Bharti Airtel Limited VS Union Of India

Bharti Airtel Limited, referred to as the Petitioner, has filed a petition under Article 226 of the Constitution of India. In this petition, they challenge various aspects of the Goods and Services Tax (GST) regime, specifically targeting Rule 61(5) of the GST Rules, Form GSTR-3B, and Circular No. 26/26/2017-GST issued on 29th December 2017 (referred to as the ‘impugned circular’). The Petitioner argues that these provisions are ultra vires the Central Goods and Services Tax Act, 2017 (CGST Act), and they violate Articles 14, 19, and 265 of the Constitution of India.

The crux of the challenge lies in the contention that the Petitioner is being unfairly prevented from rectifying errors in their monthly GST returns, which consequently hinders their ability to claim refunds for any excess tax paid. This legal action highlights the Petitioner’s dissatisfaction with the current regulatory framework surrounding GST compliance and refund mechanisms.

Bharti Airtel Limited, referred to as the petitioner, has filed a petition under Article 226 of the Constitution of India challenging Rule 61(5) of the GST Rules, Form GSTR-3B, and Circular No. 26/26/2017-GST (the ‘impugned circular’) dated 29th December 2017. The petitioner argues that these provisions are ultra vires the Central Goods and Services Tax Act, 2017 (CGST Act) and contrary to Articles 14, 19, and 265 of the Constitution of India.

The crux of the challenge lies in the petitioner’s inability to correct its monthly GST returns and seek refunds of excess payments due to the mentioned provisions. To understand the complexities, it’s necessary to delve into the factual background and the statutory framework of GST filings.

Bharti Airtel Limited operates in the telecommunications sector across India, including Delhi, under a license granted by the Department of Telecommunication, Government of India. With the introduction of GST, the company obtained registrations in each State and Union Territory, totaling 50 registrations, for complying with CGST, SGST, and IGST payments. The transition from the centralized registration system under the previous service tax regime to multiple registrations under GST necessitated significant technical adjustments, including the adoption of electronic filing through Forms GSTR-1, 2, and 3.

However, the government faced challenges in operationalizing Forms GSTR-2 and 3, leading to the introduction of a summary scheme via Form GSTR-3B. The petitioner asserts that this interim measure by the government was inadequate, resulting in the failure of the system to detect errors over time, culminating in the current predicament faced by the petitioner.

The petitioner contends that the inability to rectify errors in GST returns and claim refunds is unjust, given the circumstances originating from the deficiencies in the GST filing system. Therefore, the petition aims to challenge the legality and constitutionality of the mentioned provisions, asserting violations of fundamental rights enshrined in the Constitution of India.

In summary, Bharti Airtel Limited’s petition under Article 226 seeks to redress the obstacles it faces in correcting GST returns and obtaining refunds, attributing these challenges to deficiencies in the GST filing system and asserting violations of constitutional right.

Bharti Airtel Limited, hereinafter referred to as the Petitioner, has filed a petition under Article 226 of the Indian Constitution challenging Rule 61(5) of the GST Rules, Form GSTR-3B, and Circular No. 26/26/2017-GST, dated 29th December 2017, on grounds of being ultra vires the Central Goods and Services Tax Act, 2017 (CGST Act) and contrary to Articles 14, 19, and 265 of the Constitution.

The crux of the challenge lies in the Petitioner’s inability to correct its monthly GST returns and claim refunds due to the restrictive provisions mentioned. To understand this, it’s essential to delve into the case’s context, the statutory framework of GST filings, and the circumstances leading to this situation.

Bharti Airtel Limited operates in telecommunication services across India, including Delhi, under licenses granted by the Department of Telecommunication, Government of India. With the introduction of GST, it obtained registrations in each state and union territory, totaling 50 registrations under GST laws to fulfill CGST, SGST, and IGST obligations. Transitioning from a centralized registration system under the previous service tax regime to multiple registrations under GST necessitated technical adaptations to comply with the new laws, including changes for filing statutory Forms GSTR-1, 2, and 3.

However, due to the government’s inability to operationalize Forms GSTR-2 and 3, a summary scheme, Form GSTR-3B, was introduced. The Petitioner argues that this incomplete step led to the system’s failure in detecting errors over time, resulting in its current predicament.

During the initial phase of the GST regime, Bharti Airtel Limited faced challenges with the Goods and Services Tax Network (GSTN) portal’s electronic system, which was ill-prepared for the transition from the previous tax regime to GST. This transition phase saw numerous issues affecting tax payments, output liability, and Input Tax Credit (ITC), leading to inadvertent errors such as missed invoices, overlooked credit notes, misreporting of transactions, and filing of NIL Form GSTR-3B despite actual tax liability.

The Petitioner’s primary grievance stems from the period between July 2017 and September 2017 (the relevant period), during which it recorded ITC estimates in its monthly GSTR-3B. Consequently, when discharging GST liability for the relevant period, the actual ITC details were unknown, forcing the Petitioner to pay taxes in cash despite available ITC not reflected in the system. The precise ITC details for the relevant period only surfaced in October 2018 when Form GSTR-2A for past periods became operational, revealing underreported ITC.

The Petitioner alleges excess tax payments in cash during the relevant period due to these discrepancies, seeking redress through the petition.

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