HC: Tax Credit Can’t Be Refused on the Basis of GSTR 3B & 2A Mismatch When GSTR 2A Not Operational

The supply of machinery, mechanical appliances, parts, etc including the erection, commissioning, and installation is being supplied by the applicant. The GST returns in Form GSTR 3B for the FY 2017-18 (for short, “the FY”) would have been submitted by the applicant. Asking for the books of accounts for conducting the desk audit and rendering the attendance of the applicant, the first respondent has provided the notice to the applicant, dated 20th January 2021.

An answer is been furnished by the applicant to the observations incurred in the inquiry of the audit. The applicant who has filed his return observed that there has an accidental error and mistakes were placed during the filing of his returns for the fiscal year 2017-18. Input Tax Credit (for short “ITC”) has been claimed for the imports under Integrated Goods and Services Tax, (for short “IGST’) in July 2017 and March 2018 because of oversight and inadvertence in Column No. 4A(5) rather than claiming the same under Column No. 4A(1), the petitioner observed. The mistake did through the applicant understand that it accidentally acknowledged the import IGST related to July 2017 as local IGST and import IGST referred to March 2018 as local CGST and SGST. ITC which had accrued to the applicant was responsible to get disallowed as witnessed by the first respondent DCCT in its audit because of the error in inserting the numbers in the incorrect column which gives the outcome of the mismatch between the GSTR-3B and GSTR-2A forms.

Applicants Opinion

• Other than repeating diverse contentions requested by the applicant pertaining to the material on record, for the applicant, a senior counsel furnished that while filing the returns errors emerged during the developing phases of the GST regime, that were made applicable from the date 1/07/2017 and in the indirect tax regime there was a quantum revision that needs filing of returns to revamp including a diverse format, as per that smaller and inadvertent glitches like those done via applicant were bonafide at all and in that case, a moderate view would be certified, at the same phase especially since the revamp of errors does not yield any revenue loss nor shall there be any cascading effect which shall make the GST scheme unsettled.
• The said senior counsel furnished that till the govt functioned the legal return beneath Form GSTR 2, 2A, and 3 as mentioned under the GST act for the Fiscal year 2017-18 filing of the returns via forms GSTR-3B was merely the stop-gap measure as specified beneath the GST act and that the auto-fill facility/auto-setter process that auto-populates details into Form GSTR 3B and GSTR 2B were merely available from the date 4/9/2020 and before that the dealers would need to insert the payable GST in a manual way in the GST portal that contains the technical and electronic issues.
• He added, on the ICE-GATE portal which has been maintained through the customs department, Government of India, the information of the IGST concerned with the imports would be readily available and that the officers directed to that in the lack of GSTR 2-A towards all the months excluding July 2017 and March 2018 that is the months of commitment of errors. The revenue would need to consider beyond the returns furnished during adjudicating on the liability of the applicant and acknowledge the more holistic view witnessing to the books of accounts apart from the legal forms like ICE-GATE and others. He stated the same shall be transparently evident that the applicant would have gone within the bona fide error if the officers were to perform that moreover the same shall be qualified to claim the disputed ITC amount.

Department Opinion for the Case

While at present the applicant could not, at this belated stage, be allowed to correct the glitches that it has incurred in view of Section 39(9) of the CGST / KGST Act, stated by the AGA for the respondents beyond repeating diverse contentions requested in the statement of objections. He indeed trusts the current ruling of the Hon’ble Supreme Court in the case of Union of India v. Bharti Airtel Ltd.,& others – (2021) 13 SCALE 301, the taxpayer’s petition was denied by the Supreme court and there to amend its returns above the statutory duration specified under Section 39(9) of the Act. He argued to revise its returns there is no process that exists to facilitate the applicant to revise its returns in this belated phase, the appeal is accountable to get dismissed.