ESDS Software Solution Limited Vs Assistant Commissioner of Commercial Taxes

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

In this petition, petitioner seeks for the following reliefs:

“a) To issue order(s), directions, writ(s) in the nature of mandamus, directing Respondent Nos.1 to 5 to allow the petitioner access to the GST Portal in order to the rectify form GSTR-1 uploaded for September 2020 with respect to those invoices issued to Respondent No.06 so as to enable the respondent No.06 to take credit of the tax paid by the petitioner notwithstanding the time limit prescribed in Section 16(4) of the CGST Act.

b) Grant such other reliefs as this Hon’ble High Court may think fit including the cost of this writ petition.”

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that due to oversight and inadvertence, there was mismatch/discrepancy between the address shown in the invoice of the addressee at Annexure-C, which shows the address of the addressee/invoice as Uttar Pradesh, while in Form GSTR-1, it is inadvertently shown as Haryana, which is erroneous and request of the petitioner for permission to correct the same having not been considered by the respondent, petitioner is before this Court by way of the present petition.

4. In support of his submission, learned counsel for the petitioner places reliance upon the following judgments:

i) M/s. Sun Dye Chem Vs. The Assistant Commissioner and the Commissioner of State Tax – WP No.29676/2019

ii) Pentacle Plant Machineries Pvt. Ltd., Vs. Office of the GST Council and Ors., – W.P.No.1022/2020

iii) M/s Mahle Anand Termal Systems Pvt. Ltd., Vs. Union of India & Ors. – W.P.No.1174/2022

iv) Wipro Limited Vs. Assistant Commissioner of Central Taxes and Ors. – W.P.No.16175/2022

5. He also places reliance upon the Circular issued by the Central Government, Government of India, bearing No.183/15/2022-GST dated 27.12.2022 in support of his claim.

6. Per contra, learned AGA for the respondent submits that the aforesaid Circular is restricted/limited only for the assessment period 2017-18 and 2018-19 and said Circular would not apply to the petitioner in relation to the assessment period 2020-21 and as such, there is no merit in the petition and the same is liable to be dismissed.

7. In Wipro Limited (supra), this Court under identical circumstances extended the applicability of the Circular to the assessment year 2019-20 onwards by holding as under:

“In this petition, petitioner has sought for the following reliefs:-

“ a) To issue order(s), directions, writ(s) in the nature of mandamus, directing Respondent No.1 to allow the petitioner access to the GST portal in order to the rectify form GSTR-1 uploaded between FY 2017-18 and 2018-19 with respect to those invoices issued to the Recipient so as to enable the recipient to take credit of the tax paid by the petitioner notwithstanding the time limit prescribed in Section 16(4) of the CGST Act.

b) In the alternative, to issue, orders(s) directions, writ(s) in the nature of mandamus, directing Respondent No.1 to respond and consider the request made by the Petitioner vide letter dated: 06.09.2021 enclosed in Annexure-D.

c) To issues order(s), directions, writ(s), or any other relief as this Hon’ble Court deems it fit and proper in the facts and circumstance of the case in the interest of justice.”

2. Heard learned Senior counsel for the petitioner, learned counsel for respondents 1 to 3 – revenue, learned AGA for the 4^th respondent as well as learned counsel for the 5^th respondent and perused the material on record.

3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner invites my attention to the Circular bearing No.183/15/2022-GST dated 27.12.2022 in order to point out that the petitioner as well as the 5^th respondent would be entitled to the benefit of the directions issued in the said Circular with regard to the errors committed in the Invoices and the relevant forms of both the petitioner and 5th respondent and as such, the present petition deserves to be disposed of in terms of the said Circular.

4. Per contra, learned counsel for the respondents- revenue submits that the said Circular is not applicable insofar as the petitioner and 5^th respondent are concerned and that there is no merit in the petition and the same is liable to be dismissed.

5. In order to appreciate the rival contentions, it is necessary to extract the said Circular, which reads as under:-

Circular No. 183/15/2022-GST
 F. No. CBIC-20001/2/2022 – GST
 Government of India
 Ministry of Finance
 Department of Revenue
 Central Board of Indirect Taxes and Customs
 GST Policy Wing

******

New Delhi, Dated the 27^th December, 2022

To,

The Principal Chief Commissioners/ Chief Commissioners/ Principal

Commissioners/ Commissioners of Central Tax (All)/

The Principal Directors General/ Directors General (All)

Madam/Sir,

Subject: Clarification to deal with difference in Input Tax Credit (ITC) availed in FORM GSTR-3B as compared to that detailed in FORM GSTR-2A for FY 2017-18 and 2018-19 – reg.

Section 16 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as “CGST Act”) provides for eligibility and conditions for availing Input Tax Credit (ITC). During the initial period of implementation of GST, during the financial years 2017-18 and 2018-19, in many cases, the suppliers have failed to furnish the correct details of outward supplies in their FORM GSTR-1, which has led to certain deficiencies or discrepancies in FORM GSTR-2A of their recipients. However, the concerned recipients may have availed input tax credit on the said supplies in their returns in FORM GSTR-3B. The discrepancies between the amount of ITC availed by the registered persons in their returns in FORM GSTR-3B and the amount as available in their FORM GSTR-2A are being noticed by the tax officers during proceedings such as scrutiny/ audit/ investigation etc. due to such credit not flowing to FORM GSTR-2A of the said registered persons. Such discrepancies are considered by the tax officers as representing ineligible ITC availed by the registered persons, and are being flagged seeking explanation from the registered persons for such discrepancies and/or for reversal of such ineligible ITC.

