Facts of the Case

M/s. H.R. Carriers, a transporter and registered taxpayer operating under the bill-to-ship-to model, approached the Karnataka High Court after inadvertently entering the GSTIN of Respondent No.5 (a Kerala-registered entity) instead of Respondent No.4, India Cements Ltd (Tamil Nadu GSTIN), while filing its GSTR-1 returns for June to September 2022. As a result, India Cements Ltd was unable to claim Input Tax Credit of Rs.71,26,070, and withheld an equivalent amount along with interest of Rs.19,45,219 from the petitioner's outstanding bills. When the petitioner sought permission from the jurisdictional tax officers to rectify the clerical error, no action was taken, compelling it to approach the Court under Article 226 for a direction to permit rectification.

Issues Involved

  1. Whether a registered person can be permitted to rectify a bonafide, inadvertent error in GSTR-1 (wrong GSTIN entry) beyond the statutory time limits under Sections 37, 38 and 39 of the CGST Act.
  2. Whether such rectification can be directed where there is no loss of revenue, only a shifting of credit between two GSTINs.
  3. Whether the payment dispute between the petitioner and India Cements Ltd needs to be decided in the same proceedings.

Petitioner's Arguments

  • The wrong GSTIN entry was a bonafide, inadvertent clerical error made under the bill-to-ship-to arrangement, with no intention to evade tax or claim wrongful credit.
  • There was no loss of revenue to the government, as tax was duly paid; only the recipient entitled to claim ITC was incorrectly reflected.
  • Relying on Star Engineers (I) Pvt Ltd v. Union of India, Sun Dye Chem v. Assistant Commissioner, NRB Bearings Ltd, Pentacle Plant Machineries and Aberdare Technologies, courts have consistently permitted rectification of such bonafide errors despite expiry of statutory timelines under Sections 37(3), 38 and 39(9).

Respondent's Arguments

  • The statutory time limit for rectifying GSTR-1 for the relevant periods had already expired, and the common portal does not permit amendment beyond that window.
  • Respondents 4 and 5 contended that the rival claims over the withheld amount and interest needed independent adjudication and could not be resolved merely through a rectification direction.

Court Order / Findings

  • The Court held that the error was a genuine, bonafide clerical mistake in reporting the recipient's GSTIN, and following Star Engineers and Sun Dye Chem, such errors ought not to be perpetuated merely because the statutory correction window has lapsed, especially where no revenue loss is shown.
  • The petitioner was directed to be permitted to amend its GSTR-1 returns for June to September 2022, either through the common portal or manually, within four weeks.
  • The Court expressly kept open all rival contentions between the petitioner and Respondents 4 and 5 regarding the withheld payment, interest, and ITC entitlement.

Important Clarification

  • A bonafide, inadvertent error in reporting the recipient's GSTIN in GSTR-1, causing no revenue loss, is rectifiable even after statutory time limits under Sections 37, 38 and 39 of the CGST Act have lapsed.
  • Courts distinguish between errors causing actual revenue leakage and those merely misdirecting ITC entitlement between two genuine, registered taxpayers, extending relief more readily in the latter case.

Sections Involved

  • Section 37 of the CGST Act, 2017 — furnishing details of outward supplies (GSTR-1).
  • Section 38 of the CGST Act, 2017 — communication of inward supply details and input tax credit.
  • Section 39 of the CGST Act, 2017 — furnishing of returns, including rectification under sub-section (9).

Decision – In Favour of

The petition was disposed of with directions, in favour of the petitioner to the extent that it was permitted to rectify its GSTR-1 returns; the underlying dispute over withheld payment and interest between the petitioner and India Cements Ltd was left open for resolution between the parties.

Case Details

Karnataka High Court; WP No. 22477 of 2024; Coram: Justice S.R. Krishna Kumar; decided on 04.11.2025.

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