M/S Kamladityya Construction PVT LTD vs. The State Of Bihar

On facts it is to be noticed that the petitioner is a Private Limited Company engaged in construction work and registered as a works contractor under the Goods and Services Tax enactment. The petitioner’s concern is with the assessment year 2018-19, 2019-20 and 2020-21 when they have executed construction work in favour of the Industrial Development Authority (‘IDA’ for short) who is also subsequently impleaded as 8th respondent.

The petitioner had filed returns for the subject assessment years on the due date and had also discharged its tax liability. While filing the returns, as against the input tax credit, the petitioner had inadvertently shown the TDS number of the awarder who deducted tax from the payments due to the petitioner, in place of the awarder’s GST number. The mistake 3/7 has been explained by the petitioner through a tabular statement in the representation made on 23.08.2022 produced in the writ petition as Annexure-1. The correct GST number of the awarder was 10AAAJI0499M1Z6 in lieu of which, the TDS number of the awarder was shown, which is 10AAAJI0499M1DF. The input tax claim for the said assessment years were declined. The very same mistake had occurred in the next year i.e. 2021-22 which was rectified within time. The petitioner claims rectification for the earlier years also.

Mrs. Archana Sinha, learned Counsel for the petitioner points out that it was a human error and the same could be rectified. The learned Counsel would also rely on a Division Bench Judgment of the High Court of Jharkhand at Ranchi in WP(T) Nos. 2478 of 2021 dated 18.10.2022; the period stipulated; within which the petitioner did not approach the authorities.

The Division Bench of the Jharkhand High Court considered an almost similar matter, where the petitioner had sought for amendment to its GSTR-1. The assessee therein had sought for an amendment in GSTR-1 for the month of January-2019, wherein, a wrong GSTIN number was mentioned in the invoices raised on respondent no.

By a mistake the GSTIN number was of the petitioner’s own joint venture, for reason of which input tax credit was declined to the 5th respondent. Noticing the facts especially that of the input tax credit have been reflected in the portal of the Department in favour of the 6th respondent, which was rightly not claimed by the said respondent; it was directed that correction may be facilitated which does not cause any prejudice to the revenue on grounds of monetary loss and directed the portal to be opened for a limited period with communication to the petitioner and if that is not possible for technical reasons, to enable the petitioner to make such correction through manual mode.

The reliance on the digital mode is for expeditious and seamless completion of proceedings and it cannot lead to foreclosing of human intervention when it is expedient and imperative. The introduction of the digital mode should not only enable due assessment and recovery of taxes, 5/7 but also should ensure and facilitate the smooth business processes of the assesses. Unless the businesses are carried out, the State would not obtain its revenue and it is essential for such revenue collection that the assesses are also not put to difficulties because of technical issues of a venial nature; which if not possible of correction on the digital mode, then it should be made possible by human intervention. this is the spirit and tone of the judgment of the High Court of Jharkhand at Ranchi; which we respectfully follow.

Admittedly, the denial of input tax claim was only due to the wrong mentioning of GSTIN number; which has been established to be a bonafide mistake arising out of human error. The IDA who was the awarder and who deducted the tax and paid it to the department is also made a party, though subsequently, as the 8th respondent. We have heard learned Counsel for the 8th respondent, who admits that the deductions as pointed out by the petitioner were made by the IDA from the disbursement of amounts for the works contract carried out by the petitioner and paid over to the Department, for which the petitioner could make a valid claim for input tax credit. There would be no loss caused to the State and if the refund is not effected there is every chance of the petitioner’s company 6/7 closing down, considering the huge refund which would not be granted to the petitioner, putting the very business in doldrums. This is a peculiar and special circumstance in which, even if there can be no facilitation of an online rectification, it should be done physically and the amounts eligible for refund disbursed.

We make it clear that we have not specified the quantum of input tax credit nor does it go by the admission of the 8th respondent that deductions as pointed out by the petitioner were made from the proceeds of the contract and paid up to the State Government. The assessing officer would be entitled to look into the specific deductions claimed and verify it with the returns filed by the 8th respondent; specifically the tax deductions made at the source and enable the claim of refund which is possible under law.

We direct the petitioner to make a representation to the respondent authorities upon which, as directed by the High Court of Jharkhand at Ranchi, the respondent authority shall facilitate opening of the portal for a limited period, with due intimation given to the petitioner and if that is not possible allow the petitioner to make rectification on manual mode.

With the above directions, the writ petition stands allowed.