GST rectification for bona fide filing errors allowed where credit remained traceable and revenue suffered no prejudice.

A purposive reading of GST return provisions allowed rectification of bona fide clerical or arithmetical mistakes in returns and invoice particulars, where the credit was otherwise available but reflected under the wrong head. The HC held that rigid enforcement of time-limit provisions should not defeat a genuine correction when no loss of revenue would result and the transaction trail remained verifiable. On those facts, the proposed denial of input tax credit was unjustified, and the impugned show-cause notice and consequential proceedings were not sustainable.

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Issues: Whether the petitioner was entitled to rectify the GST returns and corresponding invoice particulars for the relevant tax periods on account of bona fide inadvertent mistakes, and whether the impugned show-cause notice and consequential proceedings were liable to be quashed.

Analysis: The corrections arose from an inadvertent mismatch in the filing of GST returns during the first year of the GST regime, and the record showed that the tax credit was otherwise available and had only been reflected under the wrong head. The Court applied a purposive interpretation to the GST return provisions and held that bona fide clerical or arithmetical mistakes should not be defeated by a rigid reading of the time-limit provisions where no loss of revenue would result. It further found that the revenue itself had material to verify the actual transaction trail, and the proposed denial of credit was not justified on the facts. Reliance was placed on the line of authorities permitting rectification of bona fide errors where the correction does not prejudice the revenue or disrupt the credit chain.

Conclusion: The petitioner was entitled to the requested rectification, and the impugned notice and all further proceedings based on it were not sustainable.

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