Telangana HC dismisses Plea seeking Rectification of GSTR-1 [Read Order]

A division bench of the Telangana High Court has dismissed a plea seeking rectification of the GSTR-1 relying on the Supreme Court decision in Bharti Airtel.

The Petitioner, Yokohama India Private Limited is a private limited company incorporated under the Companies Act, 1956. It is engaged in the business of manufacture and sale of passenger car tyres with a manufacturing facility in the State of Haryana. Following enactment of the Central Goods and Services Tax Act, 2017, the Petitioner has been submitting its GST returns timely. During the subject period, the petitioner wrongly mentioned the details of the distributor in form GSTR-1 form.

The petitioner contended that it was a bona fide mistake whereby the name of the distributor was mentioned as M/s. Hyderabad Service Station instead of M/s. Bade Miyan Wheels. Because of the aforesaid error, the distributor – M/s. Bade Miyan Wheels, is not able to utilise the input tax credit. However, the petitioner’s request to rectify the error was rejected by the GST authorities. the petitioners approached the High Court for relief.

Section 39 of the CGST Act as well as the TGST Act deals with furnishing of returns. As per sub-section (1) thereof, every registered person other than an input service distributor or a non-resident taxable person etc., for every calendar month or part thereof, furnish a return electronically of inward and outward supplies of goods and services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed. Sub-section (9) provides that if after furnishing such return a registered person discovers any omission or incorrect particulars other than as a result of scrutiny, audit etc., he shall rectify such omission or incorrect particulars in such form and in such manner as may be prescribed, subject to payment of interest etc.

Analyzing the provision, Chief Justice Ujjal Bhuyan and Justice C.V. Bhaskar Reddy observed that “the proviso says that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain or the actual date of furnishing of relevant annual return, whichever is earlier. In other words, such rectification could be carried out after the due date for furnishing of return up to the following month of September.”

Relying on the observation of Supreme Court in Bharati Airtel, the division bench has observed that “the law provides for rectification of errors and omissions in the specified manner. Beyond the statutorily prescribedperiod, an assessee cannot be permitted to carry out rectification which would inevitably affect obligations and liabilities of other stakeholders because of the cascading effect in the electronic records. Supreme Court considered the mechanism provided by Section 39(9) of the CGST Act and thereafter took the view that allowing the assessee to carry out rectification of errors and omissions beyond the statutorily prescribed period would lead to complete uncertainty and collapse of the tax administration. While delivering the above judgment, Supreme Court took note of the fact that GSTR-2A form for rectification of omissions or incorrect particulars became operational from September, 2018.”

Allowing relief to the petitioners, the High Court held that “That being the position, we are not inclined to accede to the request made by the petitioner as the issue is squarely covered by the decision of the Supreme Court in Bharti Airtel Ltd (supra).”

To Read the full text of the Order CLICK HERE

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