Summary
The Court rejected a taxpayer’s request to revise its July–September 2017 GSTR-3B returns to substitute unused input tax credit for cash already paid. Under the statutory scheme then applicable, errors were rectifiable in the return for the period when noticed. GSTR-3B was a return under Section 39, and the challenged circular correctly reflected that mechanism. Non-operation of GSTR-2A did not relieve the taxpayer of self-assessment from its own records. The High Court’s permission to revise the earlier returns was set aside.
Issues
- Whether the taxpayer could revise earlier GSTR-3B returns to replace cash payment with input tax credit.
- Whether paragraph 4 of Circular 26/26/2017-GST conflicted with the statutory rectification mechanism.
Provisions considered
- Section 39(9), Central Goods and Services Tax Act, 2017Under the law applicable to the disputed period, omissions or incorrect particulars were to be corrected in the return for the month or quarter when noticed, subject to statutory conditions. (¶¶ 24, 37, 39, 44, 46, 47)
- Rule 61(5), Central Goods and Services Tax Rules, 2017GSTR-3B constituted a statutory return despite its initial introduction as a stopgap arrangement; the validity of the retrospective amendment was not challenged. (¶¶ 14, 38, 39, 40, 41)
- Paragraph 4, Circular No. 26/26/2017-GST dated 29 December 2017The prescribed adjustment mechanism was consistent with the Act and Rules and required no reading down. (¶¶ 11, 31, 37, 50)
Held
- The Delhi High Court had jurisdiction over this challenge to a central policy decision. Non-joinder of States and Union Territories did not defeat the petition, and the circular notified a decision within the Board’s statutory authority. (¶¶ 30, 31)
- Self-assessment depended primarily on the taxpayer’s invoices, accounts and records. GSTR-2A facilitated that task; its non-operation did not justify the requested substitution of credit for cash on these facts. (¶¶ 32, 33, 34, 35, 36, 46)
- GSTR-3B was a return governed by Section 39 and Rule 61. The contrary view in AAP & Co. was not accepted; the subsequent retrospective amendment reinforced this conclusion, although its validity was not in issue. (¶¶ 38, 39, 40, 41)
- The statutory correction mechanism concerned the return for the period when the error was noticed, rather than reopening the return for the original period. There was no express authority for the unilateral swapping of cash and credit entries sought here. The credit remained available for subsequent utilisation, so rejection did not forfeit it. (¶¶ 37, 43, 44, 47, 48)
- Cases concerning inability to access the portal or submit transitional-credit forms were distinguishable from this request to reverse an earlier choice of payment mode. Paragraph 4 of the circular conformed to the governing provisions and the High Court’s contrary direction could not stand. (¶¶ 42, 43, 44, 45, 50, 51)
Result
Appeal allowed; High Court judgment set aside and the taxpayer’s writ petition dismissed. No order as to costs; applications disposed of.