TMI Blog2022 (11) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... have remained unmatched under Section 42 and 43 (as it existed on the Statute prior to 01.10.2022), shall upon discovery of any error or omission there in rectify such error or omission in such manner as may be prescribed and shall pay the tax and interest, if any, in case there is short payment of tax on account of such error or omission in the return to be furnished for such tax period. Such form GSTR-1 is required to be filed by the supplier furnishing details of its outward supplies, the details of the invoices raised by the petitioner and the tax paid by the recipient. In the instant case it appears that on account of an inadvertent error, the entry relating to Tax Invoice No. 01/2018- 19 dated 17th January 2019 could not be reflected in the GSTR-1 filed by the petitioner against the GSTIN of Eastern Coalfields Limited (GSTIN No. 20AAACE7590E3ZX). Instead it was quoted in the GSTIN of Respondent No.6 MIPL-NKAS (JV) [GSTIN No.20AAEAM0162G1Z9] which was not the recipient of such supplies. Though, Respondent No.5 availed of such input tax credit bona fide believing that it had paid the taxes against such invoices, but on realizing the same reversed the entries in May 2022 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt GSTN to allow respondent No.5 purchaser of the petitioner to avail ITC pertaining to the said transaction. 2. Petitioner is a company bearing GSTIN number 20AAGCM4615E1Z1 engaged in business of mining. It also undertakes transportation of goods for central government undertakings, including the Respondent no.5 Eastern Coalfields Limited, Central Coal Fields Limited etc. within the State of Jharkhand. In the year 2018 petitioner s company was engaged by respondent no.5 bearing GSTIN No. 20AAACE7590E3ZX for providing services in relation to removal and re-handling of overburden from Dahernangi OC patch of Rajmahal Area. While filing its return in Form GSTR 1 for January 2019 in March 2019 i.e., within the time prescribed, according to the petitioner an inadvertent error was committed in the GSTIN of Eastern Coalfields Ltd. (GSTIN No. 20AAACE7590E3ZX ) as petitioner s employee quoted the GSTIN of one MIPL-NKAS (JV) (GSTIN No.20AAEAM0162G1Z9). Petitioner approach this Court as this mistake was realized by it only in June 2021 during final settlement of accounts with Respondent No.5, Eastern Coalfields Limited. When the matter was taken up on 23rd June 2022, upon hearing the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope for such error being corrected by the recipient in Form GSTR-2 which would lead to auto correction of GSTR-1A. The GSTR-1 form are in operation since 1st July 2017 but in absence of the notification of the procedure in terms of section 37 (3) or 38 (3) (4) and the relevant substituted rules 59 (3) (4) and 60 (1), petitioner has not been able to make correction in the error in the Form GSTR-1 submitted in March, 2019. 4. Learned counsel for the petitioner has referred to the counter affidavit of the respondent No.1 GST-council at para 6 as per which details filled in the GSTR-1 can be edited and saved multiple times by the taxpayer before the same is submitted and signed digitally. However, no changes can be made after the submission of GSTR-1. Learned counsel for the petitioner has also referred to the following judgments; 1. M/s. Sun Dye Chem Vs. The Commissioner of State Tax, reported in 2020-VIL-523-MAD (Madras High Court). 2. Pentachle Plant Machineries Pvt. Ltd. Vs. Office of the GST Council Others reported in 2022 U.P.T.C.[VOL.110]-442 (Madras High Court) 5. Mr. Rajesh Lala, learned counsel for the respondent No.5 has not disputed the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Respondent No. 6 would enter appearance by the date fixed and if so advised, file their counter-affidavit also specifically indicating as to whether they have availed ITC wrongly reflected in their GSTR-2A of March 2019 of the value as indicated hereinabove. The respondent No. 6 would also indicate as to whether they have been subjected to any show cause for suppression of purchases by the tax authorities. 12. Learned counsel for the petitioner would enclose the instant order with the Dasti Service. 3. By the instant order, MIPL-NKAS (JV) was impleaded as Respondent number 6 and asked to file counter affidavit, specifically stating whether they have availed ITC wrongly reflected in their GSTR- 2A of March 2019 of the value indicated here in above. It was also asked to indicate as to whether they have been subjected to any show-cause for suppression of purchases by the tax authorities. Respondent No.6 appeared on notice and filed a counter affidavit. The stand of the Respondent No.6 as reflected in its counter affidavit are incorporated in the order dated 20th July 2022. It denied having availed such ITC wrongly reflected in its GSTR-2A. By the said order, upon cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling revised GSTR-1 for January 2019 filed in March 2019. Time limit for doing so under Section 37(3) was up to 20th October 2019. It is evident that any such correction, if allowed in GSTR-1 of the petitioner, would lead to correction by auto-population in GSTR-2A of respondent no.5. Under the provisions of Section 38(1) even respondent no.5 was required to undertake due diligence and validate entries made in the GSTR-2A and to check whether the relevant invoice is reflected in that or not. GSTR-3B of respondent no.5 is not on record to show whether it had claimed ITC of equivalent value paid by them in lieu of the tax invoice no.01/2018-19 dated 17th January 2019 