Facts of the Case

The petitioners, M/s Satyam Auto Components Pvt. Ltd. and M/s Hi Tech Engineers & Contractors, sought a direction permitting correction of Form GSTR-1 for December 2017. Satyam Auto, registered under GSTIN 03AACCS2689E1ZH, had supplied tools to M/s WABCO India Ltd., an SEZ unit in Tamil Nadu, paying IGST treating the supply as zero-rated under Section 16 of the IGST Act, 2017. Due to the vendor-approval process for the tools, the petitioner applied for refund only in April-May 2019, by when the last date for revising GSTR-1 (31.03.2019, per CBIC Circular dated 31.12.2018) had lapsed. On uploading the mandatory Statement-4 for refund under Rule 89(2)(e) of the CGST Rules, the portal generated an error since the petitioner had entered the SEZ invoices under Table 6A (Export) instead of Tables 4A/4B/4C/6B/6C (B2B). The GST Help Desk confirmed this was a legal, not technical, issue and directed the petitioner to CBIC, which offered no solution beyond portal-related channels.

Issues Involved

  1. Whether the petitioner could be permitted to correct/re-submit Form GSTR-1 for December 2017 after the portal deadline for such correction had expired.
  2. Whether denial of correction, and consequent denial of the IGST refund on a genuine zero-rated SEZ supply, was sustainable purely on this technical/limitation ground.

Petitioner's Arguments

  • The mistake was one of category-classification (SEZ invoices entered under Export/Table 6A instead of B2B tables) rather than a substantive error, and Section 37(3) of the CGST Act allows a person to rectify errors or omissions, which the respondents had refused to allow.
  • Reliance was placed on Madras High Court's ruling in M/s Sun Dye Chem vs. The Assistant Commissioner (ST) (W.P. No.29676 of 2019) and the Orissa High Court's follow-on ruling in M/s Shiva Jyoti Construction vs. CBEC (W.P.(C) No.18217 of 2017), both permitting correction/manual filing of GSTR-1/GSTR-3B beyond the normal window to correct credit-distribution errors.

Respondent's Arguments

  • The petitioner itself committed the error in Form GSTR-1, and this cannot be relegated to a technical aspect of the GST portal; correction is barred since the time limit to amend GSTR-1 (extended up to March 2018, per CBIC's widely publicised circular) had lapsed by the time the petitioner approached the authorities in September 2019.
  • Amendment/correction of GSTR-1 has to be made by the petitioner itself, following the procedure in Circular No.37/11/2018-GST, and not by the department.

Court Order / Findings

  • The Court relied on Sun Dye Chem (Madras HC) and Shiva Jyoti Construction (Orissa HC), both of which permitted manual correction of GST returns beyond the portal deadline where a genuine classification/distribution error had occurred.
  • The Court held that, as in the cited precedents, the petitioners should be permitted to re-submit the corrected Form GSTR-1 for the relevant period manually, with the respondents receiving the applications manually and thereafter uploading the corrected details on the web portal.
  • Both petitions were allowed, with the directions to be carried out within four weeks.

Important Clarification

Where a taxpayer's error in Form GSTR-1 is one of mis-categorisation (e.g., entering SEZ zero-rated supplies under the Export table instead of the applicable B2B table) rather than a substantive misstatement, and this error blocks a genuine refund claim under Rule 89(2)(e) of the CGST Rules for zero-rated supplies under Section 16 of the IGST Act, courts will permit manual correction of the return even after the portal's ordinary amendment deadline has lapsed — following the settled approach in Sun Dye Chem and Shiva Jyoti Construction.

Sections Involved

  • Section 16, Integrated Goods and Services Tax Act, 2017 – defines zero-rated supply, including supply to an SEZ unit, and entitlement to refund of tax paid on such supply.
  • Rule 89(2)(e), Central Goods and Services Tax Rules, 2017 – prescribes the documentation, including Statement-4, required for refund claims on zero-rated supplies.
  • Section 37, Central Goods and Services Tax Act, 2017 – governs furnishing of details of outward supplies in Form GSTR-1 and rectification of errors therein.

Decision – In Favour of

Both petitions were allowed, permitting manual correction of GSTR-1 to enable the refund claim — the outcome favours the Assessee.

Case Details

Court: High Court of Punjab and Haryana at Chandigarh
Case Nos.: CWP No.8019 of 2020 (O&M) and CWP No.16508 of 2021 (O&M)
Neutral Citation: 2023:PHHC:132733-DB
Coram: Hon'ble Ms. Justice Ritu Bahri and Hon'ble Mrs. Justice Manisha Batra
Date of Order: 05.10.2023

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