Punjab-Haryana High Court
Bar Code India Ltd vs Union Of India And Others on 14 November, 2024
Author: Sanjeev Prakash Sharma
Bench: Sanjeev Prakash Sharma
Neutral Citation No:=2024:PHHC:148491-DB
CWP No. 25343 of 2023 -1-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
CWP No. 25343 of 2023 (O&M)
Reserved on : 06.11.2024
Date of Pronouncement : 14.11.2024
Bar Code India Limited ...Petitioner
Versus
Union of India and others ...Respondents
CORAM: HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA
HON'BLE MR. JUSTICE SANJAY VASHISTH
Present: Mr. Simarpal Sawhney, Advocate and
Mr. Rahul Makkar, Advocate, for the petitioner.
Mr. Ajay Kalra, Senior Standing Counsel for the respondents.
***
SANJEEV PRAKASH SHARMA, J.
The short question involved in the present case is whether the
petitioner can be permitted to rectify/ amend the GST number of the
purchaser in GSTR-1
GSTR 1 return with respect to the invoices dated 13.05.2021
(on account of human error) for the quarter ending 330.06.2021
0.06.2021 after the
limitation period is expired in terms of Section 37(3) of the Central Goods
and Services Tax Act, 2017 (for short, 'the Act').
2. Learned counsel for the petitioner submitted that the petitioner
company is a limited company and was rregistered
egistered with GSTIN No.
06AAACB2892A1Z5. It is dealing with solutions in Enterprise Mobility,
Bar Coding, RFID and EWLAN for supply chain and asset management in
the retail, manufacturing and logistics market verticals.
3. Pursuant to the order placed by purchaser FedEx Express
Transportation & Supply Chain Services (India) Private Limited, the
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petitioner company issued invoices to the purchaser for financial year 2021
2021--
2022 where erroneously at the time of filing of GSTR
GSTR-1
1 return, the petitioner
company made certain inadvertent errors by mentioning the point of sale as
Mumbai instead of Delhi and also mentioned the GST number of the
receiver/ purchaser of Mumbai instead of GST number of the purchaser in
Delhi.
4. Learned counsel for the petitioner sub
submits that the aforesaid
errors in the GSTR-1
GSTR return filed the petitioner came to their knowledge
after the concerned purchaser notified the error to them somewhere in the
month of April 2023 as they found difficulty to avail GST input tax credit
credit..
The purchaser
aser further refused to clear the other invoices of the petitioner
petitioner..
Immediately,, thereafter the petitioner sent letter dated 18.08.2023 to
respondent no.3 praying for allowing them to make necessary amendments
in their return relating to the three invoices issued on 13.05.2021. The
Revenue, however, rejected the prayer on account of there being no
provision to make amendments after the time period laid down under the
Rules had expired. There was no provision also to make amendments by a
manual request.
Learned counsel for the petitioner submits that the petitioner
company ought not be made to suffer on account of inadvertent human error
which is apparent on the face of the record having occurred without there
being any deliberation on part of the petitio
petitioner.
ner. The business of the
petitioner company is seriously affected on account of the said refusal to
make the correction.
5. Learned counsel for the petitioner relie
relies on judgments of
Karnataka High Court in WP No. 2911 of 2022 - M/s Orient Traders vs The
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Deputy Commissioner of Commercial Taxes and another, decided on
16.12.2022, Jharkhand High Court in WP (T) No. 2478 of 2021 - M/s
Mahalaxmi Infra Contract Limited vs GST Council and others, decided on
18.10.2022; Madras High Court in WP No. 4458 of 2019
2019- M/s
/s Interplex
Electronics India Private Limited vs The Assistant Commissioner of State
Tax and another decided on 15.06.2022; Kolkata High Court in Price
Waterhouse Coopers Private Limited vs CIT, Kolkata
Kolkata-1 (2012) 11 SCC
316; and Bombay High Court in WP No. 15368 of 2023 Star Engineers (I)
Private Limited vs Union of India and others decided on 14.12.2023.
6. The reply has been filed on behalf of the respondent
respondentss and
learned counsel per
p contra submits that last date for rectification of error or
omission in terms of Section 37(3) of the Act for the A. Y. 2021
2021-2022
2022 was
30.11.2022. It is submitted that the petitioner ought to have been cautioned
enough in checking its
it monthly returns and prior to filing of annual return, it
could have easily
e rectified in GSTR-1
1 as the common portal allows
rectification of such errors till the filing of annual return.
