Assessee permitted to rectify its GSTR-1 for FY 17-18 & 18-19 to avail ITC benefits

Y. B. Constructions Pvt. Ltd. Vs Union of India (Orissa High Court)

The Hon’ble Orissa High Court in M/s. Y. B. Constructions Pvt. Ltd. v. Union of India and others [W.P.(C) No.12232 of 2021 dated February 22, 2023] has permitted the assessee to rectify the error of mentioning B2C instead of B2B in Form GSTR-1 at the time of filing of returns, holding that the assessee would be prejudiced if it is not allowed to avail the benefits of Input Tax Credit (“ITC”). Directed the Respondent to receive the corrected Form GSTR-1 manually and upload the details on the web portal within 4 weeks.

Facts:

M/s. Y. B. Constructions Pvt. Ltd. (“the Petitioner”) had committed a mistake while filing the GST Return under Form GSTR-1 for the period 2017-18 dated October 16, 2017 and November 25, 2017 and for the period 2018-19 dated January 30, 2018 and March 30, 2019, wherein, B2C instead of B2B was mentioned. The Petitioner sought to correct the error in order to receive the ITC benefit from the principal contractor. The last date for rectifying the return was April 13, 2019. The Revenue Department (“the Respondent”) stated that once the deadline for rectification of the Forms was crossed, then no further indulgence would be granted to the Petitioner.

Being aggrieved, this Petition has been filed.

The Petitioner contended that the error came to be noticed when the principal contractor held up the legitimate running bill amount of the Petitioner by informing it about the above error and thereafter it has been making requests to the Respondent to permit it to make the corrections.

Issue:

Whether the Petitioner be allowed to rectify the error committed in Form GSTR-1?

Held:

The Hon’ble Orrisa High Court in W.P.(C) No.12232 of 2021 held as under:

• Noted that, allowing the Petitioner to rectify the mistake in its GST Returns will not cause any loss to the Respondent, as there will be no escapement of tax, however, denying the request will prejudice the Petitioner, who is entitled to receive the ITC benefit.
• Relied on the judgment of the Hon’ble Madras High Court in the matter of M/s. Sun Dye Chem v. The Assistant Commissioner ST [Writ Petition No. 29676 of 2019 dated October 6, 2020], wherein, the plea of the assessee was accepted and it was permitted to file the corrected Form.
• Permitted the Petitioner to resubmit the corrected Form GSTR-1.
• Directed the Respondent to receive the corrected Form GSTR-1 manually and facilitate the uploading of the details on the web portal within 4 weeks.

Our Comments:

The above judgment brings up a significant issue concerning whether the assessee would be allowed to rectify the error while filing its Form GSTR-1.

In this regard, recently, in a similar matter, the Hon’ble Orissa High Court in M/s. Shiva Jyoti Construction v. The Chairperson, Central Board of Excise & Customs and others [W.P. (C) No. 18216 of 2017 dated January 12, 2023] had permitted the assessee to rectify its Form GSTR-1 filed for the months of September 2017 and March 2018, in order to claim ITC benefit by the recipient, wherein B2C was erroneously mentioned, instead of B2B. It was held that, the assessee will be unnecessarily prejudiced if it is not allowed to avail the benefits of ITC.

Further, the Hon’ble Karnataka High Court in M/s. Wipro Limited India v. the Assistant Commissioner of Central Taxes and Ors. [Writ Petition No. 16175 of 2022 (T-Res) dated January 6, 2023] had allowed the assessee to rectify the errors committed at the time of filing of Forms and submitting GST Returns for FY 2017-2020. It was held that, the error committed by the assessee in showing the wrong Goods and Services Tax Identification Number (“GSTIN”) in the invoices, which was carried forward in the relevant forms is a bonafide error, which has occurred due to bonafide reasons, unavoidable circumstances and sufficient cause. Hence, Circular No. 183/15/2022-GST dated December 27, 2022 (“the Circular”), which allows rectification of such bonafide and inadvertent mistakes, would be directly and squarely applicable.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

1. The Petitioner before this Court seeks a direction to the Opposite Parties to permit the Petitioner to rectify the GST Return filed for the periods 2017-18 and 2018-19 i.e. on 16^th October 2017, 25^th November 2017, 30^th January 2018 and 30^th March, 2019 in Form-B2B instead of B2C as was wrongly filed under GSTR-1 in order to get the Input Tax Credit (ITC) benefit by the principal contractor.

2. Admittedly, the last date of filing the return was 31^st March, 2019 and the date by which the rectification should have been carried out was 13^th April, 2019.

3. It is the case of the Petitioner that the error came to be noticed after the principal contractor held up the legitimate running bill amount of the Petitioner by informing it about the above error. It is the case of the Petitioner that thereafter it has been making requests to the Opposite Parties to permit it to correct the GSTR-1 Forms but to no avail.

4. The stand taken by the Opposite Parties is that once the deadline for rectification of the Forms was crossed, then no further indulgence could be granted to the Petitioner.

5. The fact remains that by permitting the Petitioner to rectify the above error, there will be no loss whatsoever caused to the Opposite Parties. It is not as if that there will be any escapement of tax. This is only about the ITC benefit which in any event has to be given to the Petitioner. On the contrary, if it is not permitted, then the Petitioner will unnecessarily be prejudiced.

6. In similar circumstances, the Madras High Court in its order dated 6^th October, 2020 in Writ Petition No.29676 of 2019 (M/s. SUN DYE CHEM v. The Assistant Commissioner ST) accepted the plea of the Petitioner and directed that the Petitioner in that case should be permitted to file the corrected form.

7. For the aforementioned reasons, this Court permits the Petitioner to resubmit the corrected GSTR-1 for the aforementioned periods and to enable the Petitioner to do so, a direction is issued to the Opposite Parties to receive it manually. Once the corrected Forms are received manually, the Department will facilitate the uploading of those details in the web portal. The directions be carried out within a period of four weeks.

8. The writ petition is disposed of with the above directions.

9. An urgent certified copy of this order be issued as per rules.

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