GST | Case Laws: Where a clerical error in GSTR-1 return resulted in denial of Input Tax Credit to recipient-respondent without revenue loss, High Court permitted assessee to rectify error to ensure fairness, prioritizing legitimate claims over technicalities in genuine error cases
[2024] 159 taxmann.com 656 (Bombay)
HIGH COURT OF BOMBAY
NRB Bearings Ltd.
v.
Commissioner of State Tax
G.S. KULKARNI AND FIRDOSH P. POONIWALLA, JJ.
WRIT PETITION NO. 10771 OF 2023
FEBRUARY 14, 2024
Returns – Rectification of returns – Assessee made clerical error in its GSTR-1 return, involving incorrect invoice details – Error subsequently resulted in incorrect denial of Input Tax Credit to respondent no. 4 (Bajaj Auto Ltd.) – Assessee approached respondent authorities for permission to amend invoice details for rectifying error – Assessee received confirmation from job workers stating that they had not availed input tax credit – Assessee filed application before Central Jurisdictional Commissionerate regarding disallowance of credit to respondent no. 4 (Bajaj Auto Ltd.) due to mismatch between GSTR-3B and GSTR-2A – Assessee contended that there was no provision under CGST Act or Rules for rectification of bonafide errors made in GSTR-1 emphasizing that as there was no revenue implication, technicalities should not impede rectification –
HELD: Petition was allowed permitting assessee to rectify GSTR-1 – High court held that in cases of bonafide errors in filing returns where no loss of revenue occurs, technicalities should not prevent rectification All contentions of parties including legal contentions were kept open – Writ petition was accordingly disposed of – [Section 39, read with section 37 of Central Goods and Services Tax Act, 2017/Maharashtra Goods and Services Tax Act, 2017] [Para 7] [In favour of assessee]
Circulars and Notifications: Circular No. 02A of 2022 State of Maharashtra
The High Court’s decision to allow an assessee to rectify errors in GSTR-1, thereby enabling the denied Input Tax Credit (ITC) to the recipient without causing revenue loss, reflects a pragmatic approach towards GST compliance. This ruling emphasizes the importance of substance over procedure, recognizing that inadvertent errors should not obstruct the seamless flow of credit. It signals a shift towards a more business-friendly environment, reducing unnecessary litigation and encouraging timely compliance. By focusing on rectification without revenue loss, the judgment balances the need for strict compliance with the realities of business operations, fostering a more equitable and efficient tax system- JSPCO
