2020 (10) TMI 1001 - HC - GST

Denial of Input Tax Credit - non-updation of the web portal of the GST Department - permission to rectify the form GSTR-3B by utilizing the available credits and/or permit the petitioner to file the necessary documents manually - section 49A 49B of the Central GST Act 2017 read with Rule 88A of the GST Rules, 2017 - HELD THAT - Upon hearing the counsel for the parties issue Notice returnable by 24-11-2020. Since the counsel for the respondents have already entered appearance no fresh Notice need be issued, however, sufficient copies of the writ petition be furnished to the learned standing counsel for the respondents.

Summary

Issues:
1. Rectification of input tax credit claims in GST portal for adjustment of State GST.
2. Automated adjustment of input tax credit with Central GST instead of State GST causing financial loss.
3. Petitioner's inability to avail benefits under the budgetary support scheme of 2017 due to portal issues.
4. Petitioner's plea for direction to rectify GSTR-3B claims and file necessary documents manually.

Analysis:
1. The petitioner filed returns in form GSTR-3B for a specific period but faced issues with the GST Department's web portal due to non-updation as required by the Central GST Act and GST Rules. The input tax credit claimed against State GST was automatically adjusted with Central GST, leading to financial loss as the budgetary scheme benefits applied only to Central GST, not State GST.

2. The petitioner sought to rectify the input tax credit claims and file additional claims for the budgetary support scheme of 2017, but the official web portal did not permit the rectifications. Consequently, a writ petition was filed requesting direction to rectify the GSTR-3B claims using available credits or filing necessary documents manually. The petitioner emphasized the financial losses incurred due to the automated adjustment in the portal.

3. The petitioner's counsel highlighted the application made in the web portal to rectify the input claims and avail benefits under the budgetary support scheme. However, the department did not pass necessary orders for rectification. The petitioner, aggrieved by the inaction, requested the court to direct the department to permit rectification and provide protection by not giving effect to the submitted GSTR-3B until rectification is allowed.

4. After hearing both parties, the court issued a notice returnable by a specific date and directed the department not to implement the GSTR-3B submitted by the petitioner until rectification is completed. The court emphasized the need for the department to obtain required instructions and provide adequate protection to the petitioner during the rectification process.

This detailed analysis of the judgment reflects the issues raised by the petitioner regarding input tax credit claims, automated adjustments in the GST portal, and the plea for rectification to avail benefits under the budgetary support scheme of 2017. The court's direction to the department not to implement the GSTR-3B until rectification is allowed showcases the judicial intervention to address the petitioner's grievances effectively.