issued by the petitioner. Any such correction in GSTR-1 by the petitioner would also entail auto-correction in the GSTR-2A of respondent no.6. The responsibility of filing proper forms is not only upon the supplier but also upon the purchasers and respondent no.6 in whose GSTR-2A the inadmissible ITC is reflected for the said period. Apparently, all these three parties have not undertaken due diligence at the time of filing of returns or GSTR-1 or checked the entries in GSTR-2A. Petitioner is assessed under respondent no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of written submission of 5 petitioner and respondent no. 5 and 6, it is concluded that M/S Mahalaxmi Infra Contract Ltd. while filing the returns in GSTR-I for the month of Jan, 2019, committed mistake by uploading the details of the invoices quoting the GSTIN of M/S MIPL-NKAS(JV) instead of M/S Eastern Coalfields Ltd. M/S Eastern Coalfields Ltd. utilised the input tax credit as per books of accounts despite the input tax credit was not reflecting in auto populated GSTR-2A. Later on realising the mistake it reversed input tax credit in the month of May, 2022 through GSTR3B returns. The input tax credit in auto populated GSTR-2A was available for M/S MIPL-NKAS(JV), but it did not utilise the same. Hence M/S Eastern Coalfields Ltd. deserved the input tax credit but due to mistake in filing of GSTR-I by M/S Mahalaxmi Infra Contract Ltd. for the month of Jan, 2019, M/S Eastern Coalfields Ltd. could not get the benefits of input tax credit. Since the GSTN portal does not allow amendments of the returns after filing of annual return GSTR-9, hence the only recourse left is that GSTN portal allows M/S Mahalaxmi Infra Contract Ltd. to amend GSTR-I for the month of Jan, 2019 and allows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stem allows amendment of all records declared in GSTR-1 as per the time line mentioned under Section 37(3) of the CGST Act 2017. The petitioner did not exercise the option to amend / rectify the mistake by making such correction in subsequent GSTR-1 return up to September 2019. The original invoice in this case is reported in financial year 2018-19. Therefore no amendment is allowed of invoices pertaining to FY 2018-19 after the due date for furnishing the details under Section 37(1) of the CGST / SGST act. Learned counsel for the Respondent GSTN has, in particular referred to the stand of the respondent GSTN as contained in para 6 of the counter affidavit. GSTN has stated that the portal has been designed in accordance with the provisions of CGST / SGST Act and Rules made thereunder and there are no arbitrary restrictions imposed on the portal. Allowing amendments in GSTR-1 at this belated stage shall carve out an exception not only raising potential technical issues in the system, but also leading to complications in settlement of payments across the state governments. In substance GSTN has conveyed that correction of GSTR-1 return by the petitioner at this stage could be barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s mistake in June 2021 and thereafter approached this Court in the present writ petition on 9th July 2021. It is submitted that the mechanism for matching, reversion and reclaim of input tax credit or matching, reversion and reclaim of reduction in output tax liability under section 42 and 43 of the CGST Act could not be undertaken. It is further submitted that by notification no.18/2022 dated 28.09.2022 issued by CBIC (Department of Revenue), Ministry of Finance the amendments made by the Finance Act, 2022 in the CGST Act have been notified w.e.f. 01.10.2022 whereby Sections 42 and 43 have been omitted. The same operates prospectively and has no bearing in the case of the petitioner. Learned counsel for the petitioner has further referred to the mechanism conceived under Rule 70 and 71 of the CGST Rules and submits that the relevant form GST MIS-1 and GST MIS-2 were not notified. These rules have now been omitted w.e.f. 01.10.2022 by the notification no.19/2022 dated 28.09.2022 and would be prospectively applicable. As such, the system conceived under the GST regime to communicate any mismatch in claim of input tax credit in respect of any tax period through the common portal at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedure. Learned counsel for the petitioner has also placed reliance on the case of Union of India Vrs. Bharti Airtel Ltd. [2021(54) GSTL 257 (SC) para 33] in support of the submission that the common portal is only a facilitator to feed or retrieve such information. The primary source for assessment or filing of returns is in the form of the agreements, invoices / challans, receipt of the goods and services and books of accounts, which are maintained by the assesse manually / electronically. It is submitted that since the common portal is only a facilitator, technical issues in its opening would not come into the way of correction of any errors in case it is not barred by law. Relying upon the case of Price Waterhouse Coopers Private Limited Vrs. Commissioner of Income Tax, Kolkata-I and another [(2012) 11 SCC 316, para 13, 15, 16] it is further submitted that in that the Hon ble Supreme Court has acknowledged that it is possible that even the assesse could make a silly mistake which could be a bona fide and inadvertent error while submitting its return. In that case the Apex court did not find any concealment of income or furnishing of inaccurate particulars deliberately on the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R IX RETURNS 37. Furnishing details of outward supplies.