The Patna High Court in the case of OM TRADERS VERSUS UNION OF INDIA, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, MINISTRY OF FINANCE, NEW DELHI, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, GRIEVANCE MINISTRY OF FINANCE, NEW DELHI, COMMISSIONER OF CGST AND CENTRAL EXCISE, PATNA, STATE OF BIHAR, JOINT COMMISSIONER OF STATE TAX, BIHARSHARIF, GOODS AND SERVICES TAX, NETWORK vide Case No.- Civil Writ Jurisdiction Case No. 16509 of 2024 dated 13.05.2025, held significant ruling in favour of taxpayers regarding rectification of errors in GSTR-3B returns to align them with GSTR-1, especially in cases of inadvertent mistakes.
Facts of the Case: A registered dealer under GST (M/s Om Traders), engaged in inter-state purchases (hence liable for IGST). While filing GSTR-3B for April 2019, the petitioner erroneously declared IGST instead of CGST/SGST. GSTR-1 was correctly filed. However, GSTR-3B included incorrect taxable value, Incorrect breakup of IGST vs CGST/SGST. The petitioner realized the error and sought rectification, but was denied.
The Petitioner argued that the mistake was clerical and unintentional. Relied placed upon judgments in the case of Aberdare Technologies Pvt. Ltd. (2024) and Engineers (I) Pvt. Ltd. (2023). Further, argued that no revenue loss occurred as the total tax was already paid and however, requested adjustment of excess IGST against CGST and SGST liabilities per Rule 88A of the CGST Rules and Circular No. 98/17/2019-GST.
The Department on the other hand pointed that Section 49(5) of the CGST Act which lays out utilization of ITC and says that there’s no statutory mechanism to allow such inter-head adjustments or rectification post-filing, and stated that the taxpayer should have paid CGST/SGST again and then claimed refund of the IGST erroneously paid.
Held that: The Court acknowledged that error made in GSTR-3B is genuine. Also, observed that there’s no mechanism in the GST portal to rectify GSTR-3B, but emphasized substantive justice. Also, noted that the error was bona fide, and no revenue loss occurred. Requiring the taxpayer to pay tax again and claim refund is burdensome and unsupported by law. Thus, the The advice to first pay under correct heads (CGST/SGST) and claim refund of excess IGST is not supported by any statutory mandate, its violates Article 265 of the Constitution.
Referred the judgment in Aberdare Technologies case which was affirmed by the Supreme Court.
The Court directed authorities to allow rectification of GSTR-3B in line with GSTR-1. Also, directed petitioner to submit a manual application. Rectification and redressal of related issues to be completed within two months.
