M/S Screenotex Engineers PVT LTD Through Its Director Hemantkumar Maneklal Patel vs. Commissioner Of CGST
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The writ applicants, M/s. Screenotex Engineers Pvt Ltd and its director, are registered under GST. The petitioner manufactures and exports textile capital machinery. The petitioner supplied two invoices (No. 122 dated 22/06/2019 and No. 125 dated 25/06/2019) for a total value of Rs. 53,12,655.00, which they contend are 'Deemed Exports' as per Section 147 of the CGST Act and relevant notifications. While filing GSTR-1 for June 2019, the petitioner inadvertently failed to tick the 'Deemed Export' column for these invoices. Upon realizing the error, the petitioner sought to amend the return. The department initially permitted amendments for some invoices, but the petitioner was only able to amend four out of nine. The petitioner is now before the High Court seeking to amend the remaining five invoices.
Held
The Court, in the peculiar facts and circumstances of the case, decided to grant the writ applicant one last opportunity to amend its GSTR-1 returns for the respective months in 2019 concerning the balance five invoices. The Court directed the respondents to process the request for amendment, specifically for ticking the 'Deemed Export' column, without subjecting it to the restriction provided in the proviso to Section 37(3) of the CGST Act, 2017. The respondents were granted liberty to undertake necessary verification with the recipient. The Court also directed that in case of any technical difficulty, the respondents, including GSTN, should make appropriate arrangements or accept the amendment request in physical form. The ratio decidendi is that in exceptional circumstances, and to prevent undue hardship, High Courts may direct tax authorities to permit amendments to returns beyond statutory timelines, especially when the error is inadvertent and the nature of the transaction (deemed export) is clearly established.
Key Issues
1. Whether the petitioner is entitled to an amendment of its GSTR-1 return for June 2019 to mark certain invoices as 'Deemed Export' despite the time limits prescribed under Section 37(3) of the CGST Act, 2017? The petitioner argued that the supplies were indeed 'Deemed Exports' as per Section 147 of the CGST Act, Rule 89(2)(g) of the CGST Rules, and relevant notifications, and the failure to tick the 'Deemed Export' column was an inadvertent mistake by their GST consultant. They relied on correspondence with the department highlighting the financial loss due to this issue. The revenue contended that the petitioner had already been permitted to amend some invoices and was now seeking to amend others beyond the permissible period, implying that the petitioner had accepted a mistake and was trying to rectify it belatedly. The revenue pointed to correspondence where the petitioner acknowledged a potential mistake but sought permission to amend the five invoices.
Sections Cited
Section 147, Rule 89(2)(g), Section 37(3), Section 37
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Cause title — parties, addresses and appearances
ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)
Since the issues raised in all the captioned writ applications are the same, those were taken up for hearing analogously and are being disposed of by this common order. For the sake of convenience, the Special Civil Application No.10367 of 2020 is treated as the lead matter.
By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following reliefs: “A. Your Lordships may be pleased to admit this petition; B. Your Lordships may be pleased to allow this petition; C. Your Lordships may be pleased to issue writ of mandamus C/SCA/9577/2020 ORDER DATED: 30/03/2022 or any other appropriate writ directing the respondent authorities to allow amendment in GSTR-1 return of Petitioner No.1 herein pertaining to the month of June 2019 so that ‘Deemed Export’ could be tick mark (√) in regard to Invoice No.122 dtd. 22/06/2019 and 125 dtd. 25/06/2019 respectively; D. Your Lordships may be pleased to grant an ex-parte, ad interim order in favour of the petitioner herein in terms of prayer clause ‘C’ hereinabove; E. Your Lordships may be pleased to grant such other and further relief(s) that may be deemed fit and proper in the interest of justice in favour of the Petitioner.”
The facts giving rise to this writ application may be summarized as under:
1 The writ applicant No.1 is engaged in the manufacture and export of textile capital machinery. Both the writ applicants are registered with the Goods and Service Tax Department and hold a GSTN Number. It is the case of the writ applicant no.1 that it had supplied a textile capital machine to the writ applicant No.
The details of the invoice under which the said machine was supplied to the writ applicant No.2 is tabulated below: Invoice No. Invoice Date Basic Value (Rs) CGST (Rs) SGST (Rs) Total Value (Rs) 122 22/06/19 24,76,237.50 2,22,861.38 2,22,861.38 29,21,960.00 125 25/06/19 20,26,012.50 1,82,341.13 1,82,341.13 23,90,695.00 TOTAL 45,02,250.00 4,05,202.51 4,05,202.51 53,12,655.00
2 The aforesaid supplies are ‘Deemed Export’ in accordance with Section 147 of the CGST Act read with Rule 89(2)(g) of the CGST Rules read with the Notification No.47/2017 dated 18.10.2017, Notification No.48/2017 dated 18.10.2017 and the Notification No.49/2017 dated 18.10.2017 and also as per the Director General Foreign Trade Policy 2015-20, Chapter – 7 (Deemed Export). It is the case of the C/SCA/9577/2020 ORDER DATED: 30/03/2022 writ applicant No.1 that although, the aforesaid supplies are ‘Deemed Export’ yet, while filing the return in the Form GSTR-1 on the portal of the Goods and Service Tax Department for the month of June 2019, inadvertently, the GST Consultant of the writ applicant No.1 missed to tick mark on the column of ‘Deemed Export’ in the said return in regard to the aforesaid invoices.
