The Gujarat High Court has provided significant relief to taxpayers by ruling that clerical errors in GST returns can be rectified, especially when such mistakes are bona fide and cause no revenue loss.
In the case of M/s Sanghvi Metal Corporation, the petitioner received a show cause notice dated 29.09.2023 from the GST Department, raising a demand of ₹40,32,390. The notice highlighted discrepancies between outward supplies reported in Form GSTR-1 and Form GSTR-3B. Authorities also alleged that the petitioner had claimed excess Input Tax Credit (ITC) of ₹21,136 and ineligible ITC of ₹5,118.
Clerical Error in GST Return Filing
The petitioner explained that the mismatch occurred due to a clerical mistake during the initial GST implementation year, where the turnover of a sister concern was inadvertently included in Form GSTR-1 of the petitioner. Despite this clarification, the department passed an order in original on 20.12.2023 (Form GST DRC-07), demanding ₹40,27,272 with interest and penalty.
Appeal Dismissed on Technical Grounds
An appeal was filed before the appellate authority. However, it was dismissed solely on limitation grounds, as the petitioner, being a senior citizen, was not well-versed with technology and did not regularly access emails. Importantly, the appellate authority did not examine the matter on merits.
High Court’s Observations
A bench comprising Justice Bhargav D. Karia and Justice Pranav Trivedi referred to the Bombay High Court ruling in Aberdate Technologies (P.) Ltd. v. CBIC [2024] 165 Taxmann.com 325, which emphasized that bona fide mistakes without revenue implications should be permitted to be corrected.
Applying this principle, the Gujarat High Court noted that the petitioner had wrongly declared the turnover of a sister concern in GSTR-1, and such an error was clerical and rectifiable.
Final Verdict
The High Court quashed the appellate order dated 12.02.2025, allowed the petitioner to file a rectified Form GSTR-1 within four weeks, and directed the tax authorities to accept and process the correction within 12 weeks.
✅ Key Takeaway: This ruling reinforces that genuine clerical errors in GST returns can be rectified, provided they do not result in revenue loss, thereby ensuring justice for taxpayers facing technical or inadvertent mistakes.