Facts of the Case

The writ applicant No.1, engaged in manufacture and export of textile capital machinery, supplied a textile capital machine to writ applicant No.2 under Invoice No.122 dated 22.06.2019 (total value Rs.29,21,960/-) and Invoice No.125 dated 25.06.2019 (total value Rs.23,90,695/-). These supplies qualified as 'Deemed Export' under Section 147 of the CGST Act read with Rule 89(2)(g) of the CGST Rules and Notification Nos.47/2017, 48/2017 and 49/2017-Central Tax, all dated 18.10.2017. While filing GSTR-1 for June 2019, the petitioner's GST consultant inadvertently failed to tick the 'Deemed Export' column against these and other invoices, a total of nine invoices in all. On realizing the error, the petitioner sought to amend the GSTR-1; the department initially permitted amendment of all nine invoices, but the petitioner managed to complete the amendment for only four. A dispute arose over the remaining five invoices — the department taking the position that having been afforded the opportunity once, no further amendment could be permitted, citing the time restriction under the proviso to Section 37(3) of the CGST Act. Three connected writ applications (SCA Nos.9577, 10101 and 10367 of 2020) were filed, with SCA No.10367 of 2020 treated as the lead matter.

Issues Involved

  1. Whether the petitioner could be permitted to amend GSTR-1 for the remaining five invoices to mark them as 'Deemed Export', notwithstanding the restriction under the proviso to Section 37(3) of the CGST Act.
  2. Whether the department's refusal to allow further amendment, after an earlier opportunity was only partly availed, was justified.

Petitioner's Arguments

  • E-mail correspondence on record showed that the petitioner had not received appropriate feedback from the department while attempting to complete the amendment of the remaining invoices, causing significant financial loss.
  • The omission to tick the 'Deemed Export' column was a bona fide, inadvertent clerical error on the part of the GST consultant.
  • Denial of the deemed export benefit for a technical and procedural lapse was unwarranted.

Respondent's Arguments

  • Correspondence on record showed the petitioner itself had acknowledged the possibility of a mistake on its part, while still pursuing permission to amend the five remaining invoices.
  • Since the petitioner had already been permitted to amend all nine invoices and completed only four, no further opportunity for amendment could be granted.
  • The proviso to Section 37(3) of the CGST Act barred any rectification beyond the prescribed time.

Court Order/Findings

  • The Court did not go into the controversy as to whose fault led to the incomplete amendment, noting only that the department had permitted amendment of all nine invoices but the petitioner managed only four.
  • In the peculiar facts of the case, the Court granted the petitioner one last opportunity to get the GSTR-1 amended with respect to the remaining five invoices.
  • The respondents were directed to process the amendment request for the balance five invoices marking the 'Deemed Export' column, with liberty to verify the same with the recipient.
  • The respondents, including the GSTN Network, were directed to process the amendment without applying the restriction contained in the proviso to Section 37(3) of the CGST Act, and to accept the request in physical form in case of any technical difficulty on the portal.
  • All three connected writ applications were disposed of in these terms, with direct service permitted.

Important Clarification

  • Where a bona fide, inadvertent error in ticking the 'Deemed Export' column of GSTR-1 has been only partly rectified through a departmentally-permitted amendment, and completion was frustrated by process or feedback difficulties, courts may direct the department to allow completion of the amendment as a one-time measure, notwithstanding the time restriction under the proviso to Section 37(3) of the CGST Act.

Sections Involved

  • Section 37, CGST Act, 2017 – governs furnishing of details of outward supplies (GSTR-1); sub-section (3) and its proviso restrict rectification of errors beyond a prescribed time.
  • Section 147, CGST Act, 2017 – defines and enables notification of 'Deemed Exports'.
  • Rule 89(2)(g), CGST Rules, 2017 – prescribes documentation for refund claims relating to deemed exports.
  • Notification Nos.47/2017, 48/2017 and 49/2017-Central Tax, dated 18.10.2017 – notify supplies and procedure for deemed exports.

Decision – In Favour of

The decision is in favour of the Assessee — disposed of with directions permitting the amendment, granted as a one-time measure without a definitive finding on which party was at fault for the earlier incomplete amendment.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: High Court of Gujarat at Ahmedabad
  • Case No.: R/Special Civil Application No. 9577 of 2020, with R/Special Civil Application No. 10101 of 2020 and R/Special Civil Application No. 10367 of 2020
  • Coram: Hon'ble Mr. Justice J.B. Pardiwala and Hon'ble Ms. Justice Nisha M. Thakore
  • Date of Order: 30 March 2022

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