2. It is mentioned that FORM GSTR-2A could not be made available to the taxpayers on the common portal during the initial stages of implementation of GST. Further, restrictions regarding availment of ITC by the registered persons upto certain specified limit beyond the ITC available as per FORM GSTR-2A were provided under rule 36(4) of Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) only with effect from 9th October 2019. However, the availability of ITC was subjected to restrictions and conditions specified in Section 16 of CGST Act from 1st July, 2017 itself. In view of this, various representations have been received from the trade as well as the tax authorities, seeking clarification regarding the manner of dealing with such discrepancies between the amount of ITC availed by the registered persons in their FORM GSTR-3B and the amount as available in their FORM GSTR-2A during FY 2017-18 and FY 2018-19.

3. In order to ensure uniformity in the implementation of the provisions of the law across the field formations, the Board, in exercise of its powers conferred under Section 168(1) of the CGST Act, hereby clarifies as follows;

difference in ITC claimed by the registered person in his return in FORM GSTR-3B and that available in FORM GSTR-2A may be handled by following the procedure provided in
 para 4 below.

procedure provided in
 para 4 below.

In addition, the proper officer of the actual
 recipient shall intimate the concerned jurisdictional tax authority of the registered person, whose GSTIN has been mentioned wrongly, that ITC on those transactions is required to be disallowed, if claimed by such recipients in their FORM GSTR-3B.

However, allowance  of ITC to the actual recipient shall not depend on the completion of the action by the tax authority of such registered person, whose GSTIN has been mentioned wrongly, and such action will be pursued as an
 independent action.

4. The proper officer shall first seek the details from the registered person regarding all the invoices on which ITC has been availed by the registered person in his FORM GSTR 3B but which are not reflecting in his FORM GSTR 2A. He shall then ascertain fulfillment of the following conditions of Section 16 of CGST Act in respect of the input tax credit availed on such invoices by the said registered person:

i) that he is in possession of a tax invoice or debit note issued by the supplier or such other tax paying documents;

ii) that he has received the goods or services or both;

iii) that he has made payment for the amount towards the value of supply, along with tax payable thereon, tot he supplier.

Besides, the proper officer shall also check whether any reversal of input tax credit is required to be made in accordance with section 17 or section 18 of CGST Act and also whether the said input tax credit has been availed within the time period specified under sub-section (4) of section 16 of CGST Act.

4.1 In order to verify the condition of clause (c) of sub­section (2) of Section 16 of CGST Act that tax on the said supply has been paid by the supplier, the following action may be taken by the proper officer:

4.1.1 In case, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year exceeds Rs 5 lakh, the proper officer shall ask the registered person to produce a certificate for the concerned supplier from the Chartered Accountant (CA) or the Cost Accountant (CMA), certifying that supplies in respect of the said invoices of supplier have actually been made by the supplier to the said registered person and the tax on such supplies has been paid by the said supplier in his return in FORM GSTR 3B. Certificate issued by CA or CMA shall contain UDIN. UDIN of the certificate issued by CAs can be verified from ICAI website https://udin.icai.org/search-udin and that issued by CMAs can be verified from ICMAI website https://eicmai.in/udin/VerifyUDIN.aspx .

4.1.2 In cases, where difference between the ITC claimed in FORM GSTR-3B and that available in FORM GSTR 2A of the registered person in respect of a supplier for the said financial year is upto Rs 5 lakh, the proper officer shall ask the claimant to produce a certificate from the concerned supplier to the effect that said supplies have actually been made by him to the said registered person and the tax on said supplies has been paid by the said supplier in his return in FORM GSTR 3B.

4.2 However, it may be noted that for the period FY 2017-18, as per proviso to section 16(4) of CGST Act, the aforesaid relaxations shall not be applicable to the claim of ITC made in the FORM GSTR-3B return filed after the due date of furnishing return for the month of September, 2018 till the due date of furnishing return for March, 2019, if supplier had not furnished details of the said supply in his FORM GSTR-1 till the due date of furnishing FORM GSTR 1 for the month of March, 2019.

5. It may also be noted that the clarifications given hereunder are case specific and are applicable to the bonafide errors committed in reporting during FY 2017-18 and 2018-19. Further, these guidelines are clarificatory in nature and may be applied as per the actual facts and circumstances of each case and shall not be used in the interpretation of the provisions of law.

6. These instructions will apply only to the ongoing proceedings in scrutiny/audit/ investigation, etc. for FY 2017-18 and 2018-19 and not to the completed proceedings. However, these instructions will apply in those cases for FY 2017-18 and 2018-19 where any adjudication or appeal proceedings are still pending.

7. Difficulty, if any, in the implementation of the above instructions may please be brought to the notice of the Board. Hindi version would follow.

Sanjay Mangal

Principal Commissioner (GST)

6. As rightly contended by the learned Senior counsel for the petitioner, a perusal of the Invoices at Annexure-C will indicate that while supplies are made by the petitioner to the 5^th respondent – M/s. ABB Global Industries and Services Private Limited, the GSTIN Number mentioned in the Invoices has been incorrectly shown as that of ABB India Limited, which is a completely different and independent juristic and legal entity from the 5th respondent herein. Under these circumstances, having regard to the language employed in the Circular, which contemplates rectification of the bonafide and inadvertent mistakes committed by the persons at the time of filing of Forms and submitting Returns, in the peculiar and special facts and circumstances of the instant case, I am of the considered opinion that the error committed by the petitioner in showing the wrong GSTIN number in the Invoices which was carried forward in the relevant Forms as that of ABB India Limited instead of the 5^th respondent i.e., M/s. ABB Global Industries and Services Private Limited, is clearly a bonafide error, which has occurred due to bonafide reasons, unavoidable circumstances, sufficient cause and consequently, the aforesaid Circular would be directly and squarely applicable to the facts of the instant case.

