Bona Fide Errors In GSTR-3B Can Be Corrected; Karnataka High Court Directs Department To Accept Revised Returns

Justice S.R. Krishna Kumar directed the department to accept the revised returns, noting that the Supreme Court has also directed the CBIC to re-examine the provisions/timelines fixed for correcting the bona fide errors.

In the case at hand, the assessee/petitioner is a works contractor and filed returns for the initial period from July 2017 to March, 2018. The assessee realised that there was an error in filing the GSTR-3B return.

It sought to rectify the sales declared as B2C instead of B2B. The assessee further realised that it had reported turnover, treating it as inclusive of GST @18% instead of 12%. The assessee made the necessary corrections on 06.05.2019, and the portal allowed it.

It is the case of the assessee that, despite the assessee being entitled to make such corrections and also having made such corrections, the Assistant Commissioner of Commercial Taxes has issued the impugned show cause notice under Section 73(1) of the KGST Act on the ground that the assessee was not entitled to make such corrections.

The bench noted that the issue of whether the assessee would be entitled to make corrections in the GSTR3B, which came up for consideration before the Karnataka High Court in the case of Orient Traders vs. Deputy Commissioner of Commercial Taxes (Audit) 3, 4 DGSTO-3, (2023) 3 Centax 63(Kar) wherein it was held that:

12……….the petitioner is entitled for the limited relief of being permitted to make the necessary changes to its GSTR 3-B returns for the months of July 2017 and March 2018, particularly, since doing so would not cause any prejudice to the respondents-Revenue nor would it upset the chain of credit under the GST scheme and liberty is to be reserved in favour of the revenue to proceed with the impugned show cause notice dated 17.01.2022 after permitting the petitioner to make the necessary amendments to its GSTR 3-B Returns for the above tax periods…….

The bench further referred to the case of Wipro Limited India vs. Assistant Commissioner of Central Taxes, Bengaluru South and Others, 2023 SCC OnLine Kar 144, where a similar view was taken.

The bench noted that the Supreme Court had directed the Central Board of Indirect Taxes and Customs to re-examine the provisions/timelines fixed for correcting the bona fide errors.

The bench directed the department to accept the returns filed by the assessee together with the necessary corrections.

In view of the above, the bench allowed the petition.

Case Title: Hindustan Construction Company Ltd. v. Union of India

Case Number: WRIT PETITION NO. 22377 OF 2022

Counsel for Petitioner/Assessee: Bharat B. Raichandani

Counsel for Respondent/Department: Prathibha and K. Hema Kumar