The department won’t suffer any losses if the assessee is allowed to correct the errors in the GSTR-1 return because the HC permits correction

Union of India v. Y. B. Constructions (P.) Ltd. – [2023]

In a writ case submitted to the High Court, the petitioner requested that the Department be instructed to allow the correction of GST returns submitted for the financial years 2017–18 and 2018–19. It was argued that because the GSTR-1 outward supply return should have classified supplies as B2B instead of B2C, the recipient was unable to claim an input tax credit. The Government argued that the window for correction had already closed. 

As there was no escapement of tax, the Honorable High Court noted that allowing the petitioner to correct the error would not result in any loss to the department. But, if remedy were denied, the petitioner would suffer harm. The Madras High Court had approved a similar request in a related matter, and instructions had been granted to file the necessary form, the court noted. As a result, it was decided that the petitioner may resubmit a rectified GSTR-1 return, and the authorities were directed to physically receive the forms and enable uploading through the GST portal.