7. A perusal of the aforesaid Circular also indicates that the procedure to be followed in such cases has been prescribed at paragraph-4. In addition to the Circular, the petitioner has also filed an Affidavit satisfying the conditions stipulated in paragraph – 4.1.1 of the Circular, enclosing the details of the Invoices issued by the petitioner to the 5^th respondent. The 5^th respondent has filed statement of objections setting out the facts admitting, accepting and re-enforcing the claim of the petitioner with regard to the discrepancies / mismatch in mentioning of the GSTIN Number.

8. Under these circumstances, I am of the considered opinion that it would be just and proper to dispose of this petition directing the respondents 1 to 3 – revenue to follow the procedure prescribed in the Circular and apply the said Circular to the facts of the instant case of the petitioner, 5^th respondent and their transactions for the years 2017-18, 2018-19 and 2019-20. It is also necessary to state that though the Circular refers only to the years 2017-18 and 2018-19, since there are identical errors committed by the petitioner not only in respect of the assessment years 2017-18 and 2018-19 but also in relation to the assessment year 2019-20 also, I am of the view that by adopting a justice oriented approach, the petitioner would be entitled to the benefit of the Circular for the year 2019-20 also.

9. In the result, I pass the following:-

ORDER 

(i) Petition is hereby disposed of directing the respondents 1 to 3 to take necessary steps in relation to the petitioner and 5^th respondent for the assessment years 2017-18, 2018-19 and 2019-20 in terms of the Circular No. bearing No.183/15/2022-GST dated 27.12.2022.

(ii) The respondents 1 to 3 are hereby directed to consider the request made by the petitioner vide letter at Annexure-D dated 06.09.2021 and proceed further in accordance with law and in terms of the Circular dated 27.12.2022 as expeditiously as possible.”

8. So also under identical circumstances, Bombay High Court in the case of M/s. Railroad Logistics (India) Pvt. Ltd., Vs. The Union of India & Ors – W.P.(L)No.2429/2021 dated 15.01.2024 has held as under:

“4. The facts are :- The petitioner claims to be registered under the Central Goods and Service Tax Act 2017 on 1 July 2017. The petitioner contends that the petitioner made an inadvertent error in submitting the GST number of Mahindra & Mahindra (Rajasthan) in its form GSTR-1 instead of correct GST number of Mahindra & Mahindra (Orissa).

7. The contention as urged on behalf of the petitioner is to the effect that in the absence of enabling matching provision as prescribed in Section 42 and 43 of the CGST Act Rule 2017 (for short “CGST Act) the petitioner needs to be allowed to amend its form GSTR-1 for Financial year 2018-19. The petitioner has referred to the provisions of Section 37(3) and 38(5) to contend that the said provisions of the CGST Act cannot be an impediment for the petitioner to correct an inadvertent error and which would not cause any loss of revenue to the exchequer. It is also the petitioner’s contention that the statute nowhere restrict other State in claiming the credit of the eligible IGST as ultimately the tax has been collected by the Central Government on intra-State supplies.

8. Mr. Poddar, learned counsel for the petitioner in supporting such contentions has drawn our attention to the decision of this Court in Star Engineers India Pvt. Ltd. Vs. Union of India 1 wherein in similar circumstances a coordinate Bench of this Court of which one of us (G. S. Kulkarni, J.) was a member had granted the prayers of the petitioner therein, by directing the respondents to permit the petitioner to amend/rectify the Form GSTR-1 on the ground that there was an inadvertent error on the part of the petitioner which ought to have been permitted to be rectified. In rendering such decision, the Court had also considered the decisions of the different High Courts which were in M/s. Sun Dye Chem Vs. The Assistant Commissioner (ST) and Ors. of the Madras High Court, in Shiv Jyoti Construction Vs. The Chairperson, Central Board of Excise & Customs and Ors. of the Orissa High Court, and in Mahalaxmi Infra Contract Ltd. Vs. Goods and Services Tax Council and Ors. of the Jharkhand High Court. The Court also examined the provisions of Section 37, 38 and 39 of the Central Goods and Service Tax Act as also the Maharashtra Goods and Services Tax Act. It was held that the bar of limitation ought not to prevail when the issue was of a bona fide and inadvertent error on the part of the assessee, which should be permitted to be rectified, so as to also keep the record of the revenue clear from any mistakes which are bonafide and which have occurred in filing of the returns. The relevant observations in that regard are required to be observed which reads thus:-

“12. Having considered the statutory ambit of Section 37, 38 and 39, we are of the clear opinion that the provisions of sub­section (3) of Section 37 read with Section 38 and sub-sections (9) and (10) of Section 39 need to be purposively interpreted. We cannot read sub- section (3) of Section 37 to mean that the assessee would be prevented from placing the correct position and having accurate particulars in regard to all the details in the GST returns being filed by the assessee and that there would not be any scope for any bonafide, and inadvertent rectification / correction. This would pre­supposes that any inadvertent error which had occurred in filing of the returns, once is permitted to be rectified, any technicality not making a window for such rectification, ought not to defeat the provisions of sub-section (3) of Section 37 read with the provisions of sub­section (9) of Section 39 read de hors the provisos.

