2025 (9) TMI 1079 - HC - GST

Prima facie entitlement to refund for excess tax from GSTR-1 errors corrected in GSTR-3B and GSTR-9; appeal allowed

Tvl. Manavalakurichy Ire Manalalai Oppantha Thozhilalargal Nala Sangam, rep. by its President P. Suyambu. Versus The State Tax Officer, Nagercoil.

HC found prima facie that the petitioner may be entitled to a refund for tax paid in excess due to errors in GSTR-1 corrected in GSTR-3B and GSTR-9, but ... Refund of the tax paid in excess, after deducting the amount that was earlier confirmed - mistake while uploading relevant information in GSTR 1 for the tax period 2018-19 - HELD THAT:- Prima facie, the petitioner appears to have made out a case for refund, if the amount was paid in excess on account of the discrepancies in the informations uploaded by the petitioner in GSTR 1, which according to the petitioner stood corrected in GSTR 3B and in GSTR 9 in view of the Advisory Team of GSTN. However, the matter would require a detailed consideration by the Appellate Commissioner. Considering the same, this Writ Petition is disposed of by giving liberty to the petitioner to file an appeal challenging the impugned order, dated 16.04.2025 before the Appellate Commissioner within a period of thirty (30) days from the date of receipt of a copy of this order, who shall consider the same and dispose of the same on merits within a period of two (2) months thereafter. Petition disposed off. ISSUES PRESENTED AND CONSIDERED 1. Whether the petitioner is entitled to a refund of tax paid in excess where the alleged excess arose from mistakes in information uploaded in GSTR-1 for the 2018-19 period but corrections were made in GSTR-3B and in the annual return GSTR-9. 2. Whether the claim for refund (or correction of returns) can be rejected on the ground that the return in GSTR-9 was filed after the statutory/portal cutoff (three-year bar introduced by the Finance Act, 2023) and the effect of the Advisory of the GSTN regarding implementation of the three-year restriction. 3. Whether the Writ Court should entertain the merits of disputed tax liability/refund at the admission stage or remit the dispute for detailed consideration by the Appellate Commissioner, leaving open all contentious issues. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Entitlement to refund of tax paid in excess where mistakes in GSTR-1 were corrected in GSTR-3B and GSTR-9 Legal framework: The statutory and procedural scheme for GST returns and adjustments requires outward supplies to be declared in GSTR-1, liabilities to be discharged in GSTR-3B, and the annual reconciliation in GSTR-9; refunds or adjustments arise where tax has been paid in excess. Precedent treatment: No judicial precedents were cited or applied in the order. The Court proceeded on the factual and statutory matrix as presented. Interpretation and reasoning: The Court noted the petitioner's case that duplications/mistakes in GSTR-1 were rectified in GSTR-3B (monthly return) and again in the annual return GSTR-9, and that tax, interest and penalty earlier paid flowed from an order based on the uncorrected information. On a prima facie assessment the petitioner had made out a case that excess tax was paid and that a refund may therefore be due; the Court relied on the sequence of filings and the petitioner's submissions rather than resolving the factual and accounting intricacies at the admission stage. Ratio vs. Obiter: Ratio - The Court held that a prima facie case for refund exists where corrections in GSTR-3B and GSTR-9 show that tax was paid in excess due to earlier erroneous uploads in GSTR-1. Obiter - No definitive finding was made on the quantum or propriety of refund; those aspects were left for appellate consideration. Conclusion: The petitioner prima facie entitled to pursue a refund claim, but entitlement, computation and admissibility must be considered and decided by the Appellate Commissioner on merits. Issue 2 - Effect of three-year bar (Finance Act, 2023) and GSTN Advisory on late filing of GSTR-9 and its impact on refund/re-filing rights Legal framework: The Finance Act, 2023 introduced a temporal bar disallowing filing of specified GST returns after expiry of three years from the due date of furnishing the return (covering GSTR-1, GSTR-3B, GSTR-9, etc.), with implementation on the GST portal to be effected from July 2025 tax period as per the GSTN Advisory. Precedent treatment: No authority was cited to resolve conflicts between the statutory bar, portal implementation, and the consequences for pending or post facto filings; the Court confined itself to the advisory as placed on record. Interpretation and reasoning: The impugned order rejected the refund claim on the ground that GSTR-9 was filed after the last date (allegedly 31.12.2020) and therefore the claim was barred. The Court observed the existence of the Finance Act, 2023 amendment and the GSTN Advisory highlighting the three-year bar and its portal implementation timeline. However, the Court refrained from adjudicating the legal effect of the three-year restriction on the petitioner's specific claim, noting that the matter required detailed consideration by the Appellate Commissioner - particularly whether the statutory bar as amended, and its operational implementation on the portal, preclude the petitioner's entitlement or remedy. Ratio vs. Obiter: Obiter - The Court's references to the Finance Act, 2023 and the Advisory were for contextual and prima facie assessment only; no binding determination was made on the applicability of the three-year bar to the petitioner's refund claim. Conclusion: The applicability and effect of the three-year bar on the petitioner's retrospective correction and refund claim remain open questions to be adjudicated by the Appellate Commissioner; the Court did not uphold the bar as a conclusive basis to deny relief at the admission stage. Issue 3 - Appropriate forum and relief: remit to Appellate Commissioner versus decide in writ jurisdiction Legal framework: Principles of judicial restraint and administrative adjudication permit remittal of disputed tax assessments/refund claims to the appropriate appellate authority for detailed consideration, particularly where contested factual and accounting matters and statutory interpretation (including recent legislative amendments) are involved. Precedent treatment: The Court relied on exercise of judicial discretion - no specific precedents were applied in the order - to refrain from deciding the merits in writ jurisdiction at admission and instead afford the statutory appellate process. Interpretation and reasoning: Given the factual complexity (duplicate entries, reconciliations across multiple returns), the statutory amendment (three-year bar) and the need for detailed examination of records and computation, the Court exercised restraint. It granted liberty to the petitioner to file an appeal before the Appellate Commissioner within a specified time and directed the Appellate Commissioner to decide the appeal on merits within two months, leaving all issues open for canvass. The Court thus balanced the petitioner's prima facie case for refund with the administrative competence of the appellate authority to resolve technical and evidentiary disputes. Ratio vs. Obiter: Ratio - Where factual and technical issues and statutory changes require detailed inquiry, the Court will remit the matter to the appellate authority and will not determine the substantive refund claim at the admission stage. Obiter - Timelines imposed by the Court for filing and disposal are procedural directions tailored to the case. Conclusion: The appropriate course is remittal to the Appellate Commissioner for de novo consideration on merits; the writ is disposed of by granting liberty to appeal and directing expeditious adjudication, with all substantive issues left open. Overall Disposition and Practical Directions (Court's Conclusions) The Court concluded that a prima facie entitlement to refund on account of excess tax paid was made out but declined to decide the substantive entitlement or the effect of the Finance Act, 2023 three-year bar. Instead, the Court disposed of the writ by permitting the petitioner to appeal to the Appellate Commissioner within 30 days and directing the Appellate Commissioner to decide the appeal on merits within two months, leaving all issues open for consideration; no costs were awarded.