UNION OF INDIA versus BHARTI AIRTEL LTD. & ORS.

23. It is further urged that Sections 37 and 38 of the 2017 Act do not provide for right relating to eligibility of ITC. The obligation to do self-assessment of ITC and of OTL and to pay the self-assessed OTL by using the ITC or by cash payment, is a matter of exercising option for electing the mode of discharge of OTL. Further, reconciliation predicated under Sections 37 and 38 between the outward supplier, registered person and the subsequent recipient, does not impact the rights and obligations of the registered person regarding self-assessment of OTL and the duty to pay the self-assessed OTL in the manner he wants to discharge by using self-assessed ITC or cash payment.

24. It is urged that the option so exercised by the registered person is his own volition and the Authorities have no concern or any role to play at that stage. The High Court has completely glossed over this crucial aspect and proceeded to answer the matter in issue being swayed 9 39. Furnishing of returns.- (1) to (8) ….. (9) Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub- section (4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are noticed, subject to payment of interest under this Act: Provided that no such rectification of any omission or incorrect particulars shall be allowed after the due date for furnishing of return for the month of September or second quarter following the end of the financial year, or the actual date of furnishing of relevant annual return, whichever is earlier. (emphasis supplied) by the fact that common electronic portal had faced rough weather during the initial phase and that the statutory forms were not operationalized. The High Court was impressed by the argument of the writ petitioner that due to non-operability of the stated forms, the writ petitioner was denied of access to the relevant information, in particular about the ITC amount in its electronic credit ledger. This plea could not have been taken by the writ petitioner considering the obligation of self-assessment of ITC and of OTL and duty to pay self-assessed OTL. The eligibility of ITC and the right to exercise option to pay the OTL through the mode of his choice would come later. For doing the self-assessment, the registered person is fully equipped with accounts and records maintained by him as per the statutory requirement, which are in his complete control and knowledge. In other words, the High Court committed manifest error in opining that the stipulation specified in the impugned Circular, is contrary to the provisions of the 2017 Act; whereas, express provisions of the 2017 Act provide to the contrary. Further, the High Court erroneously assumed that the writ petitioner had submitted the monthly Form GSTR- 3B for the period of July to September 2017, based on its estimate. The writ petitioner cannot be permitted to take such a plea despite the statutory requirement of maintaining accounts and records as provided by the 2017 Act and the Rules framed thereunder. Furthermore, effecting correction/rectification in the returns for the month or quarter during which such omission or incorrect particulars have been noticed, does not in any way result in denying the right to avail ITC. The fact that respondent No.1 would not be eligible to get refund of cash also, cannot be the basis to permit the registered person to swap the entry in the electronic cash ledger with the entry in the electronic credit ledger or vice versa. No such mechanism has been provided in the 2017 Act or the Rules framed thereunder. If permitted, even as one of the cases because of non-operability of the forms at the relevant time, may result in chaotic situation and collapse of the tax administration of the Union, States and the Union Territories.

25. Per contra, learned counsel for respondent No. 1 has supported the reasons as had weighed with the High Court in upholding the challenge and reading down paragraph 4 of the impugned Circular dated 29.12.2017 to the extent it restricts the rectification of Form GSTR-3B in respect of the period in which the error had occurred. It is emphasized that Form GSTR-3B is only a stop gap arrangement to overcome the technical glitches in the common electronic portal and non-operability of the UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.] concerned statutory forms enabling auto-populating of relevant entries and records. The fact that circumstances prevalent at the initial stages of introduction of common electronic platform has been acknowledged by the authorities and introduction of Form GSTR-3B is a testimony of that admission. Having done so, it was not open to the authorities to deny the taxpayers their dues, in particular, right to revise their returns and avail of ITC. The provision made in the impugned Circular dated 29.12.2017, not permitting rectification of the return is conceptually flawed and not consistent with the legislative intent and the provisions of the 2017 Act and the Rules framed thereunder. It denies the taxpayer his statutory right to utilize credits, due to technical problems in not putting the electronic platform in place. The respondent realized that huge amounts of excess ITC is available in its books only after Form GSTR- 2A was made operational in September, 2018. By not permitting the respondent to avail of ITC shown in the electronic credit ledger had resulted in collection of double tax from the respondent and an unfair advantage to the Government. Permitting the registered person to avail of the excess ITC in its electronic credit ledger, cannot be considered to be unfair advantage taken by the taxpayer.