13. In our opinion, the proviso ought not to defeat the intention of the legislature as borne out on a bare reading of sub-section (3) of Section 37 and sub-section (9) of Section 39 in the category of cases when there is a bonafide and inadvertent error in furnishing any particulars in filing of returns, accompanied with the fact that there is no loss of revenue whatsoever in permitting the correction of such mistake. Any contrary interpretation of sub-section (3) of Section 37 read with sub-sections (9) and (10) of Section 39 would lead to absurdity and / or bring a regime that GST returns being maintained by the department having incorrect particulars become sacrosanct, which is not what is acceptable to the GST regime, wherein every aspect of the returns has a cascading effect. This is necessarily required to be borne in mind when considering the cases of inadvertent human errors creeping into the filing of GST returns.

14. Applying such principles to the facts of the present case, in our opinion, the State Tax Officer had all materials before it which went to show that there was nothing illegal and / or that what had happened at the end of the petitioner was that the invoices generated by the petitioner under the bill-to-ship-to-model for delivery of goods to third party vendors of BAL of which input tax credit for the invoices in question, were not availed by BAL due to error of credit not being reflected in the GSTR-1, as the petitioner had mentioned GSTIN of third party instead of GSTIN of BAL. This is also accepted by the State Tax Officer in the impugned communication.

16. We also find that the petitioner’s reliance on the decision as noted by us is quite apposite. In Sun Dye Chem Vs. Assistant Commissioner (supra), learned Single Judge of the Madras High Court considered a similar case wherein an error was committed by the petitioner in filing of details relating to credit. The error was to the effect that what should have figured in the CGST/SGST column was inadvertently reflected in the IGST column. It was not the case of the department that the error was deliberate and was intended to gain any undue benefit by the petitioner and in fact, by reason of the error, the customers of the petitioner were denied credit which they claim to be legitimately entitled to. It was also an error which was not initially noted by the petitioner, and on account of the error, the customers of the petitioner would be denied credit which they claimed to be legitimately entitled to, owing to the fact that the credit stands reflected in the wrong column. It is in these circumstances, after examining the relevant provisions which we have already discussed, the learned Single Judge observed that in the absence of an enabling mechanism, the assessee should not be prejudiced from availing credit which they are otherwise legitimately entitled to. The Court observed that an error committed by the petitioner is an inadvertent human error and the petitioner should not be prevented from rectifying the same and accordingly, allowed the petition.

17. A similar view was taken in the Pentacle Plant Machineries Pvt. Ltd. (supra) which also followed the decision in Sun Dye Chem (supra).

19. The Division Bench of the Jharkhand High Court in Mahalaxmi Infra Contract Ltd. (supra) has taken a similar view wherein the Division Bench after considering the rival contentions and the scheme of the legislation, allowed the petition considering the fact that there was no loss of revenue, if such rectification as prayed for by the petitioner was to be granted.

20. On the interpretation of the provisions as made by us and the common thread running through the decisions as noted above, it would lead us to observe that the GST regime as contemplated under the GST Law unlike the prior regime, has evolved a scheme which is largely based on the electronic domain.

21. We may also observe that the situation like in the present case, was also the situation in the proceedings before the different High Courts as noted by us above, wherein the errors of the assessee were inadvertent and bonafide. There was not an iota of an illegal gain being derived by the assessees. In fact, the scheme of the GST laws itself would contemplate correct data to be available in each and every return of tax, being filed by the assessees. Any incorrect particulars on the varied aspects touching the GST returns would have serious cascading effect, prejudicial not only to the assessee, but also to the third parties.”

9. Jyoti Chavan, learned Additional Government Pleader would not dispute that the present case also is a case of an inadvertent error on the part of the petitioner, wherein the tax has already been paid. She would also fairly state that the decision of this Court in Star Engineer India Pvt. Ltd. (supra) considered a similar situation.

10. Having heard learned counsel for the parties and having perused the record, we find ourselves in agreement with the contentions as raised on behalf of the petitioner that the petitioner in the present case had subsequently became aware of such mistakes in filing of its return, after notices were issued to Mahindra and Mahindra (Orissa). The notices were issued purely on the mistakes which had happened at the petitioner’s end in submitting the returns in form GSTR-01 in which the mismatch had occurred in the GST in numbers as noted hereinabove. It appears to be not in dispute that this is not a case where any loss of revenue would be caused to the department as already tax has been paid.

11. In these circumstances, we find that once a bona fide mistake of such nature has occurred, it needs to be rectified and more particularity, considering the observations as made by this Court in Star Engineer India Pvt. Ltd. (supra) as there is no loss of revenue, in the event such rectification is permitted to the petitioner.

12. We, accordingly, dispose of this petition by directing the respondents to permit the petitioner to amend and rectify form GSTR-1 for the period in question for financial year 2018-19, either through online or manual means, within a period of four weeks from the date a copy of this order is placed before authorities.

13. All contentions of the parties in that regard are expressly kept open.

14. Needless to observe that once the rectification takes place, respondent No.5 consequently would be entitled to claim Input Tax Credit.”