- (1) Every registered person, other than an Input Service Distributor, a non-resident taxable person and a person paying tax under the provisions of section 10 or section 51 or section 52, shall furnish, electronically, in such form and manner as may be prescribed, the details of outward supplies of goods or services or both effected during a tax period on or before the tenth day of the month succeeding the said tax period and such details shall be communicated to the recipient of the said supplies within such time and in such manner as may be prescribed: Provided that the registered person shall not be allowed to furnish the details of outward supplies during the period from the eleventh day to the fifteenth day of the month succeeding the tax period: Provided further that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing such details for such class of taxable persons as may be specified therein: Provided also that any extension of time limit notified by the Commissioner of State tax or Commissioner of Union territory tax shall be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit or debit notes and may include therein, the details of inward supplies and credit or debit notes received by him in respect of such supplies that have not been declared by the supplier under sub-section (1) of section 37. (2) Every registered person, other than an Input Service Distributor or a non resident taxable person or a person paying tax under the provisions of section 10 or section 51 or section 52, shall furnish, electronically, the details of inward supplies of taxable goods or services or both, including inward supplies of goods or services or both on which the tax is payable on reverse charge basis under this Act and inward supplies of goods or services or both taxable under the Integrated Goods and Services Tax Act or on which integrated goods and services tax is payable under section 3 of the Customs Tariff Act, 1975, and credit or debit notes received in respect of such supplies during a tax period after the tenth day but on or before the fifteenth day of the month succeeding the tax period in such form and manner as may be prescribed: Provided that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th, tax payable and tax paid within eighteen days after the end of such quarter. (3) Every registered person required to deduct tax at source under the provisions of section 51 shall furnish, in such form and manner as may be prescribed, a return, electronically, for the month in which such deductions have been made within ten days after the end of such month. (4) Every taxable person registered as an Input Service Distributor shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, within thirteen days after the end of such month. (5) Every registered non-resident taxable person shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, within twenty days after the end of a calendar month or within seven days after the last day of the period of registration specified under sub-section (1) of section 27, whichever is earlier. (6) The Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the returns under this section for such class of registered persons as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nishing of relevant annual return, whichever is earlier. 42. Matching, reversal and reclaim of input tax credit.- (1) The details of every inward supply furnished by a registered person (hereafter in this section referred to as the recipient ) for a tax period shall, in such manner and within such time as may be prescribed, be matched (a) with the corresponding details of outward supply furnished by the corresponding registered person (hereafter in this section referred to as the ―supplier) in his valid return for the same tax period or any preceding tax period; (b) with the integrated goods and services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of goods imported by him; and (c) for duplication of claims of input tax credit. (2) The claim of input tax credit in respect of invoices or debit notes relating to inward supply that match with the details of corresponding outward supply or with the integrated goods and services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of goods imported by him shall be finally accepted and such acceptance shall be communicated, in such manner as may be prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch recipient shall be liable to pay interest on the amount so added at the rate specified in sub-section (3) of section 50. 43. Matching, reversal and reclaim of reduction in output tax liability.- (1) The details of every credit note relating to outward supply furnished by a registered person (hereafter in this section referred to as the supplier ) for a tax period shall, in such manner and within such time as may be prescribed, be matched (a) with the corresponding reduction in the claim for input tax credit by the corresponding registered person (hereafter in this section referred to as the recipient ) in his valid return for the same tax period or any subsequent tax period; and (b) for duplication of claims for reduction in output tax liability. (2) The claim for reduction in output tax liability by the supplier that matches with the corresponding reduction in the claim for input tax credit by the recipient shall be finally accepted and communicated, in such manner as may be prescribed, to the supplier. (3) Where the reduction of output tax liability in respect of outward supplies exceeds the corresponding reduction in the claim for input tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (3) of section 50. 