GST Dept. Can’t Retain Disputed Amount Paid Due To Inadvertent Error: Andhra Pradesh High Court

The Andhra Pradesh High Court has held that the GST department cannot retain the disputed amount that is paid to them due to an inadvertent error.

The division bench of Justice C. Praveen Kumar and Justice A.V. Ravindra Babu has observed that the amounts that were paid by the assessee or petitioner who furnished the incorrect details cannot be taken as a tax due from the department or respondents, legally. The department cannot contend that the claim, if any, of the petitioner is barred by limitation.

The assessee/petitioner is engaged in the business of supplying telecom pipe-laying services in the state of Telangana, like M/s. Vodafone Mobile Services Limited, Kandlakoya Village, and Medchal Mandal of Telangana State, whose other office is located in Mumbai. The petitioner supplied the cable-laying services at Kandlakoya in Telangana State.

However, the petitioner erroneously issued two tax invoices covering the supply of cable-laying services to Vodafone Mobile Services Limited, Mumbai. The two other tax invoices in the month of June 2018 declared the IGST liability and also issued a credit note reducing the original supply consideration charged in the two tax invoices issued by them to M/s. Vodafone Mobile Services Limited, Mumbai, for the tax period of June 2018.

While keying in the details and returns information in the GST common portal, the GSTIN of Vodafone Mobile Services Limited, Mumbai, was inadvertently keyed in instead of the GSTIN of Telangana.

There were interstate supplies of cable-laying services in the state of Telangana. It was purely an inadvertent mistake committed during the tax periods of the GST regime. Because of human error, the actual recipient of cable-laying services from the petitioner in Telangana was not able to claim the credit of the IGST paid by the petitioner. After realising the mistake, the petitioner tried to rectify it in May 2020, but in vain.

The petitioner contended that there was no dispute that a human error was committed in keying the GST common portal. The petitioner realised the mistake only in May 2020 and made several attempts to rectify the mistake, but in vain, as the GST common portal did not allow for such rectification.

The department contended that it was the petitioner's responsibility to follow the procedure outlined in the Circular for 2019, and that his claim falls under Section 54 of the CGST Act, which stipulated a two-year limitation period, and that the petitioner's claim was barred by limitation.

The court held that the petitioner cannot be compelled to follow the Circular of the year 2019, which bars the petitioner from manual filing. The petitioner cannot be compelled to do certain things that are impossible to perform.

The court ordered the petitioner to file a manual application for a refund of the amount to which he was entitled, and the respondents to issue orders in accordance with the law within four weeks.

Case Title: Varshan Enterprises Versus Office of GST Council

Case No: Writ Petition No. 10637 Of 2021

Citation: 2023 LiveLaw (AP)1

Date: 09.12.2022

Counsel For Appellant: J.N.V. Suresh Kumar

Counsel For Respondent: Suresh Kumar Routhu

Click Here To Read The Order