9. Bombay High Court in the case of Star Engineers (I) Pvt. Ltd., Vs. Union of India and Ors – W.P.No.15368/2023 dated 14.12.2023 has held as under:

“16. We also find that the petitioner’s reliance on the decision as noted by us is quite apposite. In Sun Dye Chem Vs. Assistant Commissioner (supra), learned Single Judge of the Madras High Court considered a similar case wherein an error was committed by the petitioner in filing of details relating to credit. The error was to the effect that what should have figured in the CGST/SGST column was inadvertently reflected in the IGST column. It was not the case of the department that the error was deliberate and was intended to gain any undue benefit by the petitioner and in fact, by reason of the error, the customers of the petitioner were denied credit which they claim to be legitimately entitled to. It was also an error which was not initially noted by the petitioner, and on account of the error, the customers of the petitioner would be denied credit which they claimed to be legitimately entitled to, owing to the fact that the credit stands reflected in the wrong column. It is in these circumstances, after examining the relevant provisions which we have already discussed, the learned Single Judge observed that in the absence of an enabling mechanism, the assessee should not be prejudiced from availing credit which they are otherwise legitimately entitled to. The Court observed that an error committed by the petitioner is an inadvertent human error and the petitioner should not be prevented from rectifying the same and accordingly, allowed the petition.

17. A similar view was taken in the Pentacle Plant Machineries Pvt. Ltd. (supra) which also followed the decision in Sun Dye Chem (supra).

18. We also note that the Division Bench of the Orissa High Court in Shiva Jyoti Construction (supra) was considering the case wherein the petitioner had prayed for a relief that the petitioner be permitted to rectify the GST returns filed in September 2017 and March 2018 which was filed inadvertently in Form-B2B instead of Form B2C as was wrongly filed under the GSTR-1 in order to get input tax credit benefit by a third party namely M/s. Odisha Construction Corporation Ltd. The last date for filing of return was 31 March 2019 and the rectification should have been carried out by 13 April 2019. The petitioner contended that an error came to be noticed after the said third party held up the running bill amount of the petitioner by informing it of the error on 21 January 2020. The petitioner contended that thereafter it was making a request to the department to correct the GSTR-1 form, but it was not allowed. It in these circumstances, the Court considering the fact that in permitting the petitioner to rectify such error, there was no loss of revenue whatsoever to the department, that it was only about the ITC benefit which was to be given to the customer of the petitioner, failing which a prejudice would be caused to the petitioner. The Division Bench referring to the decision in Sun Dye Chem (supra) granted the prayer of the petitioner for setting aside the letter of rejection as impugned in the proceedings and permitting the petitioner to resubmit the corrected returns in Form – B2B under GSTR-1 for the period in question.

19. The Division Bench of the Jharkhand High Court in Mahalaxmi Infra Contract Ltd. (supra) has taken a similar view wherein the Division Bench after considering the rival contentions and the scheme of the legislation, allowed the petition considering the fact that there was no loss of revenue, if such rectification as prayed for by the petitioner was to be granted.

20. On the interpretation of the provisions as made by us and the common thread running through the decisions as noted above, it would lead us to observe that the GST regime as contemplated under the GST Law unlike the prior regime, has evolved a scheme which is largely based on the electronic domain. The diversity, in which the traders and the assessees in our country function, with the limited expertise and resources they would have, cannot be overlooked, in the expectation the present regime would have in the traders / assessees complying with the provisions of the GST Laws. There are likely to be inadvertent and bonafide human errors, in the assessees adopting themselves to the new regime. For a system to be understood and operate perfectly, it certainly takes some time. The provisions of law are required to be alive to such considerations and it is for such purpose the substantive provisions of sub-section (3) of Section 37 and sub-section (9) of Section 39 minus the proviso, have permitted rectification of inadvertent errors.

21. We may also observe that the situation like in the present case, was also the situation in the proceedings before the different High Courts as noted by us above, wherein the errors of the assessee were inadvertent and bonafide. There was not an iota of an illegal gain being derived by the assessees. In fact, the scheme of the GST laws itself would contemplate correct data to be available in each and every return of tax, being filed by the assessees. Any incorrect particulars on the varied aspects touching the GST returns would have serious cascading effect, prejudicial not only to the assessee, but also to the third parties.

22. It is considering such object and the ground realities, the law would be required to be interpreted and applied by the Department. This necessarily would mean, that a bonafide, inadvertent error in furnishing details in a GST return needs to be recognized, and permitted to be corrected by the department, when in such cases the department is aware that there is no loss of revenue to the Government. Such freeplay in the joint requires an eminent recognition. The department needs to avoid unwarranted litigation on such issues, and make the system more assessee friendly. Such approach would also foster the interest of revenue in the collection of taxes.

23. In the aforesaid circumstances, we have no manner of doubt that the petition is required to be allowed. It is accordingly allowed by the following order:-

ORDER

(I) The respondents are directed to permit the petitioner to amend / rectify the Form GSTR-1 for the period July 2021, November 2021 and January 2022, either through Online or manual means within a period of four weeks from today.

(II) Petition stands disposed of in the above terms. No costs.”

10. Madras High Court in the case of M/s. Sun Dye Chem Vs. The Assistant Commissioner (ST) And Ors – W.P.29676/2019 dated 06.10.2020 has held as under:

“2. Monthly returns were filed for the period August 2017 to December 2017 in the GST portal in Form GSTR-3B. The returns were accompanied by annexures in Form GSTR-1 that reflected the total credit in regard to the transactions – CGST, SGST and IGST. There was however, an inadvertent error in reporting the credit in Form GSTR-1 in regard to the outward supplies and Intra-state sales had been erroneously reported as inter-state sales, as a result the CGST and SGST credit was reflected in the IGST column.

