ITI Ltd. Vs Union of India And 6 Ors. (Gauhati High Court)
No Recovery on mismatch of GSTR-1 & 3B, as Self-Assessed Tax under Section 75(12) of the CGST Act: Gauhati HC
The Hon’ble Gauhati High Court (Kohima Bench) in M/s ITI Ltd. v. Union of India & Ors. set aside the order dated April 30, 2024 passed by the Assistant Commissioner, Central Goods and Services Tax (CGST), Dimapur Division under Section 73 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”) for Financial Year 2018–19 on two grounds: (i) that the mismatch between GSTR-1 and GSTR-3B arising from bona fide clerical errors cannot be mechanically treated as “self-assessed tax” under the Explanation to Section 75(12) of the CGST Act without following the due process prescribed under Rule 88C of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”); and (ii) that the denial of Input Tax Credit (“ITC”) on the ground of limitation under Section 16(4) of the CGST Act, stands overridden by the retrospective insertion of Section 16(5) vide the Finance (No. 2) Act, 2024.
Facts:
The Petitioner, M/s ITI Ltd., having its principal place of business at Dimapur, Nagaland, is engaged in the supply of goods and is a registered taxpayer under the CGST Act. For the Financial Year 2018–19, the Petitioner, while filing its GSTR-1 (statement of outward supplies), inadvertently reported the rate of tax as 18% against four invoices, whereas the actual applicable rate under the statute was 12%. Additionally, a credit note was wrongly reflected in GSTR-1. However, the correct details, i.e., the tax rate of 12% against the four invoices and the appropriate credit note adjustment, were duly reported in GSTR-3B filed under Section 39 of the CGST Act and were further reconciled in the Annual Return GSTR-9. The Petitioner had not rectified the GSTR-1 within the period permissible under Section 37(3) of the CGST Act.
