Businesses can Rectify GST Returns Even After Prescribed Due dates: Supreme Court directs CBIC to Re-examine Timelines Correcting Bonafide Errors [Read Judgement]

In a recent ruling, the Supreme Court has ruled that the businesses can rectify GST(Goods and Services Tax) returns even after prescribed due dates observing that human mistakes are normal. It has dismissed the petition filed by the Central Board of Indirect Taxes and Customs ( CBIC ).

An SLP was filed by the CBIC, challenging bonafide rectification of GST returns by businesses. According to the apex court, Central Board of Indirect Taxes and Customs, must re-examine the provisions/timelines fixed for correcting the bonafideerrors.

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A Bench comprising Chief Justice Sanjeev Khanna and Justice Sanjay Kumar observed that timelines for rectification must be realistic, as lapses or defects are often noticed only when the purchaser is denied the benefit of input tax credit (ITC), despite having paid the tax amount. The court stated that the purchaser, who is not at fault, ends up suffering by being compelled to make a double payment, solely due to clerical or system-related mistakes.

"Human errors and mistakes are normal, and errors are also made by the Revenue," the court noted, adding that the right to correct such mistakes especially of a clerical or arithmetical nature stems from the fundamental right to carry on business and should not be denied unless justified by compelling reasons.

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The court further stated that software limitations cannot be accepted as a legitimate ground to deny such corrections, as compliance systems are meant to facilitate ease of doing business and can be appropriately configured.

Rejecting the CBIC's plea, the court held that there was no revenue loss in allowing such rectifications and thus saw no reason to interfere with the impugned judgment, which it found to be "just and fair." The CBIC has been directed to re-examine the provisions and timelines currently in place for correcting bonafide errors in GST filings.

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To Read the full text of the Order CLICK HERE

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