Hindustan Construction Company Ltd. allowed to correct bona fide errors in GSTR-3B returns for initial GST implementation phase
In a landmark judgment, the Karnataka High Court has ruled in favor of Hindustan Construction Company Ltd., allowing the company to rectify errors in its GSTR-3B returns for the period from July 2017 to March 2018. The judgment, delivered by Justice S.R. Krishna Kumar, emphasized the importance of adopting a justice-oriented approach in handling cases of bona fide errors, particularly during the nascent stage of GST implementation.
The petitioner, Hindustan Construction Company Ltd., had initially declared certain transactions incorrectly in its GST returns, which were submitted during the early months following the introduction of the Goods and Services Tax (GST) regime in India. The company later discovered these errors and sought permission to correct them, arguing that the mistakes were inadvertent and did not result in any revenue loss to the government.
Despite technical challenges, the Karnataka High Court recognized the genuine nature of the errors and directed the respondents, including the Union of India and state GST authorities, to facilitate the corrections either online or manually. Justice Kumar distinguished this case from the Supreme Court's earlier decision in Union of India v. Bharti Airtel Ltd., noting that the present case involved corrections that would not lead to cascading effects or revenue loss.
The judgment underscores the court's view that GST authorities should avoid a rigid approach and instead focus on fostering a taxpayer-friendly system that minimizes unnecessary litigation. By allowing corrections for bona fide errors, the court aims to uphold the principles of justice and equity in the implementation of GST laws.
This decision is expected to set a precedent for similar cases, encouraging GST authorities across India to accommodate genuine mistakes made by taxpayers during the early stages of GST implementation. The ruling also highlights the need for a flexible and understanding approach in the dynamic and evolving GST landscape.
Bottom Line:
GST Law - Errors in GSTR-3B returns - Taxpayer entitled to make corrections in GSTR-3B for the period of July 2017 to March 2018, especially when the errors are bona fide and there is no revenue loss to the government.
Statutory provision(s): Section 73(1) of KGST Act, Section 39(9) of CGST/KGST Act
Hindustan Construction Company Ltd. v. Union of India, (Karnataka) : Law Finder Doc Id # 2822472
