2022 (11) TMI 323 - HC - GST

Permission to carry out amendment in its GSTR-1 for the month of January 2019 in order to rectify its mistake of mentioning wrong GSTIN number against the invoices raised on Respondent no.5 - permission to respondent No.5 purchaser of the petitioner to avail ITC pertaining to the said transaction - HELD THAT - A bare perusal of provisions of Section 37 (3) would show that a registered person who has to furnish details of its outward supplies in the returns under sub section (1) for any tax period and which have remained unmatched under Section 42 and 43 (as it existed on the Statute prior to 01.10.2022), shall upon discovery of any error or omission there in 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 short payment of tax on account of such error or omission in the return to be furnished for such tax period. Such form GSTR-1 is required to be filed by the supplier furnishing details of its outward supplies, the details of the invoices raised by the petitioner and the tax paid by the recipient. In the instant case it appears that on account of an inadvertent error, the entry relating to Tax Invoice No. 01/2018- 19 dated 17th January 2019 could not be reflected in the GSTR-1 filed by the petitioner against the GSTIN of Eastern Coalfields Limited (GSTIN No. 20AAACE7590E3ZX). Instead it was quoted in the GSTIN of Respondent No.6 MIPL-NKAS (JV) GSTIN No.20AAEAM0162G1Z9 which was not the recipient of such supplies. Though, Respondent No.5 availed of such input tax credit bona fide believing that it had paid the taxes against such invoices, but on realizing the same reversed the entries in May 2022 as the same we are not reflected in his GSTR-2A return for the said period. The said entries, though reflected in the GSTR-2A of Respondent No. 6 inadvertently, were not availed by Respondent No.6 and rightly so, as it had not received any such supplies against the tax invoice in question - It is not in dispute that such incorrect entries in GSTR-1by Petitioner for the period January 2019 filed in March 2019 were not going to entail any additional tax impact. The rectification exercise would remain revenue neutral. Such TRAN I forms have been allowed to be filed online or manually in cases where TRAN-1 forms were not filed within the time prescribed by certain registered persons/ assessees. The judgment relied upon by the learned counsel for the petitioner are to that effect. The instant case does not present any additional tax impact, or loss of revenue for the State Exchequer and, in fact, such correction of relevant returns in case of the petitioner i.e.,GSTR-1, GSTR-2A in case of the respondent no. 5 and 6 would allow the respondent no.5 to rightly avail the ITC against the tax paid under Tax Invoice number 1/ 2018-19 dated 17th January 2019 issued by the petitioner, the interest of justice would be served if the petitioner is allowed to make the necessary correction in GSTR-1 form for January 2019 - petition disposed off.

Issues Involved:
1. Amendment of GSTR-1 to rectify GSTIN error.
2. Direction to allow ITC to Respondent No.5.
3. Legal provisions and procedural aspects under GST laws.
4. Technical and procedural challenges in rectifying GSTR-1.
5. Revenue neutrality and impact on state exchequer.
6. Legal precedents and judicial interpretations.

Detailed Analysis:

1. Amendment of GSTR-1 to Rectify GSTIN Error:
The petitioner, a mining company, sought to amend its GSTR-1 for January 2019 to correct an inadvertent error where the GSTIN of Respondent No.6 (MIPL-NKAS (JV)) was mentioned instead of Respondent No.5 (Eastern Coalfields Limited). This mistake was discovered in June 2021 during the final settlement of accounts. The court noted that the petitioner filed the return within the prescribed time but could not rectify the error due to the absence of a notified mechanism under Section 37(3) and related rules.

2. Direction to Allow ITC to Respondent No.5:
Respondent No.5 could not avail ITC due to the error in the GSTIN. The court directed that Respondent No.5 should be allowed to claim ITC as it had not misutilized the credit, and the mistake was bona fide. The Joint Commissioner of State Tax confirmed that Eastern Coalfields Limited deserved the ITC but could not avail it due to the error.

3. Legal Provisions and Procedural Aspects under GST Laws:
The court examined Sections 37, 38, 39, 42, and 43 of the CGST Act, along with Rules 59, 60, 70, and 71. It noted that the procedural mechanisms for rectifying such errors were not notified, which prevented the petitioner from correcting the mistake within the prescribed time. The amendments to Section 37(3) by the Finance Act 2022, effective from 01.10.2022, were also considered, but these were not applicable to the petitioner's case.

4. Technical and Procedural Challenges in Rectifying GSTR-1:
The GSTN portal did not allow amendments after the submission of GSTR-1. The court acknowledged that the petitioner could not rectify the error due to the absence of notified forms GSTR-2 and GSTR-1A, which would have facilitated the discovery and correction of such errors. The court directed GSTN to allow the petitioner to make the necessary corrections either online or manually.

5. Revenue Neutrality and Impact on State Exchequer:
The court emphasized that the correction of the error would be revenue-neutral and would not result in any additional tax liability or loss to the state exchequer. The correction would merely allow the rightful claim of ITC by Respondent No.5, which had already reversed the credit upon realizing the mistake.

6. Legal Precedents and Judicial Interpretations:
The court referred to several judgments from other High Courts, such as the cases of Nodal Officer, Jt. Commissioner, IT Grievance Vrs. Das Auto Centre, and others, which allowed similar corrections either electronically or manually. The court also cited Supreme Court judgments emphasizing that procedural laws should aid in delivering justice and not become a hindrance.

Conclusion:
The court allowed the petitioner to correct the GSTR-1 for January 2019 within eight weeks, either through the GSTN portal or manually if technical difficulties arise. It also left open the issue of Respondent No.5 claiming interest from the petitioner for the ITC reversed due to the error. The judgment ensures that procedural lapses do not prevent the rightful claim of ITC, maintaining the principles of justice and revenue neutrality.

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