Karnataka HC allows changes in GSTR-3B for the months of July 2017 and March 2018 [Read Order]

The High Court (HC) of Karnataka, permits assessee to make necessary changes to GSTR 3- B for the months of July 2017 and March 2018 since it would not cause any prejudice to Revenue.

M/s Orient Traders, the petitioner filed the petition to direct Respondent No.1 to allow the Petitioner to rectify the GST returns filed for the months of July 2017 and March 2018. The petitioner is engaged in the supply of machinery, mechanical appliances, parts etc., as well their erection, commissioning and installation. The petitioner had duly submitted its GST Returns in Form GSTR 3-B for the Financial Year 2017-18 (“the FY”).

In response to the notice by respondent 1, the petitioner appeared and produced the books of accounts and records for verification. The 1st respondent issued an Audit Enquiry dated 12.07.2021 under Section 65(6) of the Karnataka Goods and Services Tax Act, 2017 (“KGST Act”) read with Rule 101(4) of the Karnataka Goods and Services Rules, 2017, calling upon the petitioner to file its response within seven days.  

The petitioner noticed that certain inadvertent errors and mistakes were made while filing its returns. The petitioner noticed that it had claimed Input Tax Credit (“ITC”) relating to imports under Integrated Goods and Services Tax, (“IGST’) in July 2017 and March 2018 due to oversight and inadvertence in Column No. 4A(5) instead of claiming it under Column No. 4A(1).

The error committed by the petitioner was of entering the figures in the wrong column resulted in a mismatch between the GSTR-3B and GSTR2A forms, due to which, the 1st respondent-DCCT observed in its audit report that the ITC which had accrued to the Petitioner was liable to be disallowed.  

It was noticed the Revenue has proposed to deny the ITC claimed by the petitioner, which will undoubtedly lead to a serious revenue loss. The authorities must avoid a blinkered view while adjudicating/assessing the tax liability of a dealer under the Act.

In the absence of a prescribed GSTR 2A for the relevant tax periods referred to the IGST import figures are reflected in the ICE GATE portal of the Customs Department for all the months except those in which the errors have been committed.

The respondents are aware of the actual figures and also that there is an error committed by the petitioner but has chosen to selectively ignore the IGST import amounts reflected in the ICE GATE portal for the tax periods in dispute, which is yet another circumstance to uphold the claim of the petitioner. 

A single member Justice S R Krishna Kumar held that the petitioner is entitled to the limited relief of being permitted to make the necessary changes to its GSTR 3-B returns for the months of July 2017 and March 2018, particularly, since doing so would not cause any prejudice to the respondents-Revenue.

To Read the full text of the Order CLICK HERE

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