Wrongly avail input

[NIRMAL Kashyap]

I have recently received a departmental notice under Section 74 for the fiscal year 2017-18, citing an inadvertent claim of CGST and SGST input instead of IGST. I promptly rectified this in my annual return; however, due to the absence of any purchases involving CGST and SGST input in the specified period, the correction was not reflected in the GSTR-3B.

Seeking your guidance on the best course of action to safeguard my case.

[KASTURI SETHI]

It is a human error and can be termed as procedural lapse. You have not caused any revenue loss to Govt. Write to Nodal Officer, GSTN appointed vide Board's circular No. to defreeze GSTR 3B already filed to rectify the mistake. Peruse Board's Circular No.39/13/2018-GST dated 3.4.18 conjointly with the judgement of High Court, Karnataka in the case of AT & S India Pvt. Ltd - 2019 (7) TMI 141 - KARNATAKA HIGH COURT

Read the whole judgement carefully. It can solve your problem.

[NIRMAL Kashyap]

Thank You Sir.

[Padmanathan KV]

Apart from the merits, also see on the limitation aspect. When was Sec. 74 notice issued? if it after 30th Sept 2023?

You should also challenge that sec 74 is not applicable in your case as it is not a case of fraud, suppression, willful misstatement but only a clerical error/ technical mistake while filing return. Therefore notice under section 73 should have been issued within 30th Sept 2023.

I do not see any justifiable reason why 74 notice should have been issued in this present case except that the Dept did not issue 73 notice within time. So pls give due importance to limitation ground as well, as sometimes this ground might help you at the higher forums.

[Ganeshan Kalyani]

The High Court of Kerala in the case of Mr. Chukkath Krishnan Praveen - 2023 (12) TMI 513 - KERALA HIGH COURT dated 08.12.2023 has considered the writ as rectification application for the correction of GSTR-3B.

AI Summary

Section 74 notice challenged where clerical input tax misclassification caused no revenue loss and GSTR-3B rectification sought.
A Section 74 notice alleges incorrect availment of CGST/SGST instead of IGST though the taxpayer corrected it in the annual return and no CGST/SGST purchases existed. The error is described as a procedural lapse causing no revenue loss; remedy recommended is to seek GSTN Nodal Officer action to defreeze GSTR 3B for rectification, while also contesting Section 74 applicability and advancing limitation-based and precedent-backed defenses, including reliance on Section 73 principles where appropriate.