The Supreme Court of India, in the matter of Union of India vs Brij Systems Ltd., dismissed the Special Leave Petition filed by the Union Government, citing its prior dismissal of a similar case (Central Board of Indirect Taxes and Customs v. M/s Aberdare Technologies Private Limited and Ors.). However, recognizing the broader implications regarding the rectification of clerical or arithmetic errors in Input Tax Credit (ITC) claims, the Court took cognizance of the prevalent practice of denying rectifications beyond the statutory timelines defined under Sections 37(3) and 39(9) of the Central Goods and Services Tax Act, 2017.
The Court acknowledged the administrative rigidity, which has resulted in genuine errors going unrectified, adversely impacting purchasers due to denial of ITC. To address this systemic issue, the Supreme Court issued a notice to the Central Board of Indirect Taxes and Customs (CBIC), underscoring the need for procedural clarity and flexibility in rectifying genuine clerical or arithmetic errors. Furthermore, the Court appointed Senior Advocate Arvind P. Datar as Amicus Curiae to assist in finding a balanced resolution, thus indicating the importance and complexity of the issue.
This judgment reflects judicial acknowledgment of practical difficulties faced by taxpayers under GST, aiming towards a solution-oriented approach that ensures fairness in tax administration.