| Headnote |
Central Goods and Services Tax Act, 2017 – ss. 16, 39, 49, 59 and 168 – Central Goods and Services Tax Rules, 2017 – Circular dated 29.12.2017 issued by the Commissioner (GST) – Validity of – Act of 2017 and Rules of 2017 brought into force along with Forms GSTR-1, GSTR-2, GSTR-2A, GSTR-3 and GSTR-3B – Various notifications were issued – In exercise of the powers conferred by Rule 61(5) of the stated Rules, the Central Government issued Notification No.21/2017-Central Tax specifying that the return for the months of July and August 2017 to be furnished in Form GSTR-3B electronically through the common portal before the dates as specified in the corresponding entry in column (3) of the table given therein – Thereafter again various notifications/circulars were regarding extension of time (notification dated 17.08.2017), relating to system-based reconciliation of information furnished in Forms GSTR-1, GSTR-2 and GSTR-3B and the mechanism for correction of erroneous details furnished in Form GSTR-3B, specifying the timeline for filing of return in Form GSTR-3B (circular dated 01.09.2017) etc. were issued – The Commissioner (GST) then issued the circular dated 29.12.2017, on the subject of filing of returns under GST, clarifying certain issues considered by the Central Board of Indirect Taxes and Customs to usher in uniformity in implementation across field formations – By this Circular, the earlier Circular issued on 01.09.2017 was kept in abeyance – Paragraph 4 of the Circular dated 29.12.2017 specifies “...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...” – Respondent No. 1 was, however, keen on availing of the dispensation specified in the Circular dated 01.09.2017 for the relevant period (July to September 2017) – After Form GSTR-2A became operational in September 2018, respondent No. 1 realized that it had sufficient amount in the ITC ledger account (electronic credit ledger) during the relevant period – Further, due to non- functionality of GSTR-2A, respondent No. 1 had to discharge its OTL by depositing/paying in cash – Respondent No.1 urged to rectify Form GSTR-3B – However, the impugned Circular dated 29.12.2017 came in the way of respondent No. 1 in doing so – Resultantly, respondent No.1 approached the High Court by way of writ petition – High Court allowed the writ petition and read down paragraph 4 of circular dated 29.12.2017 to the extent it restricted the rectification of Form GSTR-3B in respect of period in which the error had occurred – Before the Supreme Court respondent no. 1 contended that the circular dated 29.12.2017 was issued without any authority of law – Held: The decision was taken by the Board after considering various representations received seeking clarifications on various aspects of return filing such as return filing dates, applicability of quantum of late fee, amendment of errors in submitting/filing of Form GSTR-3B and other related queries – In strict sense, it is not the direction issued by the Commissioner (GST) as such, but it is notifying the decision(s) of the Board taken in exercise of its powers conferred u/s. 168(1) of the 2017 Act – The circular was issued under the signatures of Commissioner (GST), but in essence, it was notifying the decision(s) of the Board, which has authority and power to issue directions – The stipulations in the stated circular including paragraph 4 are consistent with the provisions of the 2017 Act and the Rules – The express provision in the form of s. 39(9) clearly posits that omission or incorrect particulars furnished in the return in Form GSTR-3B can be corrected in the return to be furnished in the month or quarter during which such omission or incorrect particulars are noticed – Accordingly, the argument that the impugned Circular dated 29.12.2017 was issued without authority of law is rejected. Central Goods and Services Tax Act, 2017 – ss. 16, 39, 49 and 59 – Central Goods and Services Tax Rules, 2017 – rr. 59, 60 and 61 – Rectification of Form GSTR-3B – The grievance of the writ petitioner-respondent no.1 before the High Court was that due to non-operability of Form GSTR-2A at the relevant time (July to September 2017), it was denied of access to the information about its electronic credit ledger account and consequently, availing of Input Tax Credit (ITC) for the relevant period and instead to discharge the Output Tax Liability (OTL) by paying cash to its vendors – Thus, it has resulted in payment of double tax and unfair advantage to the tax authorities because of their failure to operationalize the statutory forms enabling auto-populating statement of inward supplies of the recipient and outward supplies including facility of matching and correcting the discrepancies electronically – The High Court allowed the writ petition for the period to which the ‘error relates’ i.e. July to September 2017 – High Court also allowed writ petitioner to rectify Form GSTR-3B for the period in which error had occurred – On appeal, held: The writ petitioner being a registered person, was under a legal obligation to maintain books of accounts and records as per the provisions of the 2017 Act and Chapter VII of the 2017 Rules regarding the transactions in respect of which the OTL would occur – Even in the past (till recently upto the 2017 Act came into force), during the pre-GST regime, the writ petitioner (being registered person/assessee) had been maintaining such books of accounts and records and submitting returns on its own – No such auto-populated electronic data was in vogue – It is the same pattern which had to be followed by the registered person in the post-GST regime – Further, as per scheme of the 2017 Act, registered person is obliged to do self-assessment of ITC, reckon its eligibility to ITC and of OTL including the balance amount lying in cash or credit ledger primarily on the basis of his office record and books of accounts required to be statutorily preserved – That he could do without the common electronic portal as was being done in the past till recently pre-GST regime – The factum of non-operability of Form GSTR-2A, therefore, is a flimsy plea taken by the writ petitioner – The writ petitioner with full knowledge and information had done self- assessment and assessed the OTL for the relevant period and chose to discharge the same by paying cash – Having so opted, now it was not open to the respondent to resile from option already exercised – As far as rectification of errors is concerned, the matching and correction process happens on its own as per mechanism specified in ss.37 and 38, after which Form GSTR-3 is generated for the submission of returns; and once submitted any changes may have a cascading effect – Therefore, law permits rectification of error and omissions only at the initial stages of Form GSTR-1 and GSTR-3, but in a specified manner – The direction of the High Court to allow the rectification cannot be sustained – The impugned judgment and order of the High Court is set aside. |
