Nivriya INDIA Private Limited vs. Assistant Commissioner Of State Tax, Berhampore Charge And Ors.

Held

The Court held that the petitioner should be permitted to rectify the inadvertent error in their GSTR-1 filings for October and November 2022. The Court found that the mistake was genuine and came to light when the refund application was partly allowed, which prevented the petitioner from using the portal for rectification. The Court noted that the State respondents and Customs authorities acknowledged the genuine nature of the mistake. Following the precedent set by the Division Bench in Abdul Mannan Khan v. The Goods and Services Tax Council & Ors., which itself relied on decisions from the Orissa and Madras High Courts (M/s. Y. B. Construction Pvt. Ltd. and M/s. Sun Dye Chem), the Court reasoned that an assessee should not be prejudiced from availing credit they are legitimately entitled to, especially in the absence of an effective enabling mechanism for correction. The ratio decidendi is that genuine human errors in GST returns, which do not intend to gain undue benefit and are discovered when rectification mechanisms are unavailable or ineffective, should be allowed to be corrected to prevent prejudice to the assessee's legitimate claims. The Court directed the petitioner to resubmit the corrected GSTR-1 Form manually to respondent no. 3 (GSTN) within three weeks, and respondent no. 3 was directed to receive it manually and facilitate its uploading to the web portal. The State respondents were also directed to take follow-up steps to ensure the petitioner could avail credit for the five export invoices. The petitioner was also directed to clear any applicable taxes and interest.

Facts

The petitioner, Nivriya India Private Limited, engaged in exporting minerals, inadvertently marked five export invoices in their GSTR-1 for October and November 2022 as 'without payment of IGST' instead of 'with payment of IGST'. The GSTR-3B for the same period correctly reflected the payment of IGST. The error was discovered when the petitioner's refund application was partly allowed on July 6, 2023. The petitioner made representations to the State respondents on December 18, 2023, and March 19, 2024, seeking to rectify the GSTR-1. The State respondents, by orders dated December 19, 2023, and March 27, 2024, stated they lacked the competence to allow portal access for corrections as they had no control over the common portal. The Customs authorities, in a communication dated March 18, 2024, acknowledged the apparent mistake in GSTR-1 filing. Following a court order on August 19, 2024, the State respondents submitted on September 3, 2024, that they did not question the petitioner's intent but reiterated their lack of portal control. GSTN (respondent no. 3) was not represented. The petitioner relied on a previous High Court Division Bench judgment in Abdul Mannan Khan v. The Goods and Services Tax Council & Ors.

Key Issues

1. Whether the petitioner should be permitted to rectify the inadvertent error in filing GSTR-1 for October and November 2022, specifically regarding the classification of export invoices as 'without payment of IGST' instead of 'with payment of IGST', given that IGST was paid and the GSTR-3B reflected the correct position? (Question of mixed law and fact, turning on the interpretation and application of relevant GST provisions concerning rectification of returns and the principles of natural justice). Petitioner's arguments: The petitioner argued that the mistake was a genuine human error, not deliberate, and that they should not be denied the credit they are legitimately entitled to, especially since IGST was paid. They relied on the Division Bench judgment in Abdul Mannan Khan v. The Goods and Services Tax Council & Ors., where similar relief was granted in identical circumstances, allowing the assessee to correct GSTR-1. They emphasized that the error was noticed only after the refund was partly processed and that the lack of an enabling mechanism on the portal prevented timely correction. Revenue/State's arguments: The learned advocates for the respondents did not dispute the genuineness of the mistake committed by the petitioner. Their primary contention, as previously stated, was that they lacked the competence to permit the petitioner to access the portal for effecting corrections due to no control over the common portal.