In W.P. No.10637 of 2021-AP HC- When Rule 97A of CGST Rules also permits manual filing, restriction in CBIC’s 2019 Circular seeking refund by electronic mode only may not be proper: Andhra Pradesh HC 
Justices C. Praveen Kumar & A.V. Ravindra Babu [09-12-2022]

Read Order: M/S. VARSHAN ENTERPRISES V. OFFICE OF THE GST COUNCIL AND ORS 

LE Correspondent

Amaravati, February 3, 2023: While allowing the petition instituted by the petitioner under Article 226 of the Indian Constitution seeking rectification of a tax invoice mistake constituted by him which was denied by the GST portal, the Andhra Pradesh Court has opined that the respondents cannot retain the disputed amount, that are paid to them, due to an inadvertent error.

The Division Bench of Justice C. Praveen Kumar and Justice A.V. Ravindra Babu allowed the present petition by observing that as the Circular of the year 2019 restricts only electronic filing and as the contention of the respondents that the claim of the petitioner is barred by limitation was not acceptable, the respondents cannot retain the amount, which was paid by the petitioner.

Facts leading to filing of the present petition were that  the petitioner was  the taxable person under the Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017 , allotted with Goods and Services Tax Identification Number . 

The petitioner was also allotted to the Central State Tax Department . The petitioner was  entitled to file quarterly returns. 

Petitioner was submitting the common returns and the details of outward supplies regularly both under the APGST Act, CGST Act and also under the Integrated Goods and Services Tax Act, 2017 electronically through the common portal duly reporting the intra-state supplies of goods and services as mandated and also inter-state supply of goods and services under the IGST Act since July, 2017.

It also supplied the cable laying services at Kandlakoya of Telangana State. However, the petitioner erroneously issued two tax invoices covering the said supply of cable laying services to M/s.Vodafone Mobile Services Limited, Mumbai and two other tax invoices in the month of June, 2018 declaring the IGST liability and also issued a credit note for total value of Rs 3,11,619 reducing the original supply consideration charged in the said two tax invoices issued by them to M/s.Vodafone Mobile Services Limited, Mumbai for the tax period June, 2018. 

While keying in the said details and returns information in the GST common portal, the GSTIN of M/s.Vodafone Mobile Services Limited, Mumbai inadvertently keyed in instead of the GSTIN of M/s.Vodafone Mobile Services Limited. 

Because of this human error, the actual recipient of cable laying services from the petitioner at Telangana was  not able to claim the credit of the IGST paid by the petitioner.

 After realising this mistake, the petitioner tried to rectify this mistake in May, 2020 but in vain. The GST common portal was not permitting the same, because the time available for rectification of such mistakes was  only up to October 20, 2019. 

The petitioner realized this mistake in May, 2020 when M/s.Vodafone Mobile Services Limited, Kandlakoya, refused to pay the GST amount by correspondingly reducing the subsequent supply consideration payable by it. It is in this backdrop, the writ petition was filed. 

After considering the submissions, the Court noted that the issue that was posed for consideration was whether a Writ of Mandamus to set-aside the communication of the Superintendent of CGST, and consequently to direct the respondents to permit the petitioner to rectify the details of the recipient of the service in the form of GSTR-1 to enable M/s.Vodafone Mobile Services Limited, Kandlakoya, Telangana State or to refund the sum of Rs.7,87,328=78 to the petitioner can be issued.

To deal with the same, reference was made to the case of Laxmi Organic Industries Limited v. Union of India and others .

In view of the same,  the Court stated “when Rule 97A of the CGST Rules also permits manual filing restriction,  in Circular, dated November 18, 2019 seeking refund by electronic mode only may not be proper”. 

In view of the precedent, the amounts that were paid by the petitioner furnishing the incorrect details cannot be taken as a tax due to the respondents, legally. When such is the scenario, the respondents cannot contend that the claim, if any, of the petitioner, is barred by limitation, the Court observed.  

As the Circular of the year 2019 restricts only electronic filing and as the contention of the respondents that the claim of the petitioner is barred by limitation was not acceptable, the respondents cannot retain the amount, which was paid by the petitioner, the Court observed while allowing the writ petition.