Supreme Court grants Relief to Bharti Airtel in GSTR-3B issue

Supreme Court grants Relief to Bharti Airtel in GSTR-3B issue

The Supreme Court of India (SC) put a stay on the judgment of the Delhi High Court (HC) and granted relief to Bharti Airtel in the GSTR-3B issue

M/s Bharti Airtel Limited (Company) is engaged in the business of providing telecommunication services in India through the license granted by the Department of Telecommunication, Government of India (Department).

Based on the implementation of the provisions of the Goods & Service Tax Act (GST Act), the Company took registration in every State and Union Territory of India. It has approximately 50 registrations under GST laws for making payment related to GST.

To bring it in conformity with the new laws, the Company modified its system from the centralized registration to multiple registrations under GST. Certain technical changes were also made to enable filing of the statutory Forms GSTR-1, 2, and 3.

However, the department failed to operationalize the Forms GSTR-2 and 3 and a summary scheme was introduced for filing Form GSTR- 3B. The department disapproved of the step taken by the company and stated that its action is the core reason behind the failure of the system whereby it cannot detect the errors.

The Company made averments that during July- September 2017 the monthly GSTR- 3B recorded the Income Tax Credit (ITC) based on its estimate. Hence, it had to discharge the GST liability for the relevant period, however, the details of ITC available were not known. The exact ITC available was discovered in October 2018, when the Government operationalized Form GSTR-2A for the past periods.

The Company wished to rectify its returns but was prevented by the department from doing so. Hence, a writ petition was filed by M/s Bharti Airtel Limited before the HC under Article 226 of the Constitution of India. The writ was filed by the company for rectification of GSTR-3B.

The HC stated "The failure of the Government to operationalize the statutory returns, GSTR 2, 2A and 3 prescribed under the CGST Act, cannot prejudice the assessee. The GSTR 3B which was merely a summary return as an alternative did not have the statutory features of the returns prescribed under the Act."

The HC read down the circular no. 26/26/2017-GST dated 29 December 2019 and concluded that said the rectification of the return was imperative in nature. It further said that any restriction related to the rectification of the return was ultra vires the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act) and in contravention to Articles 14, 19, and 265 of the Constitution of India.

Petition for special leave to appeal (SLP) was filed by the department before the SC to challenge the order of the HC. The matter was listed before a three-judge bench comprising of Justice A.M. Khanwilkar, Justice B.R. Gavai, and Justice Krishna Murari.

The SC granted the interim relief to the department and put a stay on the judgment of the HC. The SC allowed the rectification of the Form GSTR-3B for the period to which the error relates.