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On account of a clerical error, the Petitioner had erred in filing Form GSTR-1 for the month of January 2019 by inadvertently mentioning wrong GSTIN against invoices raised on its purchaser. However, this error was noticed only during settlement of accounts in the year 2021, when the purchaser withheld payment in respect of the invoice as the invoice was not reflected in their GSTR-2A for the said period. Aggrieved, the Petitioner preferred a writ petition before the Jharkhand High Court seeking relief by way of rectifying the GSTR-1.
The HC observed that the purchaser had reversed the ITC availed based on entries in books of account under the bona fide belief that the supplier had paid the taxes against such invoices. However, upon realization that the invoice under dispute did not appear in their GSTR-2A, the receipient had duly reversed the credit. Moreover, the party whose GSTIN was wrongly mentioned, had also not availed ITC wrongly reflected in its GSTR-2A. Therefore, the HC held that as there was no loss of revenue to Government, the interest of justice would be served if the Petitioner and their aggrieved purchaser would be allowed to make the necessary correction in their GSTR-1 and GSTR -2 respectively. Accordingly, the Petitioner was allowed to rectify its GSTR-1. The HC further left it open for the aggrieved purchaser to claim interest from the Petitioner on the ITC that was reversed by them for the relevant period.
Mahalaxmi Infra Contract Limited [2022-VIL-735-JHR]
This judgment is welcome by the trade with open arms as it will have far reaching impact on many taxpayers who have erred in filing their returns, especially during the initial periods of GST implementation. In this regard, it would be pertinent to note that last year, the Apex Court in RE: Bharti Airtel Limited [2021 (54) GSTL 257 (SC)] had held that self-assessment can be done even without the common electronic portal. 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 SC had agreed with the Revenue as they cannot permit the taxpayers to unilaterally carry out the rectification of their returns submitted electronically as this would affect the obligations and liabilities of other stakeholders because of the cascading effect in their electronic records, which would lead to uncertainty and chaos. It would now be interesting to see whether the Revenue would challenge the instant judgement of the Jharkhand HC, before the SC.
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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