3. The error was noticed by the petitioner when its customers brought to its notice the fact that the tax credit has been reflected in the IGST column instead of CGST/SGST columns posing a difficulty to the customers to avail the said credit.

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5. The petitioner has therefore, come up with the present writ petition seeking a mandamus directing the Assistant Commissioner (ST)/R1 to permit it to correct Form GSTR-1 for the period August 2017 to December 2017 and redistribute the credit available from the IGST column to the CGST and SGST fields.

6. The respondents in their common counter, refer to Sections 37, 38 and 39 relating to the furnishing of details of outward and inward supply and filing of returns, as well as the procedure to be followed in this regard. They argue that the time for amendment of the details of outward supply stood extended only till 31.03.2019. The petitioner however approached the Officer only on 16.08.2019 seeking rectification of the errors occasioned during the period between October and December 2017. The officer was thus handicapped and could not grant the relief as sought for in the absence of an enabling provision. Furthermore, any move to amend the timelines stipulated under statute could only be done by the Government as per Section 164 of the Act, upon recommendation of the GST Council.

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18. Undoubtedly, the petitioner in this case has committed an error in filing of the details relating to credit. What should have figured in the CGST/SGST column has inadvertently been reflected in the ISGT column. It is nobody’s case that the error was deliberate and intended to gain any benefit, and in fact, by reason of the error, the customers of the petitioner will be denied credit which they claim to be legitimately entitled to, owing to the fact that the credits stands reflected in the wrong column. It is for this purpose, to ensure that the suppliers do not lose the benefit of the credit, that the present writ petition has been filed.

19. Admittedly, the 31st of March 2019 was the last date by which rectification of Form – GSTR 1 may be sought. However, and also admittedly, the Forms, by filing of which the petitioner might have noticed the error and sought amendment, viz. GSTR-2A and GSTR-1A are yet to be notified. Had the requisite Forms been notified, the mismatch between the details of credit in the petitioner’s and the supplier’s returns might well have been noticed and appropriate and timely action taken. The error was noticed only later when the petitioners’ customers brought the same to the attention of the petitioner.

20. In the absence of an enabling mechanism, I am of the view that assessees should not be prejudiced from availing credit that they are otherwise legitimately entitled to. The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under statute.

21. This writ petition is allowed and the impugned order set aside. The petitioner is permitted to re-submit the annexures to Form GSTR-3B with the correct distribution of credit between IGST, SGST and CGST within a period of four weeks from date of uploading of this order and the respondents shall take the same on file and enable the auto-population of the correct details in the GST portal. No costs.”

11. High Court of Orissa, Cuttack in the case of M/s. Shiva Jyoti Construction Vs. The Chairperson, Central Board of Excise & Customs and Ors – W.P(C) No.18216/2017 dated 12.01.2023 has held as under:

“3. It is the case of the Petitioner that the error came to be noticed after the OCCL held up the legitimate running bill amount of the Petitioner by informing it about the above error on 21st January, 2020. It is the case of the Petitioner that thereafter it has been making requests to the Opposite Parties to permit it to correct the GSTR-1 Forms but to no avail.

4. The stand taken by the Opposite Parties is that once the deadline for rectification of the Forms was crossed, then no further indulgence could be granted to the Petitioner.

5. The fact remains that by permitting the Petitioner to rectify the above error, there will be no loss whatsoever caused to the Opposite Parties. It is not as if that there will be any escapement of tax. This is only about the ITC benefit which in any event has to be given to the Petitioner. On the contrary, if it is not permitted, then the Petitioner will unnecessarily be prejudiced.

6. In similar circumstances, the Madras High Court in its order dated 6th October, 2020 in Writ Petition No.29676 of 2019 (M/s. SUN DYE CHEM v. The Assistant Commissioner ST) accepted the plea of the Petitioner and directed that the Petitioner in that case should be permitted to file the corrected form.

7. For the aforementioned reasons, the letters of rejection dated 19th June and 23rd September, 2020 are hereby set aside. The Court permits the Petitioner to resubmit the corrected Form-B2B under GSTR-1 for the aforementioned periods September, 2017 and March, 2018 and to enable the Petitioner to do so a direction is issued to the Opposite Parties to receive it manually. Once the corrected Forms are received manually, the Department will facilitate the uploading of those details in the web portal. The directions be carried out within a period of four weeks.”

12. High Court of Jharkhand at Ranchi in the case of M/s. Mahalaxmi Infra Contract Ltd., Vs. Goods and Services Tax Council and Ors – W.P.(T) No.2478/2021 dated 18.10.2022 has held as under:

