Clearmytax.in Editorial Team
The Delhi High Court in the writ petition filed by Bharti Airtel (W.P.(C) 6345/2018, CM APPL. 45505/2019) has allowed it to rectify the GSTR-3B returns for the period July to September, 2017. The brief facts of the case and decision is given below:
The paramount grievance of the Petitioner (Bharti Airtel) is that during the period from July, 2017 to September, 2017 , the Petitioner in its monthly GSTR- 3B recorded the ITC based on its estimate. As a result, when the Petitioner had to discharge the GST liability for the relevant period, the details of ITC available were not known and the Petitioner was compelled to discharge its tax liability in cash, although, actually ITC was available with it but was not reflected in the system on account of lack of data. The exact ITC available for the relevant period was discovered only later in the month October 2018, when the Government operationalized Form GSTR-2A for the past periods. Thereupon, precise details were computed and Petitioner realized that for the relevant period ITC had been under reported. The Petitioner alleges that there has been excess payment of taxes, by way of cash, to the tune of approximately Rs. 923 crores.
This was occasioned to a great degree due to non-operationalization of Forms GSTR-2A, GSTR-2 and GSTR-3 and the system related checks which could have forewarned the petitioner about the mistake. Moreover, since there were no checks on the Form GSTR-3B which was manually filled up by the Petitioner, the excess payment of tax went unnoticed. Petitioner now desires to correct its returns, but is being prevented from doing so, as there is no enabling statutory procedure implemented by the Government.
Respondent (Govt.) introduced the impugned circular No. 26/26/2017- GST dated 29.12.2017, whereby the earlier Circular No. 7/7/2017–GST has been kept in abeyance. Para 3 of the said Circular provides for amendment/ rectification of errors, para 4 imposes a restriction on the same and stipulates that the rectification of errors can be done concurrently in the month in which the error is noticed, and not in the month to which the data relates.
While arriving at the conclusion, the Hon’ble DHC took into account that the Govt. have absolutely failed in operationalizing the forms that were originally envisaged under the Act. The scheme of the CGST Act as introduced, contemplated validation and verification of data which was to be uploaded vide Form GSTR-2 & 3. However, in absence of such statutory forms being operationalized on account of lack of technical infrastructure, Form GSTR-3B was introduced and it was required to be filled in manually. There cannot be any dispute that Form GSTR-3B has been brought into operation instead of Form GSTR-2 and GSTR-3. This Form GSTR-3B as introduced by Rule 61 (5) being at variance with the other statutory provisions does not permit the data validation before it is uploaded.
As per the Respondents (Govt.), Form GSTR-3B is a return not in addition to GSTR-3, but in place of it, till such time GSTR-3 gets operationalized. Form GSTR-3B which has been brought into operation by virtue of Section 168 of the CGST Act, in comparison with Form GSTR-3 is a truncated version. Thus, DHC find merit in the submission of petitioner that with this change brought in by the Govt. the form originally contemplated got fundamentally altered. As a result, the checks and balances which were prescribed in the original forms got effaced and it cannot be ruled out that this possibly caused inaccuracies to creep in the data that is required to be filled in.
The Delhi High Court decided as under:
- The rectification of the return for that very month to which it relates is imperative and, accordingly, we read down para 4 of the impugned Circular No. 26/26/2017-GST dated 29.12.2017 to the extent that it restricts the rectification of Form GSTR-3B in respect of the period in which the error has occurred.
- Allow the present petition and permit the Petitioner to rectify Form GSTR-3B for the period to which the error relates, i.e. the relevant period from July, 2017 to September, 2017. We also direct the Govt. that on filing of the rectified Form GSTR-3B, they shall, within a period of two weeks, verify the claim made therein and give effect to the same once verified.
For ready reference the complete judgment is as under:
Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