7. Learned counsel for the respondents submits that the Act allows
ample time to rectify the errors. The time limit as laid down in Sect
Section
ion 37(3)
of the Act cannot be allowed to be altered for a particular company and they
will have to bear the loss as no general rule can be laid down and there
cannot be an open ended time frame for corrections/ rectifications. He
submits that the time frame
frame has been aligned with the further time provided
for furnishing of audit report for the respective financial years. There is a
cascading effect on the other processes and it is important to conclude the
entire process in the timeline.
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8. It is submitted
d by learned counsel for the respondents that
merely by rectifying Form GSTR-1
GSTR 1 at this stage would not automatically
allow the concerned recipient tax payer to claim ITC now as the same has
also become time barred in terms of Section 16 (4) of the Act. It is further
pointed out that after submitting GSTR-1
GSTR 1 by the supplier, GSTR
GSTR-2A
2A auto
generates for the recipient supplier. The same becomes a basis for claiming
input tax credit under the GSTR-3B.
GSTR 3B. Thus, input tax credit can be availed till
the date on furnishing
furnishing of the return as provided under Section 39 of the Act
i.e. by the month of September following the end of financial year for which
the invoice or debit note pertains or the date when the relevant annual return
is furnished, whichever is earlier. The co
correction
rrection in the corresponding
GSTR-1,
1, therefore, is permissible in terms of the aforesaid timeline.
9. Learned counsel for the respondents further submits that the
issue as raised in the present petition stands finally adjudicated by Hon'ble
the Supreme Court in Union of India (UOI) vs Bharti Airtel Limited and
others (2022) 4 SCC 328.
10. We have considered the submissions.
11. Section 16 (4); Sections 37 (1); 37 (3) and 39 of the Act provide
as under:-
"16. Eligibility and conditions for taking input tax credit.
xxx xxx xxx
(4) A registered person shall not be entitled to take
input tax credit in respect of any invoice or debit note for
supply of goods or services or both after the thirtieth day of
November] following the end of financial year to which such
invoice or [xxx] debitt note pertains or furnishing of the relevant
annual return, whichever is earlier:
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[PROVIDED that the registered person shall be entitled
to take input tax credit after the due date of furnishing of the
return under section 39 for the month of September, 2018 till
the due date of furnishing of the return under the said section
for the month of March, 2019 in respect of any invoice or
invoice relating to such debit note for supply of goods or
services or both made during the financial year 2017
2017-18,
18, the
details
ils of which have been uploaded by the supplier under sub
sub--
section (1) of section 37 till the due date for furnishing the
details under sub-section
section (1) of said section for the month of
March, 2019.
Section 37 - Furnishing details of outward supplies
"(1) Every
ery 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, [subject to such conditions and
restrictions
ns and] 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, subject to such conditions and restrictions, within such
time and in such manner as may be prescribed, be
communicated to the recipient of the said supplies]: [xxx]
[PROVIDED that] the Commissioner may, for reasons to be
recorded in writing, by notification, extend the ti
time
me limit for
furnishing such details for such class of taxable persons as may
be specified therein:
[PROVIDED FURTHER that] any extension of time limit
notified by the Commissioner of State tax or Commissioner of
Union territory tax shall be deemed to be notified by the
Commissioner."
Section 37(3) in The Central Goods and Services Tax Act, 2017
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"(3)
(3) Any registered person, who has furnished the details under
sub-section
section (1) for any tax period [xxx], 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:
PROVIDED that no
o rectification of error or omission in respect
of the details furnished under sub
sub-section
section (1) shall be allowed
after the thirtieth day of November] following the end of the
financial year to which such details pertain, or furnishing of the
relevant annual return, whichever is earlier:
[PROVIDED FURTHER that the rectification of error or
omission in respect of the details furnished under sub
sub-section
section
(1) shall be allowed after furnishing of the return under section
39 for the month of September, 2018 till th
thee due date for
furnishing the details under sub
sub-section
section (1) for the month of
March, 2019 or for the quarter January, 2019 to March,
2019.]"
Section 39 of The Central Goods and Services Tax Act, 2017
39. Furnishing of returns.- (1) Every registered person, other
than an Input Service Distributor or a non
non-resident
resident taxable
person or a person paying tax under the provisions of section
10 or section 51 or section 52 shall, for every calendar month
or part thereof, furnish, a return, electronically, of inward and
outward supplies of goods or services or both, input tax credit
availed, tax payable, tax paid and such other particulars, in
such form and manner, and within such time, as may be
prescribed:
Provided that the Government may, on the recommendations of
thee Council, notify certain class of registered persons who shall
furnish a return for every quarter or part thereof, subject to
such conditions and restrictions as may be specified therein
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(2) A registered person paying tax under the
provisions of section 10,
10, shall, for each financial year or part
thereof, furnish a return, electronically, of turnover in the State
or Union territory, inward supplies of goods or services or
both, tax payable, tax paid and such other particulars in such
form and manner, and within
within such time, as may be prescribed.
