2024 (12) TMI 1399 - HC - GST

Input tax credit - rectification of an inadvertent error in the GSTR-3B returns for the period 2018-19 - invocation of doctrine of necessity - HELD THAT - It would be in the interest of justice to remand the matter back to the respondent-Authority so as to enable the petitioner to file appropriate application for entitlement to take Input Tax Credit in the returns filed under Section 39 of the GST Act as the returns are already filed by the petitioner within the prescribed time limit of 30th November, 2021. The impugned Order-in-Original dated 04.04.2024 passed in Form GSTR DRC-07 is hereby quashed and set aside and the matter is remanded back to the respondent-Assessing Officer to pass afresh de-novo order after considering the application to be filed by the petitioner as per the provisions of Sections 16 (5) and 16 (6) of the GST Act in accordance with law - Petition disposed off by way of remand.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment are:

Whether the petitioner is entitled to rectify an inadvertent error in the GSTR-3B returns for the period 2018-19 under the provisions of the Gujarat Goods and Services Tax Act, 2017 (GST Act).
Whether the petitioner can avail of the input tax credit as per the amended Sections 16 (5) and 16 (6) of the GST Act, which were inserted by the Finance Act (No. 2), 2024.
Whether the impugned Order-in-Original dated 04.04.2024 should be set aside and the matter remanded for reconsideration by the respondent-Authority.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Rectification of Inadvertent Error in GSTR-3B Returns

Relevant legal framework and precedents: The petitioner sought rectification under Section 161 of the GST Act, which allows for correction of mistakes apparent from the record.
Court's interpretation and reasoning: The court acknowledged the petitioner's claim that the error was inadvertent and noted the absence of alternative remedies at the time due to the lack of amendments in the GST Act.
Key evidence and findings: The petitioner had attempted to reconcile the error by filing corrected returns in Form GSTR-9 and GSTR-3B for March 2020.
Application of law to facts: The court considered the petitioner's actions to rectify the error and the subsequent legislative amendments that provided a framework for such corrections.
Treatment of competing arguments: The respondents argued that the petitioner should apply under the newly inserted Sections 16 (5) and 16 (6), which the court found reasonable.
Conclusions: The court decided to remand the matter to allow the petitioner to apply for rectification under the amended provisions.

Issue 2: Entitlement to Input Tax Credit under Amended Sections 16 (5) and 16 (6)

Relevant legal framework and precedents: Sections 16 (5) and 16 (6) of the GST Act, inserted by the Finance Act (No. 2), 2024, provide for the entitlement to input tax credit under specific conditions.
Court's interpretation and reasoning: The court interpreted these provisions as applicable to the petitioner's case, allowing for input tax credit entitlement for returns filed by 30th November 2021.
Key evidence and findings: The petitioner's returns were filed within the prescribed time limit, making them eligible under the new provisions.
Application of law to facts: The court applied the amended provisions to the petitioner's situation, finding that the petitioner met the criteria for input tax credit entitlement.
Treatment of competing arguments: The court considered the respondents' willingness to process an application under the new sections, aligning with the petitioner's request for rectification.
Conclusions: The court concluded that the petitioner should be allowed to file an application under Sections 16 (5) and 16 (6) for input tax credit entitlement.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "In view of the above provisions, it would be in the interest of justice to remand the matter back to the respondent-Authority so as to enable the petitioner to file appropriate application for entitlement to take Input Tax Credit in the returns filed under Section 39 of the GST Act."
Core principles established: The judgment establishes that inadvertent errors in tax filings can be rectified under the GST Act's provisions if the legislative framework allows for such corrections. Moreover, taxpayers are entitled to input tax credit if they comply with the amended statutory provisions.
Final determinations on each issue: The court quashed the impugned Order-in-Original dated 04.04.2024 and remanded the matter for a fresh de-novo order by the respondent-Assessing Officer, allowing the petitioner to apply under Sections 16 (5) and 16 (6) of the GST Act.

The petition was disposed of with no orders as to cost, and the court directed that the exercise be completed within twelve weeks from the receipt of the order.

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