2024 (2) TMI 57 - HC - GST

Amendment of GSTR-1 returns allowed for FY 2018-19 despite GST number mismatches being bona fide mistakes

The Bombay HC allowed a petition seeking amendment of GSTR-1 returns for FY 2018-19 to enable Input Tax Credit claims. The court found that notices were ... Permissibility of rectification of GSTR-1 for bonafide inadvertent errors - entitlement to Input Tax Credit where tax has been paid despite return mismatch - purposive interpretation of return-filing provisions to permit correction where no loss of revenue - electronic GST regime and the need to maintain accurate return particulars to avoid cascading prejudicePermissibility of rectification of GSTR-1 for bonafide inadvertent errors - entitlement to Input Tax Credit where tax has been paid despite return mismatch - Petitioner permitted to amend/rectify Form GSTR-1 for financial year 2018-19 to correct an inadvertent GSTIN entry so that the recipient may claim Input Tax Credit. - HELD THAT: - The Court found that the petitioner had committed an inadvertent, bona fide error in furnishing the GSTIN in its GSTR-1 which led to a mismatch and consequent notices to its customer. The tax in question had already been paid and there was no loss of revenue to the exchequer. The Court applied a purposive construction of the return-filing provisions, following the reasoning in the coordinate decision of Star Engineers India Pvt. Ltd. and other High Court precedents such as Sun Dye Chem and Mahalaxmi Infra Contract Ltd. , that where an error is inadvertent and rectification causes no revenue loss, the bar of limitation in the return provisions should not be read to prevent correction. Given the electronic GST scheme and the cascading effect of incorrect particulars, permitting rectification preserves accurate records and does not prejudice the revenue. On this basis the Court directed respondents to allow amendment/rectification of Form GSTR-1 for the period in question by online or manual means within four weeks, and observed that upon such rectification the recipient would be entitled to claim the Input Tax Credit. [Paras 10, 11, 12, 14, 15]Direction issued permitting amendment/rectification of Form GSTR-1 for financial year 2018-19 to correct the inadvertent error, enabling the recipient to claim Input Tax Credit; respondents to allow amendment within four weeks.Final Conclusion: Writ petition disposed by directing respondents to permit the petitioner to amend/rectify Form GSTR-1 for financial year 2018-19 to correct the inadvertent GSTIN error, within four weeks, so that the recipient may claim the Input Tax Credit; all other contentions left open. Issues involved:The primary issue in this case is whether the petitioner should be permitted to amend its form GSTR-1 for the financial year 2018-19 to claim Input Tax Credit due to an inadvertent error in submitting the GST number. Another issue is whether the provisions of the Central Goods and Service Tax Act 2017 allow for rectification of such errors without causing any loss of revenue to the exchequer.Details of the Judgment:1. The petitioner sought relief under Article 226 of the Constitution of India to amend its form GSTR-1 for the period from April 2018 to March 2019, involving Input Tax Credit of Rs. 25,11,084.2. The petitioner, registered under the Central Goods and Service Tax Act 2017, made an inadvertent error in submitting the GST number of Mahindra & Mahindra (Rajasthan) instead of Mahindra & Mahindra (Orissa).3. The petitioner requested to amend the form GSTR-1 after Mahindra & Mahindra (Orissa) received notices due to the mismatch in GST numbers.4. The petitioner argued that Section 37(3) and 38(5) of the CGST Act do not prohibit correcting inadvertent errors that do not cause revenue loss, citing previous court decisions.5. The Court referred to a previous judgment where a similar error was rectified to prevent any loss of revenue.6. The Court held that the petitioner should be allowed to rectify the error in the form GSTR-1 for the financial year 2018-19 within four weeks to enable the client to claim Input Tax Credit.7. The judgment emphasized the importance of rectifying inadvertent errors to maintain accurate tax records and prevent any undue prejudice to the assessee or third parties.8. The decision highlighted that the GST regime requires correct data in tax returns to avoid cascading effects and ensure compliance with the law.9. The Court directed the respondents to permit the petitioner to rectify the form GSTR-1 to ensure the rightful claim of Input Tax Credit without causing any loss of revenue.10. The judgment concluded by stating that once the rectification is done, the client would be entitled to claim Input Tax Credit, and all contentions of the parties were kept open for further consideration.