3 Having realized its mistake, the writ applicant No.1 tried to rectify the same by amending the Form GSTR – 1. It appears that the request to amend was initially granted and out of nine bills, the writ applicant No.1 was in a position to amend four bills. The dispute between parties arose at this stage.
4 It is the case of the respondents that although, the writ applicant No.1 was permitted to amend all the nine bills yet, he was able to amend only four bills. According to the department, it is now not permissible for the writ applicant to once again seek permission to amend those five bills which the writ applicant No.1 could have amended at the relevant point of time. In such circumstances referred to above, the writ applicant is here before this Court with the present writ application.
We have heard Mr. D.K. Trivedi, the learned counsel appearing for the writ applicants and Mr. Priyank Lodha, the learned Standing Counsel appearing for the respondents.
At the outset, Mr. Trivedi, invited the attention of this Court to page 31 of the paper book. The documents at page 31 are the e-mail correspondence between the writ applicant No.1 and the department. In one of the correspondence, the writ C/SCA/9577/2020 ORDER DATED: 30/03/2022 applicant No.1 seems to have informed that it was not getting appropriate feedback with respect to the amendment of the bills and the same was leading to a huge financial loss.
As against the aforesaid, Mr. Lodha, immediately invited the attention of this Court to page 30 of the paper book. At page 30, again there is correspondence between the writ applicant and the department wherein the writ applicant No.1 has accepted that there could be a mistake on its part however, the writ applicant No.1 tried to pursued the department to permit him to amend the five invoices.
Section 37 of the GST Act is with respect to the furnishing of details of the outward supplies. In accordance with Section 37 of the Act every registered person other than an input service distributor, a non resident taxable person and a person paying tax under the provisions of Section 10, Section 51 or Section 52 respectively, is obliged to furnish electronically in such form and manner the details of the outward supplies of goods or services or both effected during a tax period on or before the tenth day of the month succeeding the said tax period. Such details are to be communicated to the recipient of the said supplies within such time and in such manner that may be prescribed.
What is relevant for our purpose is sub section (3) of Section 37, which reads thus: “37(3) Any registered person, who has furnished the details under sub-section (1) for any tax period and which have remained unmatched under section 42 or section 43, shall, upon discovery of any error or omission therein, rectify such error or omission in such manner as may be prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on account of such error or omission, in the return to be furnished for such tax period: C/SCA/9577/2020 ORDER DATED: 30/03/2022 Provided that no rectification of error or omission in respect of the details furnished under sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of September following the end of the financial year to which such details pertain, or furnishing of the relevant annual return, whichever is earlier.”
We are not getting into the controversy whether there was any mistake on the part of the writ applicant No.1 so far as the GSTR-1 is concerned. The department permitted the writ applicant No.1 to amend the GSTR-1 with respect to all the nine invoices however, for some reason or the other, the writ applicant No.1 was in a position to amend only four such invoices. He is here before this Court as he is not able to amend the remaining five. There is a controversy whether those five invoices could have also been amended in the first instance or not.
Be that as it may, in the peculiar facts and circumstances of the case, we are inclined to grant one last opportunity to the writ applicant to get his GSTR-1 with respect to all the five invoices amended for one last time.
The Respondents are directed to process the request of the writ applicant No. 1 for carrying out amendment in its GSTR -1 returns pertaining to the respective months in 2019 in all the aforesaid writ petitions with respect to ticking of the ‘Deemed Export’ column in regard to the balance 5 invoices, which the writ applicant did not amend in the first request, however, the respondents are granted liberty to undertake necessary exercise to verify the same with the recipient as well;
The writ applicants shall undertake such exercise as is required post the amendment of the GSTR – 1 with respect to C/SCA/9577/2020 ORDER DATED: 30/03/2022 revised filing of any compliance under the Act; and 13. The Respondents are directed to process the request of the writ applicant for amendment without subjecting it to the restriction given in the proviso to Section 37 (3) of the CGST Act, 2017. Further, in case of any technical difficulty in executing the aforesaid directions, the Respondents including the GSTN Network shall, either make appropriate arrangements in that regard or shall accept the request for amendment of the writ applicant No. 1 in physical form for further process.
With the aforesaid, all the three writ applications stand disposed of.
Direct service is permitted. (J. B. PARDIWALA, J) (NISHA M. THAKORE,J) NEHA
Reproduced from the public record of the Gujarat High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.