2024 (7) TMI 1442 - HC - GST

Correction of inadvertent human error while filing a return - denial of ITC - time limitation - digital platform on which returns, applications of refund etc., are filed, by reason of sheer passage of time, having foreclosed the remedy to rectify the error occasioned - HELD THAT - Admittedly, the denial of input tax claim was only due to the wrong mentioning of GSTIN number; which has been established to be a bonafide mistake arising out of human error. The IDA who was the awarder and who deducted the tax and paid it to the department is also made a party, though subsequently, as the 8th respondent - There would be no loss caused to the State and if the refund is not effected there is every chance of the petitioner s company closing down, considering the huge refund which would not be granted to the petitioner, putting the very business in doldrums. This is a peculiar and special circumstance in which, even if there can be no facilitation of an online rectification, it should be done physically and the amounts eligible for refund disbursed. The quantum of input tax credit not specified, nor does it go by the admission of the 8th respondent that deductions as pointed out by the petitioner were made from the proceeds of the contract and paid up to the State Government. The assessing officer would be entitled to look into the specific deductions claimed and verify it with the returns filed by the 8th respondent; specifically the tax deductions made at the source and enable the claim of refund which is possible under law. The petitioner is directed to make a representation to the respondent authorities upon which, as directed by the High Court of Jharkhand at Ranchi, the respondent authority shall facilitate opening of the portal for a limited period, with due intimation given to the petitioner and if that is not possible allow the petitioner to make rectification on manual mode. Petition allowed.

Summary

Issues:
1. Correction of inadvertent human error in filing returns.
2. Limitation period for rectification.
3. Input tax credit claim denial due to wrong GSTIN number.
4. Digital platform limitations on rectification.
5. Precedent of Jharkhand High Court on similar matter.
6. Facilitation of correction through digital or manual mode.
7. Possibility of business closure due to refund denial.

Issue 1: Correction of Inadvertent Human Error in Filing Returns
The petitioner, a Private Limited Company engaged in construction work, sought rectification of an inadvertent error in filing returns for assessment years 2018-19, 2019-20, and 2020-21. The error involved showing the TDS number instead of the correct GST number of the awarder, leading to the denial of input tax credit. The petitioner explained the mistake and sought rectification for the earlier years similar to the rectification done for 2021-22.

Issue 2: Limitation Period for Rectification
The Department resisted the correction on grounds of limitation, citing the Act's provisions for claiming refunds within stipulated periods. The petitioner had not approached the authorities within the specified time for revising the returns, as argued by the Government Advocate and the ASG.

Issue 3: Input Tax Credit Claim Denial Due to Wrong GSTIN Number
The denial of input tax claim was solely due to the wrong mention of the GSTIN number, acknowledged as a bona fide human error. The IDA, the awarder who deducted and paid tax to the Department, confirmed the deductions made from the contract proceeds, supporting the petitioner's claim for input tax credit.

Issue 4: Digital Platform Limitations on Rectification
The Division Bench of the Jharkhand High Court addressed a similar matter involving an amendment to GSTR-1, emphasizing the need for correction without causing revenue prejudice. The reliance on digital modes for expeditious proceedings should not foreclose human intervention when necessary for rectification, ensuring smooth business processes and revenue collection.

Issue 5: Precedent of Jharkhand High Court on Similar Matter
The judgment referred to a Jharkhand High Court case where correction was facilitated for a wrong GSTIN number in invoices, underscoring the importance of rectification to prevent business disruptions and revenue loss.

Issue 6: Facilitation of Correction Through Digital or Manual Mode
The Court directed the petitioner to make a representation to the authorities, following the Jharkhand High Court's approach to facilitate rectification either through the digital portal or manual mode, ensuring the correction of the error caused by human oversight.

Issue 7: Possibility of Business Closure Due to Refund Denial
Acknowledging the potential business impact of refund denial on the petitioner's company, the Court emphasized the need to prevent business disruption and ensure the rightful disbursement of eligible refunds to avoid adverse consequences like business closure.

In conclusion, the High Court allowed the writ petition, directing the petitioner to represent to the authorities for rectification, emphasizing the importance of facilitating corrections to prevent undue hardships on businesses due to inadvertent errors in filing returns.