Karnataka HC: Allows rectification of GSTR-3B-return considering errors made in early stages of GST

Orient Traders vs The Deputy Commissioner of Commercial Taxes

Karnataka HC permits Assessee to rectify Form GSTR 3B return for July, 2017 and March, 2018, holds that allowing assessee to make such changes would neither cause any prejudice to the Revenue nor would it upset the chain of credit under the GST scheme; Pursuant to Revenue audit enquiries, the Assessee came to know about about certain inadvertent errors and mistakes during filing of returns for FY 2017-18 which led to mismatch between the GSTR-3B and GSTR2A forms; The error was attributable to claiming ITC relating to imports under Column No. 4A(5) instead of Column No. 4A(1); Because of such error, the Deputy Commissioner of Commercial Taxes (DCCT) in its audit report held that ITC accrued to assessee was liable to be disallowed and the said report lead to issuance of impugned SC; HC notes the problems faced by dealers across nation during  initial phase of GST introduction, including the time needed to adjust to the new system; In this vein, HC derives that ITC, which is admittedly available to assessee has been entered under the wrong column and for that, Revenue issued SCN even though the material on record discloses that said errors are entirely bona fide and inadvertent; HC also draws comparison between the facts of present case with that of Bharti Airtel, finds the latter as entirely different because in the instant case, “there cannot be said to be any cascading effect since the petitioner only seeks to shift the ITC already claimed from one head to another..”; Therefore, considering the facts of the case,  HC opines “a lenient view is required to be taken, particularly since the tax periods involved relate to the very first year of the GST regime” and “authorities must avoid a blinkered view while adjudicating/assessing the tax liability of a dealer under the Act”: