Orient Traders Vs Deputy Commissioner of Commercial Taxes (Karnataka High Court)
The Hon’ble Karnataka High Court in M/s. Orient Traders v. the Deputy Commissioner of Commercial Taxes (Audit) [Writ Petition No. 2911 of 2022 (T-RES) dated December 16, 2022] has permitted the assessee to make the necessary changes to its Form GSTR 3B returns for the months of July, 2017 and March, 2018 and held that, allowing the assessee to make such changes, would not cause any prejudice to the Revenue Department nor would it upset the chain of credit under the Goods and Services Tax (“GST”) scheme. Further held that, the authorities must avoid a blinkered view while adjudicating/assessing the tax liability of a dealer under the Central Goods and Services Tax Act, 2017 (“the CGST Act”).
Facts:
M/s Orient Traders (“the Petitioner”) is engaged in the supply of machinery, mechanical appliances, parts and its erection, commissioning and installation.
The Petitioner submitted its GST Returns in Form GSTR-3B for the Financial Year 2017-18. The Revenue Department (“the Respondent”) issued a notice to the Petitioner on January 20, 2021 calling for books of accounts in order to conduct a Desk Audit and thereafter, an Audit Enquiry was issued on July 12, 2021 under Section 65(6) of the CGST Act read with Rule 101(4) of the Central Goods and Services Rules, 2017 (“the CGST Rules”).
While reviewing the returns, the Petitioner noticed that certain inadvertent errors and mistakes were made while filing its returns, wherein, the Petitioner had claimed the Input Tax Credit (“ITC”) under wrong column, and due to oversight and inadvertence the Petitioner had considered the import Integrated Goods and Services Tax (“IGST”) pertaining to July 2017 as local IGST and import IGST pertaining to March 2018 as local Central Goods and Services Tax (“CGST”) and State Goods and Services Tax (“SGST”). This error resulted in a mismatch between the Form GSTR-3B and Form GSTR-2A due to which the Respondent stated that the ITC which had accrued to the Petitioner was liable to be disallowed.
The Petitioner had sought permission to rectify these errors by submitting a revised input table on July 29, 2021 but the same was rejected by the Respondent. Thereafter, a Show Cause Notice was issued on January 17, 2022 (“the Impugned SCN”) by the Respondent under Section 73(1) of the CGST Act, proposing to disallow the ITC due to such errors.
Being aggrieved, this petition has been filed.
Issue:
Whether the Petitioner can be allowed to rectify its GST returns filed for the months of July, 2017 and March, 2018?
Held:
The Hon’ble Karnataka High Court in Writ Petition No. 2911 of 2022 (T-RES) held as under:
