In Union of India v. Bharti Airtel Ltd. & Ors. (2021) 36 J.K.Jain’s GST & VR 369 (SC), decided on 28.10.2021, while allowing the appeal of the Govt., the Hon’ble Supeme Court Set Aside the judgment and order of the High Court of Delhi in Bharti Airtel Limited v. Union Of India & Ors.(Delhi) (2020) 33 J.K.Jain’s GST & VR 361,which allowed rectification of   GSTR-­3B in respect of the period in which the error had occurred and allowed Refund of Rs.923 crore to  Bhatia Airtel Ltd. The Hon’ble Supeme Court held that;

i) The Circular No.26/26/2017­-GST dated 29.12.2017 & its para 4, is in tune with the provisions of the GST Act, 2017 and the Rules.

ii) Rectification of Return GSTR-3B from July, 2017 to Sept., 2017 is Permissible only as per laid down Mechanism u/s 39(9), CGST Act, 2017 read with Rule 61,CGST Rules, 2017.

iii) The registered person is not denied of the opportunity to rectify omission or incorrect particulars, which he could do in the return, per laid down Mechanism, to be furnished for the month or quarter in which such omission or incorrect particulars are noticed. Thus, it is not a case of denial of availment of ITC as such. It is only a postponement of availment of ITC. The ITC amount remains intact in the electronic credit ledger, which can be availed in the subsequent returns including the next financial year.

iv)It is a different matter that despite the availability of funds in the electronic credit ledger, the registered person opts to discharge output tax liability by paying cash, which having been exercised, cannot be reversed unless the Act and the Rules permit such reversal or swapping of the entries.

v) The assessee cannot be permitted to unilaterally carry out rectification of his returns submitted electronically in GSTR-­3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records. iv) The rectification in GSTR-­3B is only permissible as per Mechanism laid down in S.39(9), CGST Act, 2017 read with Rule 61, CGST Rules, 2017

GSTR-3B July, 2017 to Sept., 2017

2. It is a Landmark judgment of the Hon’ble Supeme Court, wherein the following important observation have also been laid down;

a) The High Court, however, did not enquire into the cardinal question as to whether the writ petitioner was required to be fully or wholly dependent on the auto generated information in the electronic common platform for discharging its obligation to pay output tax liability (OTL) for the relevant period between July and Sept., 2017. The answer is an emphatic No. In that, the writ petitioner being a registered person, was under a legal obligation to maintain books of accounts and records as per the provisions of the 2017 Act and Chapter VII of the 2017 Rules regarding the transactions in respect of which the OTL would occur. Even in the past (till recently up to the 2017 Act came into force), during the pre-GST regime, the writ petitioner (being registered person/assessee) had been maintaining such books of accounts and records and submitting returns on its own. No such auto ­populated electronic data was in vogue. It is the same pattern which had to be followed by the registered person in the post­-GST regime.

b) As per the scheme of the 2017 Act, it is noticed that registered person is obliged to do self-­assessment of ITC, reckon its eligibility to ITC and of OTL including the balance amount lying in cash or credit ledger primarily on the basis of his office record and books of accounts required to be statutorily preserved and updated from time to time. That he could do even without the common electronic portal as was being done in the past till recently pre-­GST regime. As regards liability to pay OTL, that is on the basis of the transactions effected during the relevant period giving rise to taxable event. The supply of goods and services becomes taxable in respect of which the registered person is obliged to maintain agreement, invoices/challans and books of accounts, which can be maintained manually/electronically. The common portal is only a facilitator to feed or retrieve such information and need not be the primary source for doing self-­assessment. The primary source is in the form of agreements, invoices/challans, receipts of the goods and services and books of accounts which are maintained by the assessee manually/ electronically. These are not within the control of the tax authorities. This was the arrangement even in the pre­-GST regime whilst discharging the obligation under the concerned legislation(s). The position is no different in the post-­GST regime, both in the matter of doing self-­assessment and regarding dealing with eligibility to ITC and OTL. Indeed, that self-­assessment and declarations would be any way subject to verification by the tax authorities. The role of tax authorities would come at the time of verification of the declarations and returns submitted/filed by the registered person.

3. The Hon’ble Supreme Court also distinguished the ratio decidendi of the following case laws;

AAP & Co.  v. Union of India (2019) 32 J.K.Jain’s GST & VR 1 (Guj) (para 41),

M/s. Panduranga Stone Crushers Vs. Union of India (Andhra Pradesh: Amaravati) (2019) TIOL-1975-HC-AP-GST (AP) (para 42),

Saji S. Proprietor, Adithya and Ambadi Traders v. The Commissioner, State GST Department (2019) 31 J.K.Jain’s GST & VR 144 (Ker)(para 42),

Adfert Technologies Pvt. Ltd. v. Union of India & Ors. (2019) 32 J.K.Jain’s GST & VR 485 (P&H)(para 43).

Siddharth Enterprises v. The Nodal Officer (2019) 32 J.K.Jain’s GST & VR 411 (Guj)(para 43),

MRF Ltd., Kottayam v. Asstt. Commissioner (Assessment), Sales Tax & Ors. (2006) 8 SCC 702 (SC)(para 44),

Krish Authomotors Pvt. Ltd. v. Union of India (2019) TIOL-2153-HC-DEL-GST (Delhi)(para 44),

Lease Plan India Pvt. Ltd. v. Government of National Capital Territory of Delhi decided on 13.9.2019 in W.P.(C) No. 3309/2019 (Delhi)(para 45),

Blue Bird Pure Pvt. Ltd. v. Union of India (2019) 32 J.K.Jain’s GST & VR 66 (Delhi)(para 45).

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