Madras HC in the case of M/s. Sun Dye Chem Versus The Assistant Commissioner

Case Covered:

M/s. Sun Dye Chem

Versus

The Assistant Commissioner

Facts of the Case:

The petitioner is a partnership firm, a registered dealer in terms of the provisions of the Tamil Nadu Goods and Service Tax Act, 2017 (in short ‘Act’). Regular returns of turnover are being filed computing the tax payable after setting off Input Tax Credit (ITC) as against the output tax liability. The ITC claimed is the cumulative amount of Central (CGST), State (SGST), and Intra-state (IGST).

Monthly returns were filed 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 the total credit in regard to the transactions – CGST, SGST, and IGST. There was however, an inadvertent error in reporting the credit in Form GSTR-1 in regard to the outward supplies and Intra-state sales had been erroneously reported as inter-state sales, as a result, the CGST and SGST credit was reflected in the IGST column.

The error was noticed by the petitioner when its customers brought to its notice the fact that the tax credit has been reflected in the IGST column instead of CGST/SGST columns posing a difficulty to the customers to avail the said credit.

Related Topic:
TN High Court Judgment. Form ‘C’ can not be denied for Inter state purchases of Petroleum products and Liquor & other Spirits.

Observations:

Undoubtedly, the petitioner in this case has committed an error in filing the details relating to credit. What should have figured in the CGST/SGST column has inadvertently been reflected in the ISGT column. It is nobody’s case that the error was deliberate and intended to gain any benefit, and in fact, by reason of the error, the customers of the petitioner will be denied credit which they claim to be legitimately entitled to, owing to the fact that the credits stand reflected in the wrong column. It is for this purpose, to ensure that the suppliers do not lose the benefit of the credit, that the present writ petition has been filed.

Admittedly, the 31st of March 2019 was the last date by which the rectification of Form – GSTR 1 may be sought. However, and also admittedly, the Forms, by the filing of which the petitioner might have noticed the error and sought amendment, viz. GSTR-2A and GSTR-1A are yet to be notified. Had the requisite Forms been notified, the mismatch between the details of credit in the petitioner’s and the supplier’s returns might well have been noticed and appropriate and timely action taken. The error was noticed only later when the petitioners’ customers brought the same to the attention of the petitioner

The decision of the Court:

In the absence of an enabling mechanism, I am of the view that 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 the statute.

This writ petition is allowed and the impugned order set aside. The petitioner is permitted to re-submit the annexures to Form GSTR-3B with the correct distribution of credit between IGST, SGST and CGST within a period of four weeks from date of uploading of this order and the respondents shall take the same on file and enable the auto-population of the correct details in the GST portal. No costs.

Related Topic:
Karnataka AAR Ruling in the case of Airbus Group India Private Limited

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