26. The 2017 Act provided that in a Business to Business (B 2 B) transaction, a supplier (of goods/services) and a recipient (of goods/ services) would interact with each other through a common electronic portal which as per the statutory framework was required to provision for payment of tax and furnishing of returns including availing/taking and utilization of credit. Sections 37, 38 read with Section 42 of the 2017 Act and Rules 59 and 60 of the 2017 Rules are indicative of the features that were required to be provided in the common portal. It is supposed to provide for auto-populating of the records of supplier and the recipient including the facility of interaction of GSTN through Forms GSTR-1, 1A, 2, 2A and 3 and generation and filing of periodical returns. It contemplated an automatic matching, reversal and reclaim of ITC. The mechanism for rectification has been envisaged in Section 39(9) of the 2017 Act, which is subject to the steps to be taken under Sections 37 and 38 regarding matching and verification. The return to be filed in Form GSTR-3B had no such features and was only a stop-gap arrangement, as the mechanism provided in Sections 37 and 38 was not put in place. The provision regarding rectification under Section 39(9), therefore, had no application to the stop-gap arrangement of filing return in Form GSTR- 3B, much less for the relevant period (July to September 2017). Hence, reliance placed on Section 39(9) of the 2017 Act to justify the stipulations specified in the impugned Circular dated 29.12.2017, cannot be countenanced.

27. It is urged that Form GSTR-3B is a summary return and does not contain the invoice-wise details. The recipient who had no access to the vendor’s returns had no facility to verify the correctness of the ITC taken. Form GSTR-3B is a consolidated return wherein the assessee manually files its total credit, OTL etc. The appellant cannot take advantage of its own failure of not being able to operationalize Forms GSTR-2 and GSTR-3 right at the inception when the provisions of the Act came into force. It is unfair and inequitable that failure of the department should benefit the department by forcing the registered person to discharge OTL. On the other hand, the assessees were given to understand right from 2015 that the system of return filing will be automated under GST. The entire industry and trade accordingly contemplated system changes based on these declarations i.e., return filing and taking/utilizing credit will be on the basis of auto-populated returns. Notably, three days before the implementation of GST, even though Sections 37, 38, 39, 42 and 43 were notified and were brought into force, the appellant issued Notification No. 10/2017 – Central Tax dated 28.06.2017 stating that the automated system will not be implemented and a summary manual return under Section 61(5) in Form GSTR-3B, which is “in lieu of” Form GSTR-3 has to be filed. The parameters specified in Form GSTR-3 were substituted in Form GSTR- 3B. This arrangement was soon altered by issuing Notification No. 17/ 2017-Central Tax dated 27.07.2017, thereby amending Rule 61(5) retrospectively with effect from 01.07.2017, omitting the words “in lieu of” and expressly mentioning that Form GSTR-3B was introduced only till the period Sections 37 and 38 were not in operation. Further, Form GSTR-3B was only a stop-gap arrangement and while filing of Form GSTR-2 is operationalized, Form GSTR-3 of the preceding tax periods will be automatically generated and filled after acceptance/rejection contemplated under Sections 37 and 38 of the 2017 Act. In October 2019, by amending Rule 61(5) retrospectively making the return filed in Form GSTR-3B final return, the automated system contemplated under Sections 37 to 39 was formally done away with in the teeth of statutory mandate.

