non-disclosure of sales invoices, recovery of tax from Mahindra Logistics, and the Petitioner seeking relief through a legal petition.Details of the Judgment:Issue 1: Discrepancies in GST ReturnsThe Petitioner filed GST returns in FORM-GSTR-01, but inadvertently failed to disclose 14 sales invoices for the period of 2017-18. This led to a shortfall of Rs. 27,05,105 in the amount paid by Mahindra Logistics to the Petitioner. Despite attempts to rectify the error, Mahindra Logistics refused to make the payment, causing prejudice to the Petitioner.Issue 2: Denial of Input Tax Credit (ITC)Mahindra Logistics was denied ITC of Rs. 18,74,998 due to the non-reflection of invoices in FORM-GSTR-2A. The Petitioner contended that this denial was unjustified as the tax had already been paid as output tax, leading to financial loss for the Petitioner.Issue 3: Relief Sought through Legal PetitionThe Petitioner sought various reliefs through the legal petition, including quashing a proviso to Section 37 of the CGST and SGST Act, directing the GST Departments on invoking Section 16(2)(c) of the CGST Act, and compelling Mahindra Logistics to pay the outstanding amount of Rs. 27,05,105 with interest.Judgment Summary:The Court acknowledged the inadvertent error in the Petitioner's GST returns and advised filing a Rectification Application to rectify the errors in FORM-GSTR-01. Citing a previous decision, the Court emphasized the need for departmental recognition of genuine errors without loss of revenue. The Petitioner was granted liberty to approach the department for rectification within four weeks, with the outcome determining further actions against the department or Mahindra Logistics. All legal contentions were kept open for future consideration, and the Petition was disposed of without costs.