Central Board of Indirect Taxes And Customs Vs Aberdare Technologies Private Limited & Ors. (Supreme Court of India)
The Supreme Court dismissed the special leave petition filed by the Central Board of Indirect Taxes and Customs (CBIC) in the case against Aberdare Technologies Private Limited and others. The Court found no reason to interfere with the impugned judgment, as it was fair and did not result in any revenue loss. It emphasized the need for CBIC to reconsider the rigid timelines imposed for rectifying bonafide errors in GST filings. The Court highlighted that denying input tax credit (ITC) due to clerical mistakes places an undue financial burden on the purchaser, who is forced to pay taxes twice despite having already fulfilled their tax obligations. The Court further observed that human errors are natural and occur on both taxpayers’ and the Revenue’s side. Hence, allowing corrections in cases of genuine mistakes should be considered a fundamental business right, rather than being unreasonably restricted.
Additionally, the Supreme Court rejected the justification of software limitations as a reason for denying correction rights. It pointed out that compliance software should be designed to facilitate rectifications, rather than becoming an obstacle. The Court also questioned the validity of previous High Court decisions in Bar Code India Limited v. Union of India and Yokohama India Private Limited v. State of Telangana, stating that their legal rationale might need to be revisited in future cases. With this ruling, the Court has reinforced the principle that procedural rigidity should not lead to unfair financial burdens on taxpayers, and that IT systems should be adapted to support compliance rather than hinder it. All pending applications in the matter were disposed of accordingly. Read Bombay HC Judgment: Bombay HC permits GST return rectification after statutory deadline if no revenue loss
Also Read: SC upholds right of businesses to Rectify Arithmetical Errors in GST filings
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Delay condoned.
We are not inclined to interfere with the impugned judgment which is, in fact, just and fair, as there is no loss of revenue. Hence, the present special leave petition is dismissed.
The petitioner, Central Board of Indirect Taxes and Customs, must re-examine the provisions/timelines fixed for correcting the bonafide errors. Time lines should be realist as lapse/defect purchaser when benefit of tax paid is denied. Purchaser is not at fault, having paid the tax amount. He suffers because he is denied benefit of tax paid by him. Consequently, he has to make double payment. Human errors and mistakes are normal, and errors are also made by the Revenue. Right to correct mistakes in the nature of clerical or arithmetical error is a right that flows from right to do business and should not be denied unless there is a good justification and reason to deny benefit of correction. Software limitation itself cannot be a good justification, as software are meant ease compliance and can be configured. Therefore, we exercise our discretion and dismiss the special leave petition.
Decisions of the High Courts in Bar Code India Limited v. Union of India and others (2024) SCC OnLine P&H 13853 and Yokohama India Private Limited v. State of Telangana (2023) 108 GSTR 115.”, prima facie, do not lay down good law in this regard. Ratio therein may be examined in another case.
Pending application(s), if any, shall stand disposed of.
