Yokohama India Private Limited vs State of Telangana

1. Heard Ms. K.Rajya Lakshmi, learned counsel for the petitioner; Mr. K.Raji Reddy, learned Senior Standing Counsel for Commercial Tax appearing for respondents No.1 to 3; and Mr. Swaroop Oorilla, learned counsel for respondent No.6 i.e., GST Council.

2. By filing this writ petition under Article 226 of the Constitution of India, petitioner seeks a direction to the respondents to allow amendments in the GSTR-1 form filed for the period January, 2018 to August, 2018 so as to correctly reflect the input tax credit as well as the output tax liability of the petitioner.

3.Petitioner is a private limited company incorporated under the Companies Act, 1956. It is engaged in the business of manufacture and sale of passenger car tyres with a manufacturing facility in the State of Haryana. Following enactment of the Central Goods and Services Tax Act, 2017 (briefly, ‘the CGST Act’ hereinafter) and the related laws, petitioner got itself registered under the Goods and Services Tax (GST) regime in the State of Telangana.

4. Petitioner has been submitting its GST returns timely. During the period from January, 2018 to August, 2018 it had shown supplies to one of its distributors M/s. Bade Miyan Wheels. However, in the GSTR-1 form submitted by the petitioner for the aforesaid period, the details of the distributor were wrongly mentioned. It was a bona fide mistake whereby the name of the distributor was mentioned as M/s. Hyderabad Service Station instead of M/s. Bade Miyan Wheels. Because of the aforesaid error, the distributor – M/s. Bade Miyan Wheels, is not able to utilise the input tax credit for the said purpose which is being reflected in the GSTR-2A forms of M/s.Hyderabad 3 Service Station. Because of the above, the distributor had not paid amount due to the petitioner equivalent to the input tax credit because of the wrong entity which would be to the tune of Rs.11,68,456.00.

5.To enable the petitioner to rectify the mistake, a representation was submitted before respondent No.2 on 15.03.2021 with a reminder on 07.07.2021. No decision was taken by the aforesaid respondent. However, the time prescribed under the provisions of the CGST Act for rectification of errors for the returns covering the period January, 2018 to March, 2018 had expired on 31.03.2019; and for the months of April, 2018 to August, 2018 on 30.09.2019. It is in such circumstances that the related writ petition came to be filed seeking the reliefs as indicated above.

6.Though respondents have not filed counter affidavit, an objection was raised in the hearing on 18.10.2022 that in terms of Section 39(9) of the CGST Act as well as of the 4 Telangana Goods and Services Tax Act, 2017 (briefly, ‘the TGST Act’) which are in pari materia, the period for rectification of any omission or incorrect particulars is over. Reliance was placed on a decision of the Supreme Court in Union of India v. Bharti Airtel Ltd1. Learned counsel for the petitioner sought for time to examine the aforesaid decision. Accordingly, the matter has been listed today. Relevant portion of the order dated 18.10.2022 reads as under:

“By filing this writ petition under Article 226 of the Constitution of India, petitioner seeks a direction to respondent No.1 to allow the petitioner to carry out amendments in the GSTR-1 returns filed by it during the period January, 2018 to August, 2018 to correctly reflect the Input Tax Credit (ITC) to which it is entitled. In this connection, petitioner had submitted a representation on 15.03.2021 to the GST Officer, Telangana. 

In the hearing today, learned counsel for respondent No.6 has referred to Section 39(9) of the Telangana Goods and Services Tax Act, 2017 and submits that as per the proviso to the aforesaid section, rectification of any omission or incorrect particulars can be allowed after due date for furnishing of the return for the month of September or the second quarter following the end of the financial year. He has also placed reliance on a decision of the Supreme Court in Union of  India vs. Bharti Airtel Ltd. (2021 (54) G.S.T.L. 257 (S.C)) wherein Supreme Court has negatived a similar request on the ground that acceding to such a request would be contrary to the statutory mandate.

Learned counsel for the petitioner seeks time to go through the decision of the Supreme Court in Union  of India (supra). List as part-heard matter high on board on 31.10.2022.”