(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 deduct
deductions
ions 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,
electronically, within thirteen days after
the end of such month.
(5) Every registered non
non-resident
resident taxable person shall,
for every calendar month or part thereof, furnish, in such form
and manner as may be prescribed, electronically, within
thirteen) days after the
he end of a calendar month or within seven
days after the last day of the period of registration specified
under sub-section
section (1) of section 27, whichever is earlier.
(6) The Commissioner may, for reasons to be recorded
in writing, by notification, extend tthe
he time limit for furnishing
the returns under this section for such class of registered
persons as may be specified therein:
Provided that any extension of time limit notified by the
Commissioner of Statee tax or Union territory tax shall be
deemed to be notified
otified by the Commissioner.
(7) Every registered person who is required to furnish a
return under sub-section (1), other than the person referred to
in the proviso thereto, or sub-section
section (3) or sub
sub- section (5),
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shall pay to the Government the tax due aass per such return not
later than the last date on which he is required to furnish such
return:
Provided that every registered person furnishing return
under the proviso to section (1) shall pay to the Government, in
such form and manner, and within such time,
ime, as may be
prescribed,
prescribed,-
(a) an amount equal to the tax due taking into account
inward and outward supplies of goods or services or
both, input tax credit availed, tax payable and such
other particulars during a month, or
(b) in lieu of the amount re
referred
ferred to in clause (a), an
amount determined in such manner and subject to such
conditions and restrictions as may be prescribed.)
Provided further that every registered person furnishing
return under sub-section
section (2) shall pay to the
Government the tax duee taking into account turnover in
the State or Union territory, inward supplies of goods or
services or both, tax payable, and such other particulars
during a quarter, in such form and manner, and within
such time, as may be prescribed.]
(8) Every registered person who is required to furnish a
n a return under sub-section
section (1) or sub
sub-section (2) shall furnish
ish
a return for every tax period whether or not any supplies of
goods or services or both have been made during such tax
period.
(9) Where any registered
istered person after fu
furnishing
hing a return
under sub-section
section (1) or sub section (2) or sub
sub-section
section (3) or
sub-section (4) or sub-section
section (5) discovers any omission or
incorrect particulars therein, other than as a result of scrutiny,
audit, inspection or enforcement
orcement activity by the tax authorities,
he shall rectify such omission or incorrect particulars "fin such
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form and manner as may be prescribed), subject to payment of
interest under this Act Provided that no such rectification of
any omission or incorrectt particulars shall be allowed after the
due the thirtieth day of November] following [the end of the
financial year to which such details pertain), or the actual date
of furnishing of relevant annual return, whichever is earlier.
(10) A registered person shall not be allowed to furnish a
return for a tax period if the return for any of the previous tax
periods "for the details of outward supplies under sub
sub-section
section
(1) of section 37 for the said tax period has not been furnished
by him Provided that the Go
Government
vernment may, on the
recommendations of the Council, by notification, subject to
such conditions and restrictions as may be specified therein,
allow a registered person or a class of registered persons to
furnish the return, even if he has not furnished th
thee returns for
one or more previous tax periods or has not furnished the
details of outward supplies under sub
sub-section
section (1) of section 37
for the said tax period.
(11) A registered person shall not be allowed to furnish a
return for a tax period after the ex
expiry
piry of a period of three
years from the due date of furnishing the said return: Provided
that the Government may, on the recommendations of the
Council, by notification, subject to such conditions and
restrictions as may be specified therein, allow a regi
registered
stered
person or a class of registered persons to furnish the return for
a he return for a tax period, even after the expiry of the said
period of three years from the due date of fu
furnishing
ishing the said
return.
12. From the aforesaid provisions, it is appar
apparent
ent that the process as
submitted by learned counsel for the Revenue is complete in itself and each
step precedes the earlier step. If one of the steps is erroneous and the same is
not corrected or rectified within the timeline provided under the provision
provisions,
s, a
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cascading effect would occur to the subsequent process provided under the
subsequent provisions. We are satisfied from the aforesaid provisions that if
a person submits an erroneous GSTR-1,
GSTR 1, and does not correct it, the
subsequent GSTR-2A
GSTR and GSTR-3B would
ould also reflect the erroneous
information and the consequences thereof shall follow.
