The Hon’ble Madras High Court in the case of M/s. Sun Dye Chem v. The Assistant Commissioner [W.P. No. 29676 of 2019 dated November 6, 2020] has held that absence of enabling provision cannot jeopardize taxpayer from availing credit that they are entitled to, while allowing them to rectify and correct Form GSTR-1 for the period August 2017 to December 2017 and redistribute the credit available from Integrated Goods and Services Tax (IGST) column to Central Goods and Services Tax (CGST) and State Goods and Services Tax (SGST) fields.
Brief Facts of the Case
- Petitioner’s Case
The Petitioner, M/s Sun Dye Chem filed the monthly return for the period August 2017 to December 2017 in the GST portal in Form GSTR-3B. The returns were accompanied by annexures in Form GSTR-1 that reflected CGST, SGST and IGST. There was however, an inadvertent error in reporting in Form GSTR-1 in regard to the outward supplies and as a result, Intra-state sales had been erroneously reported as inter-state sales. This resulted in the CGST and SGST credit being reflected in the IGST column at customer end. This was brought to the notice of Petitioner by customers as they had difficulty in availing credits. The petitioner submitted a request for amendment of Form GSTR-1 that came to be rejected on August 12, 2019 on the ground that there was no provision to grant the amendment sought, in any event, not after March 31, 2019 as Notification 71/2018 had extended the time for submission of the amended GSTR-1 till March 31, 2019, for the period 2017-18. The petitioner was thus unable to correct the error.
- Stand of the Respondents
The respondents in their Counter Affidavit, referred to Sections 37, 38 and 39 relating to the furnishing of details of outward and inward supply and filing of returns, as well as the procedure to be followed in this regard. It was argued that the time for amendment of the details of outward supply stood extended only till March 31, 2019. The petitioner, however approached the Officer only on August 16, 2019 seeking rectification of the errors occasioned during the period between October and December 2017. The officer was thus handicapped and could not grant the relief as sought for in the absence of an enabling provision.
Analysis By the Hon’ble Court
The Hon’ble High Court noted that a registered person who files a return under Section 39(1) involving intra-State outward supply is to indicate the collection of taxes customer-wise in monthly return in Form GSTR-1 and the details of tax payment therein are auto populated in Form GSTR -2-A of the buyers. Any mismatch between Form GSTR-1 and Form GSTR-2A is to be notified by the recipient by way of a tabulation in Form GSTR-1A. However till date forms in GSTR-2A and GSTR-1A are yet to be notified meaning the statutory procedure contemplated for seamless availment has been as on date, unavailable.
Ruling of the Hon’ble High Court
The Hon’ble High Court held that inn the absence of an enabling mechanism, assessees should not be prejudiced from availing credit that they are otherwise legitimately entitled to. The error committed by the petitioner is an inadvertent human error and the petitioner should be in a position to rectify the same, particularly in the absence of an effective, enabling mechanism under statute.
Consequently the Hon’ble High Court allowed the Writ Petition of the petitioner and set aside the impugned order permitting the Petitioner to re-submit the annexures to Form GSTR-3B with the correct distribution of credit between IGST, SGST and CGST.
Read the Order at: Sun-Dye-Chem-Vs-The-Assistant-Commissioner-ST-Madras-High-Court..