2024 (4) TMI 943 - HC - GST

Seeking rectification in Form GSTR-1 - limitation period - Works contract services - Input Tax Credit ( ITC ) - non-uploading of the invoices in GSTR-1 as B2B invoice - non-payment on the ground of financial distress due to COVID-19 - failed to deposit the tax liability - HELD THAT - The primary object behind the CGST Act is levy and collection of tax on intra State supply of goods or services and the matters connected therewith or incidental thereto. However it is understood that the CGST Act 2017 is a complete Code and the aggrieved party may loose certain benefits by operation of the provisions thereunder. Section 39 of the CGST Act provides that every registered person other than an input service distributor or a non-resident taxable person shall for every calendar month or part thereof furnish a return of inward and outward supply of goods and service. There are other requirements/ stipulations u/s 39 which every registered person/Firm is required to comply. Sub-section (2) to Section 16 lays down the conditions for availing of the Input Tax Credit by every registered person and one of the conditions is that the details of the invoice or debit note was furnished by supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified in Section 37. Under sub-section (1) to Section 37 the details of outward supplies of the goods and services or both affected during a tax period must be furnished on or before the tenth day of the month succeeding the tax period. Proviso to sub-section (3) provides that no rectification of error or omission in respect of the details furnished by the registered person of the outward supplies under sub-section (1) shall be allowed after the thirtieth day of November following the end of the financial year to which such details pertain. We have come to a conclusion that no relief can be granted to the petitioner-Firm. As to the prayers made in the writ petition there shall be issues regarding limitation and implied knowledge to the petitioner-Firm. According to Mr. Ankit Kanodia the learned Sr. counsel for the petitioner-Firm a notification was issued under which the time for filing the return was extended up to 7th February 2020 but then there are further periods of dispute starting from 2018-19 2020-21 2021-2022. In M/s Mahalaxmi Infra Contract Ltd. 2022 (11) TMI 323 - JHARKHAND HIGH COURT the mistake in the entries pertained to just one Tax Invoice and there was no dispute on facts. M/s Mahalaxmi Infra Contract Ltd. had made the entry in respect to the Tax Invoice dated 17th January 2019 in the GSTR-1 against the GSTIN of another entity which was not the recipient of the supply. Therefore the GSTR-2A return of the said entity reflected the same but it did not avail the Input Tax Credit for that entry. However the ECL which was the recipient of the supply against tax invoice dated 17th January 2019 availed the Input Tax Credit for such transaction but reversed the entry on realizing the mistake. This was the background in which the writ Court permitted M/s Mahalaxmi Infra Contract Ltd. rectification in the return filed by it. Whereas in the present case even payment of the entire liability was not made by the petitioner-Firm. Mr. Ankit Kanodia the learned Sr. counsel for the petitioner-Firm has made a statement in the Court that now the entire liability has since been paid by the petitioner-Firm. May be that is the correct factual aspect but for that reason the powers under Article 226 of the Constitution of India cannot be exercised ignoring the statutory regime under the CGST. The writ Court while exercising its jurisdiction and powers under Article 226 of the Constitution of India shall remain alive to the considerations whether the relief sought is barred by any law or the relief if granted shall be in the public interest. The writ Court shall also remain conscious that it has to adjudicate the prayer made in the main petition and should not travel beyond that merely because some statement of fact has been made or brought on record by filing supplementary affidavit. As we glance through the writ pleadings the petitioner-Firm did not provide correct and sufficient information s and this is not correct to say that the petitioner-Firm could know about the mistake sometime in 2022. Thus we are not inclined to entertain this writ petition which is accordingly dismissed.

Summary

Issues Involved:
1. Denial of Input Tax Credit (ITC) based on non-reflection in GSTR-2A.
2. Mechanism for rectification of GSTR-1 for financial years 2017-18 to 2021-22.
3. Deduction by Respondent 1 (ECL) from payments due to petitioner based on non-reflection of GST in GSTR-2A.
4. Applicability of Circular 183/15/2022-GST for financial years 2019-20 to 2021-22.
5. Denial of ITC where invoices are declared in the Annual Return and tax is discharged through FORM DRC-03.
6. Denial of substantive benefit of availing ITC due to procedural lapse.

Comprehensive Summary:

1. Denial of ITC Based on Non-Reflection in GSTR-2A:
The petitioner sought a declaration that ITC should not be denied merely because the invoice is not reflecting in GSTR-2A of the recipient when the tax has already been discharged by the supplier as per Section 16(2)(c) of the CGST Act, 2017. The court noted that the CGST Act requires the details of the invoice to be furnished by the supplier and communicated to the recipient, as specified in Section 37.

2. Mechanism for Rectification of GSTR-1:
The petitioner requested a mechanism to rectify its GSTR-1 for financial years 2017-18 to 2021-22 due to the absence of mechanisms for matching and amendment under Sections 42 and 43 of the CGST Act, 2017. The court highlighted that the statutory regime under the CGST Act specifies conditions and time limits for rectification, and the petitioner failed to comply with these statutory requirements.

3. Deduction by Respondent 1 (ECL):
The petitioner sought to restrain ECL from deducting amounts from future payments due to non-reflection of GST in GSTR-2A for the period 2017-18 to 2021-22. The court noted that ECL had already started deductions from the running bills of the petitioner on the grounds of non-deposit of tax liability amounting to Rs. 96,01,598/-. The court found that ECL's actions were in line with the statutory requirements and the petitioner's failure to rectify the errors timely.

4. Applicability of Circular 183/15/2022-GST:
The petitioner sought a declaration that Circular 183/15/2022-GST, which allows ITC to the recipient even when the invoice is not reflecting in FORM GSTR-2A for FY 2017-18 and 2018-19, should apply equally to financial years 2019-20, 2020-21, and 2021-22. The court did not find merit in extending the applicability of the circular beyond the specified financial years.

5. Denial of ITC Where Invoices are Declared in Annual Return:
The petitioner sought a declaration that ITC should not be denied where invoices have been declared by the supplier in its Annual Return and tax is discharged through FORM DRC-03. The court referred to the statutory provisions under Sections 16 and 37 of the CGST Act, which require strict compliance, and found that the petitioner did not meet these requirements.

6. Denial of Substantive Benefit of Availing ITC Due to Procedural Lapse:
The petitioner argued that the substantive benefit of availing ITC should not be denied due to procedural lapses. The court emphasized the importance of adhering to the statutory regime and the conditions laid down under the CGST Act for availing ITC. The court referred to the Supreme Court's decision in "Union of India Vs. Bharti Airtel Ltd., & Ors." (2022) 4 SCC 328, which highlighted the necessity of self-assessment and compliance with statutory requirements.

Conclusion:
The court dismissed the writ petition, stating that no relief could be granted to the petitioner due to non-compliance with the statutory regime under the CGST Act and the failure to rectify errors within the prescribed time limits. The court emphasized that the powers under Article 226 of the Constitution of India cannot be exercised to override statutory provisions.