In a major setback to Sunil Bharti-led Bharti Airtel, the Supreme Court on Thursday declined to entertain the telecom company's claim seeking refund of Rs 923 crore, by rectifying its GST returns for July to September 2017.
A bench comprising justices A.M. Khanwilkar and Dinesh Maheshwari said: "the direction issued by the High Court being in the nature of issuing writ of mandamus to allow the writ petitioner to rectify Form GSTR-3B for the period from July to September 2017, in the teeth of express statutory dispensation, cannot be sustained".
The top court allowed the Centre's appeal and set aside the Delhi High Court order, passed on May 5, 2020, which allowed Airtel to rectify Form GSTR-3B for the period.
The bench added, "the law permits rectification of errors and omissions only at the initial stages of Forms GSTR-A1 and GSTR-A3, but in the specified manner. It is a different dispensation provided than the one in pre GST period, which did not have the provision of auto populated records and entries".
The bench said an assessee cannot be permitted to unilaterally carry out rectification of his returns submitted electronically in Form GSTR-A3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records. "There would be complete uncertainty and no finality could ever be attached to the self assessment return filed electronically," added the bench.
The bench also upheld the circular issued by the commissioner (GST) which had restricted the rectification of Form GSTR-A3B in respect of the period wherein error had occurred.
The top court agreed with Centre's contention that any indulgence shown contrary to the statutory mandate would not only be an illegality but will lead to chaotic situation and collapse of tax administration of Union, states, and union territories. The tax authorities denied any refund alleging that Airtel had under-reported input tax credit during the period. Airtel had argued it had paid excess tax of Rs 923 crore on inputs based on estimates since the GSTR-2A form was not operational during the period, wherein the error occurred.
The top court said the factum of non-operability of Form GSTR-A2A, therefore, is a flimsy plea taken by Airtel. "Indeed, if the stated form was operational, the same would have come handy to the writ petitioner for doing self assessment regarding eligibility of ITC and availing thereof", it noted.
The high court had directed that on filing of the rectified Form GSTR-3B, they shall, within a period of two weeks, verify the claim set forth by Airtel and give effect to the same once verified.