TMI Blog2021 (3) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... E ILESH J. VORA MR. RAJ S TANNA(10010) FOR THE PETITIONER(S) NO. 1 DS AFF.NOT FILED (N)(11) FOR THE RESPONDENT(S) NO. 2 MR ANKIT SHAH(6371) FOR THE RESPONDENT(S) NO. 1,3,4 ORDER ( PER : HONOURABLE MR. JUSTICE J. B. PARDIWALA ) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs; (A) To admit and allow this petition; (B) To issue any appropriate writ, order or direction to the respondents permitting the petitioner to edit and upload actual entries in GSTR-3b for the Month of May- 2019 which is at the submission stage; (C ) To issue any appropriate writ, order, or direction to the respondents to modify the conditions and rules mentioned in the Annexure-A by which a registered person can edit any error if occurred during submitting/offsetting the ITC and before filing of the GSTR-3b return; (D) Pending hearing, admission, and/or final disposal of this petition, Your Lordships may be pleased to stay the late fees of ₹ 50/- daily being charged on the petitioner for non-filing of the said return for the said month i.e, May-2019 and also may be pleased to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne. By mistake, Deepak Process data uploaded in Deepak Print. We request to undo Offset of May 2019 GSTR3B. M/s. Deepak Print Proprietor. 2.3 It appears that the Nodal Officer at Rajkot did not even bother to give a formal reply or respond to the representation preferred by the writ applicant, referred to above. The writ applicant did try his best to take up the matter with the concerned authority, but ultimately had to come before this Court with the present writ application. 2.4 We take notice of the fact that in last two years, the respondents have not even thought fit to file a formal reply opposing the writ application. Even, as on date, time was prayed for, which this Court declined having regard to the facts of the present case. 2.5 We have heard Mr. Raj Tanna, the learned counsel appearing for the writ applicant and Mr. Utkarsh Sharma, the learned standing counsel appearing for the respondents. 2.6 The short point for our consideration is whether the writ applicant is entitled to seek rectification of Form GSTR-3B for the month of May, 2019. 2.7 The aforesaid issue is no longer res-integra in view of the decision of the Delhi High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. On a plain reading of the above provisions, it clearly emerges that the statutory scheme, as envisaged under the Act provided a facility for validation of monthly data through the IT System of the Government wherein the output of one dealer (Form GSTR-1), becomes the input of another dealer and gets auto-populated in Form GSTR- 2 (Inward Supplies). These details had to be electronically populated in Form GSTR-3 (Monthly Return) and tax had to be paid based on this return. The CGST Act and the CGST Rules as envisaged provided for verification, validation, modification and deletion of information for each period by interaction, over the IT System, between the supplier and the recipient so as to reflect the correct details pertaining to the tax period in that particular tax period itself (i.e. a month). In short, the CGST Act contemplated a self-policing system under which the authenticity of the information submitted in the returns by registered person is not only auto-populated but is verified by the supplier and confirmed by the recipient in the same month. The statutory provisions, therefore, provided not just for a procedure but a right and a facility to a registered perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Mr. Gulati that Form GSTR- 3B is filled in manually by each registered person and has no inbuilt checks and balances by which it can be ensured that the data uploaded by each registered person is accurate, verified and validated. Therefore, the design and scheme of the Act as envisioned has not been entirely put into operation as yet. In these circumstances we find merit in the submission of Mr. Gulati that if the statutorily prescribed form i.e. GSTR-2 3 had been operationalized by the Government - as was envisaged under the scheme of the Act, the Petitioner with reasonable certainty would have known the correct ITC available to it in the relevant period, and could have discharged its liability through ITC, instead of cash. We also find force in the submission of Mr. Gulati that since Form GSTR-2 2A were not operationalized - and because the systems of various suppliers were not fully geared up to deal with the change in the compliance mechanism, the Petitioner perhaps did not have the exact details of the input tax credit available for the initial three months i.e. the relevant period. In this situation, since Petitioner's ITC claim was based on estimation and the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not entirely remedy the situation for the Petitioner. For this reason, we cannot countenance the stand of the Respondents as stated in their additional affidavit. Respondents are unreasonably harping on the mistake on the part of the Petitioner for not utilizing of input tax credit on account of erroneous reporting. While the Respondents may be correct in stating that the case of the Petitioner may not qualify as payment of excess tax , but one cannot ignore the circumstances narrated above. In the first instance, the Petitioner has made payment of taxes in cash, only because the extent of input tax credit could not be computed. In terms of para 4 of Circular No. 26/26/2017-GST, adjustment of tax liability of input tax credit is permissible in subsequent months. For the months of September/October, 2018, the output liability for the said months was adjusted by following the procedure as provided in the said circular. However, Mr. Gulati has explained, the output tax liability has substantially reduced on account of low tariff in the telecom sector. As a result, the input tax credit which has accumulated on account of erroneous reporting, cannot be fully utilized in the prevail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d when the due dates for filing of FORM GSTR-1 and FORM GSTR-2 have been extended. After the return in FORM GSTR-3B has been furnished, the process of reconciliation between the information furnished in FORM GSTR-3B with that furnished in FORM GSTR-1 and FORM GST-2 would be carried out in accordance with the provisions of sub-rule (6) of rule 61 of the Rules. 