10. The relevant Rules 59, 60 and Rules 70, 71 (as it existed prior to the amendments under notification no.19/2022 dated 28.09.2022 w.e.f. 01.10.2022 by the CBIC [(Department of Revenue) Ministry of Finance, Government of India] which have material bearing on this issue are also extracted hereunder: CHAPTER VIII RETURNS [59. Form and manner of furnishing details of outward supplies.- (1) Every registered person, other than a person referred to in section 14 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), required to furnish the details of outward supplies of goods or services or both under section 37, shall furnish such details in FORM GSTR-1 for the month or the quarter, as the case may be, electronically through the common portal, either directly or through a Facilitation Centre as may be notified by the Commissioner. (2) The registered persons required to furnish return for every quarter under proviso to subsection (1) of section 39 may furnish the details of such outward supplies of goods or services or both to a registered person, as he may consider necessary, for the first and second months of a quarter, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period; (c) a registered person, who is restricted from using the amount available in electronic credit ledger to discharge his liability towards tax in excess of ninety-nine per cent. of such tax liability under rule 86B, shall not be allowed to furnish the details of outward supplies of goods or services or both under section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not furnished the return in FORM GSTR-3B for preceding tax period.] [60. Form and manner of ascertaining details of inward supplies.-(1)The details of outward supplies furnished by the supplier in FORM GSTR-1 or using the IFF shall be made available electronically to the concerned registered persons (recipients) in Part A of FORM GSTR-2A, in FORM GSTR-4A and in FORM GSTR-6A through the common portal, as the case may be. (2)The details of invoices furnished by an non-resident taxable person in his return in FORM GSTR-5 under rule 63 shall be made available to the recipient of credit in Part A of FORM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t month of the quarter to the due date of furnishing details using the IFF for the second month of the quarter; (c) for the third month of the quarter, between the day immediately after the due date of furnishing of details using the IFF for the second month of the quarter to the due date of furnishing of FORM GSTR-1 for the quarter; (iii) the details of the integrated tax paid on the import of goods or goods brought in the domestic Tariff Area from Special Economic Zone unit or a Special Economic Zone developer on a bill of entry in the month. (8) The Statement in FORM GSTR-2B for every month shall be made available to the registered person,- (i) for the first and second month of a quarter, a day after the due date of furnishing of details of outward supplies for the said month, in the IFF by a registered person required to furnish return for every quarter under proviso to sub-section (1) of section 39, or in FORM GSTR-1 by a registered person, other than those required to furnish return for every quarter under proviso to sub-section (1) of section 39, whichever is later; (ii) in the third month of the quarter, a day after the due date of furnishing of deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utward supply in his valid return so as to match the details of corresponding inward supply declared by the recipient; (ii) Rectification by the recipient means deleting or correcting the details of an inward supply so as to match the details of corresponding outward supply declared by the supplier. 11. It is also necessary to refer to the amendment carried out by the Finance Act 2022 in section 37 (3) which is to the following effect:- Any registered person, who has furnished the details under sub-section (1) for any tax period shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period . By the said Amendment, the expression and which have remained unmatched under Section 42 or section 43 been omitted. However this amendment has been notified only w.e.f. 01.10.2022 vide notification no.18/2022 dated 28.09.2022 by CBIC (Department of Revenue) Ministry of Finance, Government of India. A bare perusal of provisions of Section 37 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s GSTR-2 and GSTR-1A the Respondent No.6 could also not submit the relevant form GSTR-2 indicating such incorrect entries in its GSTR-2A due to incorrect entries in GSTR-1 by the petitioner. Since the mechanism provided for matching of details of inward supply furnished by a registered person or outward supply not being rightly declared by the supplier in his returns GSTR-1, not being place, such discrepancy could not be communicated to petitioner. The relevant form GST-MIS 1 and GST-MIS 2 as conceived under section 70 and 71 read with section 42 (prior to its omission under notification no.19/2022 and 18/2022 vide notification dated 28.09.2022 of CBIC) also having not been prescribed, the online mechanisms for discovery and correction of such mistake either by the supplier or by the recipient or both, could not take place. Petitioner therefore, appears to have a valid reason in not being able to rectify the entries in the GSTR-1 returns of March 2019 in the returns of September 2019 to be filed by 20th of October 2019 or the date of filing of the annual return, whichever is earlier. The error apparently came to the notice of the petitioner only during finalization of the accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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