RECTIFICATION OF GSTR - 1 FORM

[Mr. M. GOVINDARAJAN]

Rectification of returns

Section 37(3) of the Central Goods and Services Tax Act, 2017 (‘Act’ for short) provides that any registered person, who has furnished the details under sub-section (1) for any tax period and which have remained unmatched under section 42 or section 43 shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period. 

No rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier.

The rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September, 2018 till the due date for furnishing the details under sub-section (1) for the month of March, 2019 or for the quarter January, 2019 to March, 2019.

Section 52(4) of the Act provides that every electronic commerce operator who collects the amount shall furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected during a month, in such form and manner as may be prescribed, within 10 days after the end of such month.  The Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the statement for such class of registered persons as may be specified therein.

The explanation to Section 52(4), as inserted by Order No. 4/2018, dated 31.12.2018  provides that the due date for furnishing the said statement for the months of October, November and December, 2018 shall be the   31.01.2019.  The said due date was extended to 07.02.2019 vide Order No.02/2019, dated 01.02.2019. 

Section 52(6) of the Act provides that if any operator after furnishing a statement under sub-section (4) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the statement to be furnished for the month during which such omission or incorrect particulars are noticed, subject to payment of interest, as specified in section 50 (1).  No such rectification of any omission or incorrect particulars shall be allowed after the  30^th  day of November following the end of the financial year or the actual date of furnishing of the relevant annual statement, whichever is earlier.

In M/S. AKSHAYA BUILDING SOLUTION, REPRESENTED BY ITS PARTNER, MR. K. SENTHILKUMAR VERSUS THE ASSISTANT COMMISSIONER OF CGST & CENTRAL EXCISE, COIMBATORE – IV DIVISION, COIMBATORE - 2023 (12) TMI 511 - MADRAS HIGH COURT , the petitioners in the present writ petition have committed inadvertent error while filing GSTR - 2 form for the period August, 2017, November 2017, December 2017 and January 2018.  The input tax credit for these periods is Rs.23,39,613/-.  The Board issued a notification vide Order No. 2/2018-Central Tax, dated 11.12.2018.  In the said notification opportunities were granted to stakeholders to make corrections in the earlier returns if they found errors.  The petitioners were not aware of this notification.  The petitioner filed a writ petition before the High Court with the prayer to direct the Department to correct the GSTR - 1 form.  The High Court dismissed the writ petition filed by the petitioners with the liberty to the petitioner to file  a representation before the Department.

The petitioners filed a representation to the Department on 19.01.2021.  Since no reply has been received from the Department the petitioners filed the present writ petition before the High Court.  During the pendency of the writ petition the Department passed its order rejecting the request for rectification of the GSTR - 1.  The said order has also been challenged in the present writ petition.

The petitioner submitted the following before the High Court-

• The petitioner could not file the revised GSTR - 1 during the relevant period since the time extended by the Government got expired.
• Had they known about the notification dated 31.12.2018 certainly they would have filed the rectification application.
• The petitioner filed a representation before the Department.
• The impugned order has been passed without considering the representation of the petitioners.

The Department submitted the following before the High Court-

• Vide Order No. 2/2018, dated 31.12.2018 opportunities were provided to all the assessees to make corrections in the earlier returns if they found errors.
• The said facility was not availed by the petitioners.
• Therefore the impugned order was passed.
• The reasons provided by the petitioner in the affidavit are not genuine and cannot be relied on.

Therefore the Department prayed for the dismissal of the writ petition.

The High Court heard the submissions of the both the parties.  The High Court analyzed the facts of the case.  The High Court relied on its own judgment in DEEPA TRADERS VERSUS PRINCIPAL CHIEF COMMISSIONER OF GST & CENTRAL EXCISE CHENNAI, TAMIL NADU, SUPERINTENDENT OF GST, CENTRAL EXCISE, COIMBATORE GOODS AND SERVICES TAX NETWORK (GSTN) , NEW DELHI - 2023 (3) TMI 628 - MADRAS HIGH COURT.  The High Court observed thatin view in very similar circumstances as in the present case, in the case of  M/S. SUN DYE CHEM VERSUS THE ASSISTANT COMMISSIONER (ST) , THE COMMISSIONER OF STATE TAX - 2020 (11) TMI 108 - MADRAS HIGH COURT in which it was held that the petitioners must be permitted the benefit of rectification of errors where there is no mala fides attributed to the assessee.  The errors committed are clearly inadvertent and the rectification, would, in facts enable proper reporting of the turnover and input tax credit to enable claims to be made.  The aforesaid judgment has been accepted by the Department.  The High Court inclined to accept the prayer of the petitioner and issued mandamus to the Department to do the needful to enable uploading of the rectified GSTR - 1. 

The High Court has followed the ration in the above said case and directed the Department to permit the petitioner to upload the rectified GSTR - 1 within a period of 4 weeks from the date of receipt of a copy of this order.  The High Court further directed the Department to immediately upload the rectified GSTR - 1 within a period of one week from the date of uploading the rectified GSTR - 1.  Thereafter the Department provides to the petitioner to get input tax credit to the tune of Rs.23,39,613/-