A Division Bench of the Bombay High Court has granted the liberty to a dealer to amend the Goods and Services Tax ( GST ) Return – GSTR-1 to enable its client, Mahindra & Mahindra to claim Input Tax Credit ( ITC ).
The petitioner claimed to be registered under the Central Goods and Service Tax Act 2017 on 1 July 2017. The petitioner contended that it had made an inadvertent error in submitting the GST number of Mahindra & Mahindra ( Rajasthan ) in its form GSTR-1 instead of the correct GST number of Mahindra & Mahindra ( Orissa ).
On 10 November 2020, Mahindra & Mahindra ( Orissa ) received intimation in form DRC-01A on the ground of ‘MISMATCH IN GSTR-2A AND GSTR-3B for the financial year 2018-19.’ On 18 December 2020, the petitioner filed a letter to the GST Authorities, apprising them of the situation, with a request to allow the petitioner to amend its form GSTR-1 for the financial year 2018-19.
Thereafter, on 28 December 2020, Mahindra & Mahindra ( Orissa ) also received a show cause notice along with form DRC-01. In the wake of such notices being issued to the petitioner’s customers, the petitioner, on 16 January 2021, filed a reminder letter to the GST Authorities to look into the matter. However, no action was taken. In these circumstances, the petitioner approached the Court for the prayers as noted.
The contention, as urged on behalf of the petitioner, was that in the absence of enabling matching provision as prescribed in Section 42 and 43 of the CGST Act Rule 2017, the petitioner needed to be allowed to amend its form GSTR-1 for the financial year 2018-19.
The petitioner referred to the provisions of Section 37(3) and 38(5) to contend that those provisions of the CGST Act could not be an impediment for the petitioner to correct an inadvertent error, which would not cause any loss of revenue to the exchequer.
The counsel for the petitioner, in supporting such contentions, drew the Court’s attention to the decision of the Court in Star Engineers India Pvt. Ltd. Vs. Union of India, wherein, in similar circumstances, a coordinate Bench of the Court had granted the prayers of the petitioner therein, by directing the respondents to permit the petitioner to amend/rectify the Form GSTR-1 on the ground that there was an inadvertent error on the part of the petitioner which ought to have been permitted to be rectified. In rendering such a decision, the Court had also considered the decisions of different High Courts.
The Division Bench of the Bombay High Court observed that the GST regime, as contemplated under the GST Law, unlike the prior regime, has evolved a scheme which is largely based on the electronic domain. The Court further observed that the situation, like in the present case, was also the situation in the proceedings before different High Courts, wherein the errors of the assessee were inadvertent and bona fide. The Court held that any incorrect particulars on the varied aspects touching the GST returns would have serious cascading effects, prejudicial not only to the assessee but also to third parties.
Jyoti Chavan, Additional Government Pleader, did not dispute that the present case also is a case of an inadvertent error on the part of the petitioner, wherein the tax had already been paid. She also fairly stated that the decision of the Court in Star Engineer India Pvt. Ltd. considered a similar situation.
Having heard the counsel for the parties and having perused the record, the Court found itself in agreement with the contentions as raised on behalf of the petitioner that the petitioner, in the present case, had subsequently become aware of such mistakes in filing its return after notices were issued to Mahindra and Mahindra ( Orissa ).
The notices were issued purely on the mistakes which had happened at the petitioner’s end in submitting the returns in form GSTR-1 in which the mismatch had occurred in the GST in numbers.
It was observed that, “In these circumstances, we find that once a bona fide mistake of such nature has occurred, it needs to be rectified and more particularity, considering the observations as made by this Court in Star Engineer India Pvt. Ltd. ( supra ) as there is no loss of revenue, in the event such rectification is permitted to the petitioner.”
The Bench of Justice G S Kulkarni and Justice Firdosh P Pooniwalla thus directed the respondents to permit the petitioner to amend and rectify form GSTR-1 for the period in question for financial year 2018-19, either through online or manual means, within a period of four weeks.
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