Delhi HC allows Form GSTR-3B rectification for July to September 2017

In a recent judgment pronounced by Hon. Delhi High court in the case of Bharti Airtel Ltd Vs. Union of India & Ors, It was held that Form GSTR-3B rectification is allowed for July to September 2017

Case Name: Bharti Airtel Limited Vs Union of India & Ors. (Delhi High Court)

Date of Judgement/Order : 05/05/2020


  1. Whether the restriction imposed by the CBIC’s Circular dt. 29.12.2017 on rectification/amendment of GSTR-3B is valid?
  2. Can the Circular issued by the Board be contrary to the Act?
  3. Can the Board prescribe the conditions by a Circular which are against the scheme of the statutory provisions of the Act?
  4. Can the substantial benefit be denied to a taxpayer due to the fault of the Respondents i.e. the Government/The Board?

Constraints faced by the petitioner:

Petitioner had to take 50 registrations across India under GST instead of a centralized GST registration. GSTR-2, GSTR-3 were not operationalized and Form GSTR 3B was introduced in rush and gush and half bakedly.

Practical Inadvertent Errors made by Petitioner in Form GSTR 3B:

  • Few invoices were not taken into account,
  • Credit notes related to invoices of the previous regime were missed accidentally,
  • Stock transfer within the same state was inadvertently shown as supply,
  • Output tax was wrongly calculated and
  • NIL Form GSTR 3B was filed instead of Return with Tax Details

for the period July 2017 to September 2017 whereas there was output tax liability pertaining in the final outcome.

No Visibility of Input Tax Credit:

Due to late introduction of GSTR 2A, the exact Input tax credit was known as late in October 2018. The precise details were calculated then and it came to the conclusion that relevant input tax credit was under reported and excess tax payment of around Rs.923 crores was made.


Delhi High Court held that the failure of the Government to operationalize the statutory returns, GSTR-2, GSTR-2A and GSTR-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. Therefore, In case of an error in capturing Input tax credit, due to which cash was paid for discharging GST liability instead of utilizing ITC. ITC could not be reconciled correctly at that time, the return should be allowed to be rectified and the cash paid should be granted as refund.

Paragraph 4 of CBIC Circular 26/26/2017-GST dated 29.12.2017 is not in consonance with the provisions of the CGST Act, 2017. No cogent reasoning behind the logic for restricting rectification only in the period in which the error is noticed and corrected and not in the period to which it relates. There is no provision in the Act which would restrict such rectification- restriction, if any, that can be introduced by way of a Circular has to be in conformity with the scheme of the Act and the provisions contained therein. Constraint introduced by paragraph 4 of the impugned Circular dated 29.12.2017 is arbitrary and contrary to the provisions of the Act. It is trite proposition of law that Circular issued by the Board cannot be contrary to the Act and the Government cannot impose conditions which go against the scheme of the statutory provisions contained in the Act. Subordinate legislation must conform to the statute under which it is made and they cannot whittle down the benefits granted under statutory provisions. Respondents have failed to fully enforce the scheme of the Act and cannot take benefit of its own wrong of suspension of the statutory forms and deprive the rectification/amendment of the returns to reflect the ITC pertaining to a tax period to which the return relates to.

Petitioner has a substantive right to rectify/adjust the ITC for the period to which it relates. Rectification/adjustment mechanism for the months subsequent to when the errors are noticed is contrary to the scheme of the Act. Respondents cannot defeat the statutory right of the petitioner by putting in a fetter by way of the impugned Circular – Since the respondents could not operationalise the statutory forms envisaged under the Act resulting in depriving the petitioner to accurately reconcile its input tax credit, the respondent cannot today deprive the petitioner of the benefits that would have accrued in favour of the petitioner if, such forms would have been enforced. Petitioners cannot be denied the benefit due to the fault of the respondents. Respondents have also not been able to expressly indicate the rationale for not allowing the rectification in the same month to which the form GSTR-3B relates. Respondents have admitted that the facility of form GSTR-2A was not available prior to 2018 and, as such, for the months July 2017 to September 2017 the scheme was envisaged under the Act was not implemented. Refund of excess cash balance in terms of section-49(6) read with section 54 does not effectively redress petitioner’s grievance – only remedy that can enable the petitioner to enjoy the benefit of seamless utilization of the input tax credit is by way of rectification of its return GSTR-3B. Petitioner permitted to rectify form GSTR-3B for the period to which the error relates. On the filing of the rectified form GSTR-3B, Respondents are directed to verify the claim made therein, within a period of two weeks, and give effect to the same once verified: High Court [para 20, 23, 24]

Accordingly, the petition is allowed and petitioner is allowed for form GSTR-3B rectification for the period July 2017 to September 2017.

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