The Hon’ble Madras High Court in case of M/S.SUN DYE CHEM Vs. The Commissioner of State Tax, State of Tamil Nadu permitted the petitioner to resubmit the GST Returns
Brief Facts of the Case:- The petitioner is a partnership firm, a registered dealer, and files regular returns, computing the tax payable after setting off Input Tax Credit (ITC) as against the output tax liability. Monthly returns were filed for the period August 2017 to December 2017 in the GST portal in Form GSTR-3B.
The returns were accompanied by an annexure in Form GSTR-1 that reflected the total credit regarding the transactions – CGST, SGST, and IGST. There was, however, an inadvertent error in reporting the credit in Form GSTR-1 regarding the outward supplies and Intra-state sales had been erroneously reported as inter-state sales, as a result, the CGST and SGST credit was reflected in the IGST column.
The error was noticed by the petitioner when its customers brought to its notice the fact that the tax credit has been reflected in the IGST column instead of CGST/SGST columns posing a difficulty to the customers to avail the said credit.
Petitioner’s Contention:- The petitioner submitted a request for amendment of Form GSTR-1 that came to be rejected on 12.08.2019 on the ground that there was no provision to grant the amendment sought, in any event, not after 31.03.2019 as Notification 71/2018 had extended the time for submission of the amended GSTR-1 till 31.03.2019, for the period 2017-18. The petitioner was thus unable to correct the error.
The petitioner has therefore filed a writ petition seeking a mandamus directing the Assistant Commissioner (ST)/R1 to permit it to correct Form GSTR-1 for the period August 2017 to December 2017 and redistribute the credit available from the IGST column to the CGST and SGST fields.
Submission by the Respondents( Authorities): The respondents in their common counter refer to Sections 37, 38, and 39 relating to the furnishing of details of outward and inward supply and filing of returns, as well as the procedure to be followed in this regard.
They argue that the time for amendment of the details of outward supply stood extended only till 31.03.2019. The petitioner however approached the Officer only on 16.08.2019 seeking rectification of the errors occasioned during the period between October and December 2017. The officer was thus handicapped and could not grant the relief as sought for in the absence of an enabling provision.
Furthermore, any move to amend the timelines stipulated under the statute could only be done by the Government as per Section 164 of the Act, upon recommendation of the GST Council.
Summary of the Judgement: A registered person who files a return under Section 39(1) involving intra-State outward supply is to indicate the collection of taxes customer-wise in monthly return in Form GSTR-1 and the details of tax payment therein are auto-populated in Form GSTR -2-A of the buyers. Any mismatch between Form GSTR-1 and Form GSTR-2A is to be notified by the recipient by way of tabulation in Form GSTR-1A.
Admittedly, Forms in GSTR-2A and GSTR-1A are yet to be notified as of date. The statutory procedure contemplated for seamless availment is, as of date, unavailable.
Undoubtedly, the petitioner in this case has committed an error in the filing of the details relating to credit. What should have figured in the CGST/SGST column has inadvertently been reflected in the ISGT column. It is nobody’s case that the error was deliberate and intended to gain any benefit, and, because of the error, the customers of the petitioner will be denied credit which they claim to be legitimately entitled to because the credits stand reflected in the wrong column. It is for this purpose, to ensure that the suppliers do not lose the benefit of the credit, that the present writ petition has been filed.
Admittedly, the 31st of March 2019 was the last date by which the rectification of Form – GSTR 1 may be sought. However, and also admittedly, the Forms, by the filing of which the petitioner might have noticed the error and sought amendment, viz. GSTR-2A and GSTR-1A are yet to be notified. Had the requisite Forms been notified, the mismatch between the details of credit in the petitioner’s and the supplier’s returns might well have been noticed and appropriate and timely action taken. The error was noticed only later when the petitioners’ customers brought the same to the attention of the petitioner.
It is held that, in the absence of an enabling mechanism, the assessees should not be prejudiced from availing credit that they are otherwise legitimately entitled to. The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under the statute.
This writ petition is allowed and the impugned order set aside. The petitioner is permitted to re-submit the annexures to Form GSTR-3B with the correct distribution of credit between IGST, SGST, and CGST within four weeks from the date of uploading of this order, and the respondents shall take the same on file and enable the auto-population of the correct details in the GST portal.
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