7.Learned counsel for the petitioner submits that petitioner had represented before the respondents for rectification of omission/incorrect particulars. However, the same was not considered by the authorities. It is under such circumstances that the present writ petition came to be filed. She has distinguished the decision of the Supreme Court in Bharti Airtel Ltd., (supra) and instead submits that her case is squarely covered by the decision of the Gujarat High Court in Siddharth Enterprises v.  Nodal Officer2. She has also placed reliance on a Single Bench decision of the Madras High Court in M/s. SUN  DYE CHEM v. The Assistant Commissioner (ST)  (W.P.No.29676 of 2019, decided on 06.10.2020).

8.n the other hand, Mr. Swaroop Oorilla, learned counsel for respondent No.6 has referred to sub-section (9)of Section 39 of the CGST Act and submits that legislature has consciously prescribed the limitation period to enable a taxable person to claim rectification of any omission/incorrect particulars. Once the limitation period is over, it is not open for the taxable person to continue seeking rectification of omission/incorrect particulars. He submits that while such limitation period as regards claim of the petitioner is concerned, expired on 31.03.2019 and 30.09.2019 respectively but the representations came to be filed much later on 15.03.2021 and 07.07.2021 which could not have been considered by the respondents. He therefore submits that the writ petition is thoroughly misconceived and is liable to be dismissed. Referring to the decision of the Madras High Court in M/s. SUN DYE CHEM (supra), learned counsel for respondent No.6 submits that in the said decision, learned Single Judge ofthe Madras High Court did not consider the effect of sub section (9) of Section 39 of the CGST Act.

9. Submissions made by learned counsel for the parties have been considered.

10.As can be seen from the above, facts are not in dispute. What is in controversy is the entitlement of the petitioner at this stage to claim rectification of omission/incorrect particulars in the GSTR-1 form filed by the petitioner for the period January, 2018 to August,

11. Section 39 of the CGST Act as well as the TGST Act deals with furnishing of returns. As per sub-section (1) thereof, every registered person other than an input service distributor or a non-resident taxable person etc., for every calendar month or part thereof, furnish a return electronically of inward and outward supplies of goods and services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed. Sub-section (9) provides that if after furnishing such return a registered person discovers any omission or incorrect particulars other than as a result of scrutiny, audit etc., he shall rectify such omission or incorrect particulars in such form and in such manner as may be prescribed, subject to payment of interest etc. The proviso says that no such services or both, input tax credit availed, tax payable, tax paid and such other particulars, in such form and manner, and within such time, as may be prescribed. Sub-section (9) provides that if after furnishing such return a registered person discovers any omission or incorrect particulars other than as a result of scrutiny, audit etc., he shall rectify such omission or incorrect particulars in such form and in such manner as may be prescribed, subject to payment of interest etc. The proviso says that no such ectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year to which such details pertain or the actual date of furnishing of relevant annual return, whichever is earlier. In other words, such rectification could be carried out after the due date for furnishing of return up to the following month of September.

12.Insofar the Gujarat High Court decision in Siddharth  Enterprises (supra) is concerned, there is no dispute to the  roposition that denial of credit of tax/duty paid under existing enactments would amount to violation of Articles 14 and 300A of the Constitution of India. Unutilized credit is a vested right and property in terms of Article 300A of the Constitution of India. Question is whether such right can be exercised at any given point of time or would stand extinguished after the limitation provided by the statute itself. The said question has to be examined in the light of the petitioner furnishing incorrect particulars while filing GSTR-1 form.

13.Insofar decision of the Madras High Court in M/s. SUN DYE CHEM (supra) is concerned, we find from a deliberation thereon that Madras High Court proceeded on the basis that the consequential GSTR-2A form rectifying such omission/incorrect particulars was yet to be notified. Further, learned Single Judge of the Madras High Court did not examine the limitation introduced by the statute under sub-section (9) of Section 39 of the CGST Act to rectify omission/errors in GSTR-1 form.

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