ITC Cannot Be Denied For Bona Fide GSTIN Reporting Mistake: Tripura High Court

The Tripura High Court on 27 July held that a taxpayer cannot be denied Input Tax Credit (ITC) due to a genuine mistake in reporting invoices under the wrong Goods and Services Tax Identification Number (GSTIN), when the error does not result in any loss of revenue to the Government.

A Division Bench comprising Chief Justice M.S. Ramachandra Rao and Justice Biswajit Palit allowed the writ petition filed by Ashutosh Bandyopadhay and directed the GST authorities to permit rectification of Forms GSTR-1 and GSTR-3B for the period from 1 May 2019 to 5 February 2020, either through the online portal or through manual means, within four weeks. It held:

“..there is only the issue of filing of the invoices in the correct GSTIN. Instead of filing it in the regular GSTIN, the petitioner had filed it in the wrong GSTIN i.e. GST TDS GSTIN. There is no loss of revenue to the respondents at all...”

The dispute arose after the taxpayer inadvertently uploaded invoices under its GST Tax Deduction at Source (TDS) GSTIN instead of its regular GSTIN while filing GST returns. Although the invoices were verified by the department and the taxes had been paid, the taxpayer could not pass on the ITC as the invoices were reflected against the incorrect GSTIN.

The taxpayer sought rectification of the error, but the GST authorities rejected the request, stating that entries submitted on the GST portal could not be altered and that jurisdictional officers had no authority to modify the returns.

Rejecting the department's stand, the High Court relied on the Bombay High Court's decisions in Star Engineers (I) Pvt. Ltd. v. Union of India and Aberdare Technologies Pvt. Ltd. v. Central Board of Indirect Taxes & Customs, which recognised that bona fide human errors in GST return filings should be permitted to be corrected.

It observed that the case involved only an incorrect reporting of invoices under the GST TDS GSTIN instead of the regular GSTIN and that the mistake did not cause any loss of revenue to the Government. It held that the department's contention that entries made on the GST portal could not be corrected was no longer sustainable in view of the binding judicial precedents.

The Bench also referred to the retrospective insertion of Section 16(5) of the Central Goods and Services Tax Act, 2017 (which relaxes the time limit for claiming ITC for certain financial years) by the Finance (No. 2) Act, 2024, with effect from 1 July 2017. It observed that Parliament had itself relaxed the timelines for availing ITC for financial years 2017-18 to 2020-21 and that the taxpayer's claim for the financial year 2019-20 was covered by the amended provision.

Accordingly, the High Court directed the GST authorities to allow the taxpayer to amend or rectify Forms GSTR-1 and GSTR-3B for the relevant period within four weeks.

For the Petitioner: Mr. Somik Deb, Senior Advocate, Ms. Rinku Roy Barman, Ms. Sara Tripura and Ms. Dolly Rupini, Advocates.

For the Respondents: Mr. Bidyut Majumder, Deputy Solicitor General of India, and Mr. Biplabendu Roy, Advocate.