28. According to respondent No. 1, it is only after operationalization of GSTR-2A in September, 2018 that complete data for July to September UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.] 2017 became available to it and on the basis of which it wanted to revise the return filed for that period. It was possible to do so in terms of Circular No. 7/7/2017 dated 01.09.2017, which predicated that the details furnished in Form GSTR-3B will be corrected based on Forms GSTR-1 and GSTR-2 and will be auto-populated and will reflect in Form GSTR- 3 in that particular month. However, that was done away with by introducing impugned Circular No. 26/26/2017-GST dated 29.12.2017. The arrangement specified in the impugned Circular was against the spirit of the Act and the Rules framed thereunder. Hence, the High Court justly recorded that finding. It is urged that rectification/adjustment mechanism for the month when the errors are noticed is contrary to the scheme of the 2017 Act and would defeat the statutory right of the assessee by putting a fetter to not avail the ITC, though available in his account of electronic credit ledger. The High Court rightly read down paragraph 4 of the impugned Circular dated 29.12.2017 and also issued direction to allow the respondent to rectify Form GSTR-3B for the period to which error relates i.e., July to September 2017, subject to verification by the authorities concerned. This was obviously an equitable arrangement and not opposed to any provision of the Act or the Rules. This direction would enable the respondent to avail of the ITC from the surplus shown in his account of electronic credit ledger and the excess amount paid in cash would correspondingly be reinstated in electronic cash ledger of the respondent, which is to the tune of Rs.923 crores. As a matter of fact, the impugned Circular dated 29.12.2017 is wholly without jurisdiction as it arbitrarily alters the statutory framework. It is also inconsistent with the return filing system under previous tax regime, such as Service Tax Rules, Central Excise Tax Rules, Delhi Value Added Tax Act, Income Tax Act etc. In all these legislations, it would have been open to the assessee to rectify the original self-assessed return at a later point of time. It is urged that the High Court was competent to issue writ of mandamus as it has been done in the present case.

29. We have heard Mr. N. Venkataraman, learned Additional Solicitor General of India for the appellant and Mr. Harish N. Salve and Mr. Tarun Gulati, learned senior counsel appearing for respondent No. 1.

30. At the outset, the preliminary issue raised by the appellant regarding jurisdiction of the Delhi High Court to entertain the writ petition or that the writ petition suffered from the vice of non-joinder of the necessary parties including that the High Court could not have issued a writ of mandamus, need not detain us. As regards the jurisdiction of the Delhi High Court, the registered office of respondent No. 1 is in Delhi. The appellant (respondent in the writ petition) also has its office in Delhi. The relief claimed in the writ petition amongst others, was to challenge provisions of the central Act and the circulars issued by the competent authority having its office in Delhi. Hence, the jurisdiction of the Delhi High Court cannot be a matter of any doubt. Similarly, the argument of the appellant that State Governments/Union Territories are necessary parties, does not take the matter any further. As aforesaid, the writ petitioner was not challenging the individual action of the States or the Union Territories, but a policy decision of the Central authority who had issued the impugned Circular, namely, the Commissioner (GST). If the writ petitioner succeeded in that challenge, the consequential relief would follow. In our opinion, non-impleadment of respective States/Union Territories would not come in the way of the writ petitioner to pursue the cause brought before the High Court by way of subject writ petition. Even the argument regarding High Court having exceeded jurisdiction in issuing writ of mandamus, does not commend to us. If the conclusion reached by the High Court regarding the efficacy of impugned Circular was to be upheld, no fault can be found with the directions issued by it in paragraph 24 of the impugned judgment, reproduced above. Accordingly, the preliminary objections regarding the maintainability of the writ petition and the jurisdiction of the Delhi High Court deserve to be rejected.

31. Another issue that needs to be decided at the threshold is whether the impugned Circular dated 29.12.2017 issued by the Commissioner (GST) is without authority of law. Indisputably, the Circular has been issued to notify the clarification given by the Board in exercise of its powers conferred under Section 168(1) of the 2017 Act in order to consolidate the information in various notifications and circulars regarding return filing and to ensure uniformity in implementation across field formations. The decision was taken by the Board after considering various representations received seeking clarifications on various aspects of return filing such as return filing dates, applicability of quantum of late fee, amendment of errors in submitting/filing of Form GSTR-3B and other related queries. In strict sense, it is not the direction issued by the Commissioner (GST) as such, but it is notifying the decision(s) of the Board taken in exercise of its powers conferred under Section 168(1) of the 2017 Act. It is a different matter that a circular is issued under the signatures of Commissioner (GST), but in essence, it is notifying the UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.] decision(s) of the Board, which has had authority and power to issue directions. Accordingly, the argument that the impugned Circular dated 29.12.2017 has been issued without authority of law, needs to be rejected.