“12. In the instant case it appears that on account of an inadvertent error, the entry relating to Tax Invoice No. 01/2018- 19 dated 17th January 2019 could not be reflected in the GSTR-1 filed by the petitioner against the GSTIN of Eastern Coalfields Limited (GSTIN No. 20AAACE7590E3ZX). Instead it was quoted in the GSTIN of Respondent No.6 MIPL-NKAS (JV) [GSTIN No.20AAEAM0162G1Z9] which was not the recipient of such supplies. Though, Respondent No.5 availed of such input tax credit bona fide believing that it had paid the taxes against such invoices, but on realizing the same reversed the entries in May 2022 as the same we are not reflected in his GSTR-2A return for the said period. The said entries, though reflected in the GSTR-2A of Respondent No. 6 inadvertently, were not availed by Respondent No.6 and rightly so, as it had not received any such supplies against the tax invoice in question. It further appears that the mechanism conceived under substituted Rule 59 specifically, sub rule (3) and (4) and Rule 60 (1) having not put into place by notification of form GSTR-2 and GSTR- 1A the petitioner could not discover such error in the absence of GSTR-2 being available to be filed by the recipient Respondent No.5. In the absence of notification of such forms GSTR-2 and GSTR-1A the Respondent No.6 could also not submit the relevant form GSTR-2 indicating such incorrect entries in its GSTR-2A due to incorrect entries in GSTR-1 by the petitioner. Since the mechanism provided for matching of details of inward supply furnished by a registered person or outward supply not being rightly declared by the supplier in his returns GSTR-1, not being place, such discrepancy could not be communicated to petitioner. The relevant form GST-MIS 1 and GST-MIS 2 as conceived under section 70 and 71 read with section 42 (prior to its omission under notification no.19/2022 and 18/2022 vide notification dated 28.09.2022 of CBIC) also having not been prescribed, the online mechanisms for discovery and correction of such mistake either by the supplier or by the recipient or both, could not take place. Petitioner therefore, appears to have a valid reason in not being able to rectify the entries in the GSTR-1 returns of March 2019 in the returns of September 2019 to be filed by 20th of October 2019 or the date of filing of the annual return, whichever is earlier. The error apparently came to the notice of the petitioner only during finalization of the accounts with respondent no.5 who had also by that time detected availment of ITC in lieu of the Tax Invoice No. 1/2018- 19 dated 17th January 2019, though not reflected in its GSTR-2. Petitioner approached this court immediately thereafter on 9th July 2022 seeking a direction upon the respondent GSTN to allow it to rectify returns. The detailed structured mechanism conceived under the JGST Act and the rules framed thereunder having not been put into place, the online portal did not permit such correction by any aggrieved registered person on its own. Therefore, the necessity for such an aggrieved registered person to approach this court under Article 226 of the Constitution of India. It is not in dispute that such incorrect entries in GSTR-1by Petitioner for the period January 2019 filed in March 2019 were not going to entail any additional tax impact. The rectification exercise would remain revenue neutral. Such TRAN I forms have been allowed to be filed online or manually in cases where TRAN-1 forms were not filed within the time prescribed by certain registered persons/ assessees. The judgment relied upon by the learned counsel for the petitioner are to that effect.

13. Having gone through the decisions cited in support by learned counsel for the petitioner and that the instant case does not present any additional tax impact, or loss of revenue for the State Exchequer and, in fact, such correction of relevant returns in case of the petitioner i.e.,GSTR-1, GSTR-2A in case of the respondent no. 5 and 6 would allow the respondent no.5 to rightly avail the ITC against the tax paid under Tax Invoice number 1/ 2018-19 dated 17th January 2019 issued by the petitioner, we are of the considered view that interest of justice would be served if the petitioner is allowed to make the necessary correction in GSTR-1 form for January 2019. Such correction, if does not entail technical difficulties by the GSTN, may be allowed to be made online by GSTN by opening the portal for a limited period upon due communication to the petitioner and respondent no.5 and 6 as it would reflect corresponding correction in their GSTR-2A form for the relevant period. If such a course is not possible to be done online for technical reasons, the GSTN could allow the petitioner to make such corrections through manual mode. Let such correction be allowed to be made within a period of 8 weeks from the date of receipt of this order.”

13. High Court of Orissa, Cuttack in the case of M/s. Y.B. Constructions Pvt. Ltd., Bhubaneswar Vs. Union of India and Ors – W.P.(C) No.12232/2021 dated 22.02.2023 has held as under:

“3. It is the case of the Petitioner that the error came to be noticed after the principal contractor held up the legitimate running bill amount of the Petitioner by informing it about the above error. It is the case of the Petitioner that thereafter it has been making requests to the Opposite Parties to permit it to correct the GSTR-1 Forms but to no avail.

4. The stand taken by the Opposite Parties is that once the deadline for rectification of the Forms was crossed, then no further indulgence could be granted to the Petitioner.

5. The fact remains that by permitting the Petitioner to rectify the above error, there will be no loss whatsoever caused to the Opposite Parties. It is not as if that there will be any escapement of tax. This is only about the ITC benefit which in any event has to be given to the Petitioner. On the contrary, if it is not permitted, then the Petitioner will unnecessarily be prejudiced.

6. In similar circumstances, the Madras High Court in its order dated 6th October, 2020 in Writ Petition No.29676 of 2019 (M/s. SUN DYE CHEM v. The Assistant Commissioner ST) accepted the plea of the Petitioner and directed that the Petitioner in that case should be permitted to file the corrected form.

7. For the aforementioned reasons, this Court permits the Petitioner to resubmit the corrected GSTR-1 for the aforementioned periods and to enable the Petitioner to do so, a direction is issued to the Opposite Parties to receive it manually. Once the corrected Forms are received manually, the Department will facilitate the uploading of those details in the web portal. The directions be carried out within a period of four weeks.”