4. x x x 5. x x x 6. Correction of erroneous details furnished in FORM GSTR- 3B: In case the registered person intends to amend any details furnished in FORM GSTR3B, it may be done in the FORM GSTR- 1 or FORM GSTR-2, as the case may be. For example, while preparing and furnishing the details in FORM GSTR-1, if the outward supplies have been under reported or excess reported in FORM GSTR-3B, the same maybe correctly reported in the FORM GSTR-1. Similarly, if the details of inward supplies or the eligible ITC have been reported less or more than what they should have been, the same maybe reported correctly in the FORM GSTR-2. This will get reflected in the revised output tax liability or eligible ITC, as the case may be, of the registered person. The details furnished in FORM GSTR-1 and FORM GSTR-2 will be au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y such error. 4. It is clarified that as return in FORM GSTR-3B do not contain provisions for reporting of differential figures for past month(s), the said figures may be reported on net basis alongwith the values for current month itself in appropriate tables i.e. Table No. 3.1, 3.2, 4 and 5, as the case may be. It may be noted that while making adjustment in the output tax liability or input tax credit, there can be no negative entries in the FORM GSTR-3B. The amount remaining for adjustment, if any, may be adjusted in the return(s) in FORM GSTR- 3B of subsequent month(s) and, in cases where such adjustment is not feasible, refund may be claimed. Where adjustments have been made in FORM GSTR-3B of multiple months, corresponding adjustments in FORM GSTR-1 should also preferably be made in the corresponding months. (emphasis supplied) 20. The earlier circular has not been rescinded by the impugned circular dated 29.12.2017, but only kept in abeyance. Be that as it may, we see no reason as to why the rectification/adjustment is being allowed in the month subsequent to when such errors relate, and the Respondents have restricted the mechanism of rectification to the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to fully enforce the scheme of the Act, and cannot take benefit of its own wrong of suspension of the Statutory Forms and deprive the rectification/amendment of the returns to reflect ITC pertaining to a tax period to which the return relates to. Petitioner has a substantive right to rectify/adjust the ITC for the period to which it relates. The rectification/ adjustment mechanism for the months subsequent to when the errors are noticed is contrary to the scheme of the Act. The Respondents cannot defeat this statutory right of the Petitioner by putting in a fetter by way of the impugned circular. Since the Respondents could not operationalize the statutory forms envisaged under the Act, resulting in depriving the Petitioner to accurately reconcile its input tax credit, the Respondents cannot today deprive the Petitioner of the benefits that would have accrued in favour of the Petitioner, if , such forms would have been enforced. The Petitioner, therefore, cannot be denied the benefit due to the fault of the Respondents. 21. In this regard, we may note the views of the Supreme Court in some of the judgments. In the case of Commissioner of Central Excise, Bolpur vs. Ratan Melti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ephones. The controversy arose because CBEC issued a circular being Circular No. 57/2003 dated June 2003 which defined the phrase W.P.(C) 6345/2018 Page 22 of 25 cellular phones and clarified that a telephone would not be considered as a cellular phone, merely because it works on cellular technology. The basic fact was that LSP 340 utilized cellular technology and was mobile, although within a limited range. Contrary views were taken by different High Courts and, therefore, the matter came up in appeal before the Supreme Court. The Court while deciding this question, held as under: 10. We are of the view that the reasoning of the Bombay Bench of the Tribunal as well as that of the Andhra Pradesh High Court must be affirmed and the decision of the Delhi Tribunal set aside insofar as it relates to the eligibility of LSP 340 to the benefit of the exemption notification. The Andhra Pradesh High Court was correct in coming to the conclusion that the Board had, in the impugned circular, predetermined the issue of common parlance that was a matter of evidence and should have been left to the Department to establish before the adjudicating authorities. The Bombay Bench was also cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the period in which the error has occurred. Accordingly, we 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 Respondents 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. In view of the fact that the final relief sought by the Petitioner has been granted and the petition is allowed, no separate order is required to be passed in the application seeking interim relief. Accordingly, the said application is disposed of as such. 3. Thus, in view of the aforesaid judgment, we hold that the writ applicant should be permitted to rectify the Form GSTR-3B in respect of the relevant period. The relief, as prayed for in Para-9(C) is also granted and the respondents shall act accordingly. 4. In such circumstances, referred to above, we direct the respondent No.4 that on filing of the rectified Form GSTR-3B, it shall, within a period of two weeks, verify the claim made therein and give effect to the same once verified. As the ..... 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