13. We find that the time limitation, as provided under Section
37(1) and 37(3) of the Act, is linked directly and proportionately to Section
16 (4) of the Act. In terms of the aforesaid provisions, input tax credit can be
availed till the due date of furnishing the return under Section 39 of the Act
for the month of September following the end of the financial year to which
the invoice / debit note pertains or furnishing
furnishing of the annual return, whichever
is earlier. The correction in the corresponding GSTR
GSTR-1
1 is permissible in
terms of the timeline as specified in Section 16 (4) of the Act.
14. On careful examination of the facts, it clearly emerges that the
petitioner could not detect the error of mentioning the point of sale as
Mumbai instead of Delhi and the mentioning of the GST number of
purchaser of Mumbai instead of GST number of purchaser of Delhi which
has resultant,, as per his submissions, loss to the concerne
concerned purchaser, who
could not avail the ITC. Last date of submission for rectification/ omission,
admittedly falls on 30.11.2022 for the concerned petitioner.
15. The observations made by Bombay High Court in Star
Engineers (I) Private Limited (supra), relied
lied upon by learned counsel for the
petitioner, particularly in paras 12 and 13, are as under:
under:-
"12. Having considered the statutory ambit of Section
37, 38 and 39, we are of the clear opinion that the
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provisions of sub-section
section (3) of Section 37 read wi
with
th
Section 38 and sub-sections
sections (9) and (10) of Section 39
need to be purposively interpreted. We cannot read sub
sub--
section (3) of Section 37 to mean that the assessee would
be prevented from placing the correct position and
having accurate particulars in reg
regard
ard to all the details in
the GST returns being filed by the assessee and that there
would not be any scope for any bonafide, and inadvertent
rectification / correction. This would presupposes that
any inadvertent error which had occurred in filing of the
returns, once is permitted to be rectified, any technicality
not making a window for such rectification, ought not to
defeat the provisions of sub
sub-section
section (3) of Section 37 read
with the provisions of sub
sub-section
section (9) of Section 39 read
de hors the provisos.
13. In our opinion, the proviso ought not to defeat the
intention of the legislature as borne out on a bare
reading of subsection (3) of Section 37 and sub
sub-section
section
(9) of Section 39 in the category of cases when there is a
bonafide and inadvertent error in furnishing any
particulars in filing of returns, accompanied with the fact
that there is no loss of revenue whatsoever in permitting
the correction of such mistake. Any contrary
interpretation of sub-section
section (3) of Section 37 read with
sub-sections (9) and (10) of Section 39 would lead to
absurdity and / or bring a regime that GST returns being
maintained by the department having incorrect
particulars become sacrosanct, which is not what is
acceptable to the GST regime, wherein every aspect of
the returnss has a cascading effect. This is necessarily
required to be borne in mind when considering the cases
of inadvertent human errors creeping into the filing of
GST returns."
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16. The Bombay High Court also noticed that the Single
Judge of Madras High Court in Sun Dye Chem vs Assistant Commissioner
vs Assistant Commissioner (ST) and others 2020 TIOL 1858 HC
MAD.GST held that the customers of the assessee should not be prejudiced
from
m availing credit which they are otherwise legitimately entitled to. It also
relied on Division Bench judgment of Orissa High Court passed in Shiva
Jyoti Construction vs The Chairperson, Central Board of Excise &
Customs and others MANU/OR/0522/2023 wherei
wherein
n the Court observed that
if no prejudice has been caused to the department, such error ought to be
rectified.
17. In Bharti Airtel's case (supra), the Supreme Court was
considering the question of similar nature. In the said case, the Bharti Airtel
has erroneously deposited cash and submitted that if it was allowed to rectify
Form GSTR--3B
3B so as to avail ITC for the relevant period, amount ppaid
aid by it
in cash towards the OTL would get credited to its electronic cash ledger
account. After considering the provisions of Section 39 of the Act, which
relates to the final return being filed under Form GSTR
GSTR-3B,
3B, it proceeded to
set aside the order passed
passed by the Delhi High Court observing as under:
under:-
"32. Reverting to the analysis of the issues and contentions
done by the High Court, it is primarily focused on the grievance
of the writ petitioner that due to non
non-operability
operability of Form
GSTR-2A at the relevant
evant time (July to September 2017), it had
been denied of access to the information about its electronic
credit ledger account and consequently, availing of ITC for the
relevant period and instead to discharge the 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
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populating statement of inward supplies of the recipient and
outward supplies including facil
facility
ity of matching and correcting
the discrepancies electronically. The High Court, however, did
not enquire into the cardinal question as to whether the writ
petitioner was required to be fully or wholly dependent on the
auto generated information in the ele
electronic
ctronic common platform
for discharging its obligation to pay OTL for the relevant
period between July and September 2017. The answer is an
emphatic No. In that, the writ petitioner being a registered
person, was under a legal obligation to maintain book
bookss 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
pre-GST
GST
regime,
gime, 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
auto-populated
populated
electronic data was in vogue. It is the same pattern which had
to be followed by the registered person in the post
post-GST regime.