14. High Court of Madras in the case of Pentacle Plant Machineries Pvt. Ltd., Vs. Office of GST Council and Ors W.P.No.1022/2020 dated 23.02.2021 has held as under:

“5. Had the requisite statutory Forms been notified, this error would have been captured in the GSTR-2 return, an online form, wherein the details of transactions contained in the GSTR-3 return would be auto-populated and any mismatch noted. Likewise, had the GSTR-1A return been notified, the mismatch might have been noticed at the end of the purchaser/recipient. However, neither Form GSTR-2 nor Form GSTR-1A have been notified till date. No doubt, the time for modification/amendment of a GSTR-3B return was extended till the 31st of March 2019, which benefit the petitioner did not avail since it was unaware that a mistake had crept into its original returns.

6. The revenue does not dispute the position that Forms GSTR-2 and 1A are yet to be notified. It also does not dispute the position that goods have reached the intended recipient. However, the credit claimed on the basis of accompanying invoices has been denied solely on account of the mismatch in GSTR number. It is only on 15.07.2019 when the recipient notified the petitioner of the rejection of the credit, seeking amendment of the return, and threatening legal action, that the petition came to be aware of the mismatch.

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8. To summarise, since Forms GSTR-1A and GSTR-2 (erroneously mentioned as GSTR-2A in para-17 of order dated 06.10.2020 in WP.No.29676 of 2019) are yet to be notified, the petitioner should not be mulcted with any liability on account of the bonafide, human error and the petitioner must be permitted to correct the same.

9. Taking the same view in this case as well, this writ petition is allowed. No costs. Both learned counsel for the respondents, Mr.Srinivas as well as Mr.Jaya Prathap, would concur on the position that it is for the Assessing Officer/R2 to give effect to this order, and a direction is thus issued to R2 to enable amendment to GSTR-1 with all consequences thereto, within a period of eight (8) weeks from today.”,

15. High Court of Bombay in the case of M/s. Mahle Anand Termal Systems Pvt. Ltd., Vs. Union of India & Ors – W.P.No.117/2022 has held as under:

“4. It is the case of the petitioner that there were three inadvertent errors in SAP wherein GSTN number remained to be corrected/updated from Andhra returns. The petitioner made various representations to the respondents to allow them to correct their GSTR, but of no avail. The representation is pending since 13th December, 2021.

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7. In view of the statement made by Mr.Mishra, learned counsel for the respondent nos.1 to 5, we direct the respondent no.2 to decide the said representation made by the petitioner within a period of eight weeks from today without fail in accordance with law after considering the applicability of the Circulars dated 26/26/2017- GST dated 29th December, 2017 and the judgment of the Madras High Court in case of Pentacle Plant Machineries Pvt. Ltd. (supra) and in case of Sun Dye Chem (supra). The order that would be passed by the respondent no.2 shall be communicated to the petitioner within one week from the date of passing of the order. If the representation made by the petitioner is allowed, the respondent no.2 shall permit the petitioner to carry out rectification in the GST number in question within one week from the date of the said order. If the order is adverse, the petitioner would be at liberty to file appropriate proceedings.”

16. High Court of Gujarat, Ahmedabad in the case of M/s. Screenotex Engineers Pvt. Ltd., Through its Director Hemantkumar Maneklal Patel Vs. Commissioner of CGST – SCA No.9577/2020 dated 30.03.2022 has held as under:

“9. We are not getting into the controversy whether there was any mistake on the part of the writ applicant No.1 so far as the GSTR-1 is concerned. The department permitted the writ applicant No.1 to amend the GSTR-1 with respect to all the nine invoices however, for some reason or the other, the writ applicant No.1 was in a position to amend only four such invoices. He is here before this Court as he is not able to amend the remaining five. There is a controversy whether those five invoices could have also been amended in the first instance or not.

10. Be that as it may, in the peculiar facts and circumstances of the case, we are inclined to grant one last opportunity to the writ applicant to get his GSTR-1 with respect to all the five invoices amended for one last time.

11. The Respondents are directed to process the request of the writ applicant No. 1 for carrying out amendment in its GSTR -1 returns pertaining to the respective months in 2019 in all the aforesaid writ petitions with respect to ticking of the ‘Deemed Export’ column in regard to the balance 5 invoices, which the writ applicant did not amend in the first request, however, the respondents are granted liberty to undertake necessary exercise to verify the same with the recipient as well;

12. The writ applicants shall undertake such exercise as is required post the amendment of the GSTR – 1 with respect to revised filing of any compliance under the Act; and

13. The Respondents are directed to process the request of the writ applicant for amendment without subjecting it to the restriction given in the proviso to Section 37 (3) of the CGST Act, 2017. Further, in case of any technical difficulty in executing the aforesaid directions, the Respondents including the GSTN Network shall, either make appropriate arrangements in that regard or shall accept the request for amendment of the writ applicant No. 1 in physical form for further process.”

17. In view of the aforesaid facts and circumstances and judgments relied upon by the learned counsel for the petitioner, I am of the considered opinion that the present petition deserves to be allowed and necessary directions are to be issued to the respondent in this regard.

18. In the result, I proceed to pass the following:

ORDER

i) Petition is hereby disposed of directing the respondent Nos.1 to 3 to take necessary steps in relation to the petitioner for the assessment year 2020-21 in terms of the Circular No. bearing No.183/15/2022-GST dated 27.12.2022.

(ii) The respondent Nos.1 to 3 are hereby directed to consider the request made by the petitioner vide letter at Annexures-J and K dated 04.11.2022 and 24.11.2022 and proceed further in accordance with law and in terms of the Circular dated 27.12.2022 as expeditiously as possible.