2023 (12) TMI 729 - HC - GST

Seeking approval to modify / amend FORM GSTR-1 for financial year 2021-2022 dated 11 September 2023 - Validity of communication dated 27 September 2023 issued by the respondent-Deputy Commissioner, State Tax. Petitioner has been informed that such a request for amendment of Form GSTR-1 cannot be approved considering that the matter is time barred and accordingly, the petitioner s application would stand rejected. HELD THAT - Having considered the statutory ambit of Section 37, 38 and 39, it is opined that the provisions of sub-section (3) of Section 37 read with Section 38 and sub-sections (9) and (10) of Section 39 need to be purposively interpreted - the sub-section (3) of Section 37 cannot be read 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 sub-section (9) of Section 39 read de hors the provisos. The proviso ought not to defeat the intention of the legislature as borne out on a bare reading of subsection (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. The State Tax officer ought to have granted the petitioner s request to rectify / amend the Form GSTR 1 for the period July 2021, November 2021 and January 2022, either through Online or manual means. 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. 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 - Petition allowed.

Summary

Issues Involved:

1. Challenge to Rejection of Amendment Request for Form GSTR-1.
2. Interpretation of GST Law Provisions for Rectification of Errors.
3. Consideration of Judicial Precedents Supporting Rectification.

Summary:

1. Challenge to Rejection of Amendment Request for Form GSTR-1:
The petitioner challenged a communication dated 27 September 2023 from the Deputy Commissioner of State Tax, rejecting the request to amend FORM GSTR-1 for the financial year 2021-2022, on the grounds that the matter was time-barred. The petitioner had inadvertently reported GSTINs of "Ship to" parties instead of the "Bill to" party, Bajaj Auto Limited (BAL), in Form GSTR-1 for July 2021, November 2021, and January 2022. Despite no revenue loss to the Government, the request was denied due to the statutory time limit for amendments.

2. Interpretation of GST Law Provisions for Rectification of Errors:
The court examined Sections 37, 38, and 39 of the CGST/MGST Act, 2017. Section 37(3) allows rectification of errors in outward supplies details, but prohibits amendments after the due date for the relevant financial year. Section 39(9) similarly allows rectification of returns but restricts it post a specific date. The court emphasized a purposive interpretation, suggesting that the legislative intent is to allow rectification of bona fide errors to ensure accurate GST returns, provided there is no revenue loss.

3. Consideration of Judicial Precedents Supporting Rectification:
The court referred to several judicial precedents, including the Madras High Court's decisions in M/s. Sun Dye Chem and Pentacle Plant Machineries Pvt. Ltd., and the Orissa High Court's decision in Shiva Jyoti Construction, which supported rectification of inadvertent errors in GST returns. These cases highlighted that technicalities should not prevent legitimate claims for Input Tax Credit (ITC) and that errors should be corrected to reflect the correct tax position.

Conclusion:
The court concluded that the petitioner should be allowed to rectify Form GSTR-1 for the specified periods, as there was no loss of revenue and the error was bona fide. The Deputy Commissioner was directed to permit the amendment either online or manually within four weeks. The petition was disposed of accordingly, with no costs.