Thereafter, Hon'ble the Supreme Court dealt with Section 16 of the Act and
held as under:-
under:
"48. A priori, despite such an express mechanism
provided by Section 39(9) read with Rule 61, it was not
open to thee High Court to proceed on the assumption that
the only remedy that can enable the assessee to enjoy the
benefit of the seamless utilization of the input tax credit is
by way of rectification of its return submitted in Form
GSTR3-B
B for the relevant period in which the error had
occurred. Any unilateral change in such return as per the
present dispensation, would have cascading effect on the
recipients and suppliers associated with the concerned
transactions. There would be complete uncertainty and
no finality
ity could ever be attached to the self
self-assessment
assessment
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return filed electronically. We agree with the submission
of the appellant that any indulgence shown contrary to
the statutory mandate would not only be an illegality but
in reality, would simply lead to cchaotic
haotic situation and
collapse of tax administration of Union, States and Union
Territories. Resultantly, assessee cannot be permitted to
unilaterally carry out rectification of his returns
submitted electronically in Form GSTR
GSTR-3B,
3B, which
inevitably would affect
ffect the obligations and liabilities of
other stakeholders, because of the cascading effect in
their electronic records.
49. As noted earlier, the matching and correction
process happens on its own as per the mechanism
specified in Sections 37 and 38, after which Form GSTR--
3 is generated for the purposes of submission of returns;
and once it is submitted, any changes thereto m
may
ay have
cascading effect. Therefore, the law permits rectification
of errors and omissions only at the initial stages
of Forms GSTR-11 and GSTR
GSTR-3,
3, but in the specified
manner. It is a different dispensation provided than the
one in pre-GST
GST period, which did not have the provision
of auto-populated
populated records and entries."
18. It is noticed that as soon as the supplier files GSTR
GSTR-1
mentioning the invoice amount, place of sale and the GSTR Number, the
system auto generate GSTR-2A
GSTR 2A of the recipient of the supplier, which is the
basis for claiming input tax credit through GSTR
GSTR-3B.
19. As per Section 16 (4) of the Act, a registered person shall not
be entitled to take input tax credit after the due date of furnishing of the
return under Section 39 of the Act
Act for the month of September following the
end of financial year to which such invoice or debit note pertains or
furnishing of the relevant annual return, whichever is earlier. Thus, ITC can
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be availed till the due date of furnishing of the return. If ther
theree is a correction
in the corresponding GSTR-1
GSTR 1 within the timeline, ITC would be permissible
in terms of the timeline specified in Section 64 of the Act, therefore, the
petitioner cannot be permitted to rectify the return beyond the statutory time
limit prescribed
scribed under the GST Act. Even if the petitioner is allowed to
rectify the return now, there will not be an automatic benefit of income tax
credit, which the purchaser can claim. Had the petitioner detected its error
prior to filing of annual return, it could
could have simply rectified the same in the
GSTR-1
1 for that month
month as the common portal allows rectification of such
error till the filing of the annual return.
20. Thus, we find the ratio of the judgment passed by Hon'ble the
Supreme Court in Bharti Airtel's
's case (supra) would also apply at the stage
of committing error while submitting final return under GSTR-1.
1. We further
hold that merely because of an error being committed by a particular
company, which causes loss to the purchaser company, the provisio
provisions
ns of the
Act need not be interpreted to suit them. The law is settled that a person who
is engaged in business has to be well versed with the provisions of law
including the time frame provided under the said provisions. Both the
companies, as asserted by the respondents, are engaged in business since
long and if they have committed an error, the law cannot be changed for
giving them any such benefit.
21. Keeping in view the law as settled by Hon'ble the Supreme
Court in Bharti Airtel's
Airtel's case (supra), we do not find any reason to follow the
view taken by Bombay High Court in Star Engineers (I) Private Limited
Limited's
's
case (supra) and the other judgments cited by learned counsel for the
petitioner.
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22. We accordingly reject the claim of the ppetitioner
etitioner for correction
of the return. The writ petition is found to be without any force and is
accordingly dismissed.
23. All pending applications stand disposed of.
24. No costs.
(SANJEEV PRAKASH SHARMA)
JUDGE
14.11.2024 (SANJAY VASHISTH)
vs JUDGE
Whether speaking/reasoned Yes/No
Whether reportable Yes/No
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