32. Reverting to the analysis of the issues and contentions done by the High Court, it is primarily focused on the grievance of the writ petitioner that due to non-operability of Form GSTR-2A at the relevant time (July to September 2017), it had been denied of access to the information about its electronic credit ledger account and consequently, availing of ITC for the relevant period and instead to discharge the OTL by paying cash to its vendors. Thus, it has resulted in payment of double tax and unfair advantage to the tax authorities because of their failure to operationalize the statutory forms enabling auto-populating statement of inward supplies of the recipient and outward supplies including facility of matching and correcting the discrepancies electronically. The High Court, however, did not enquire into the cardinal question as to whether the writ petitioner was required to be fully or wholly dependent on the auto generated information in the electronic common platform for discharging its obligation to pay OTL for the relevant period between July and September 2017. The answer is – an emphatic No. In that, the writ petitioner being a registered person, was under a legal obligation to maintain books of accounts and records as per the provisions of the 2017 Act and Chapter VII of the 2017 Rules regarding the transactions in respect of which the OTL would occur. Even in the past (till recently upto the 2017 Act came into force), during the pre-GST regime, the writ petitioner (being registered person/assessee) had been maintaining such books of accounts and records and submitting returns on its own. No such auto-populated electronic data was in vogue. It is the same pattern which had to be followed by the registered person in the post-GST regime.

33. As per the scheme of the 2017 Act, it is noticed that registered person is obliged to do self-assessment of ITC, reckon its eligibility to ITC and of OTL including the balance amount lying in cash or credit ledger primarily on the basis of his office record and books of accounts required to be statutorily preserved and updated from time to time. That he could do even without the common electronic portal as was being done in the past till recently pre-GST regime. As regards liability to pay OTL, that is on the basis of the transactions effected during the relevant period giving rise to taxable event. The supply of goods and services becomes taxable in respect of which the registered person is obliged to maintain agreement, invoices/challans and books of accounts, which can be maintained manually/electronically. The common portal is only a facilitator to feed or retrieve such information and need not be the primary source for doing self-assessment. The primary source is in the form of agreements, invoices/challans, receipts of the goods and services and books of accounts which are maintained by the assessee manually/ electronically. These are not within the control of the tax authorities. This was the arrangement even in the pre-GST regime whilst discharging the obligation under the concerned legislation(s). The position is no different in the post-GST regime, both in the matter of doing self- assessment and regarding dealing with eligibility to ITC and OTL. Indeed, that self-assessment and declarations would be any way subject to verification by the tax authorities. The role of tax authorities would come at the time of verification of the declarations and returns submitted/filed by the registered person.

34. Section 16 of the 2017 Act deals with eligibility of the registered person to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business. The input tax credit is additionally recorded in the electronic credit ledger of such person under the Act. The “electronic credit ledger” is defined in Section 2(46) and is referred to in Section 49(2) of the 2017 Act, which provides for the manner in which ITC may be availed. Section 41(1) envisages that every registered person shall be entitled to take credit of eligible input tax, as self-assessed, in his return and such amount shall be credited on a provisional basis to his electronic credit ledger.

35. As aforesaid, every assessee is under obligation to self-assess the eligible ITC under Section 16(1) and 16(2) and “credit the same in the electronic credit ledger” defined in Section 2(46) read with Section 49(2) of the 2017 Act. Only thereafter, Section 59 steps in, whereunder the registered person is obliged to self-assess the taxes payable under the Act and furnish a return for each tax period as specified under Section 39 of the Act. To put it differently, for submitting return under Section 59, it is the registered person who has to undertake necessary measures including of maintaining books of accounts for the relevant period either manually or electronically. On the basis of such primary material, self- assessment can be and ought to be done by the assessee about the eligibility and availing of ITC and of OTL, which is reflected in the periodical return to be filed under Section 59 of the Act. UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.]

36. Section 59 does make reference to Section 39, which deals with furnishing of returns, but the fact remains that for furnishing of returns, preparatory work has to be done by the assessee himself and is not fully or wholly dependent on the common electronic portal for that purpose. Just couple of weeks before the relevant period between July and September 2017, the writ petitioner/respondent No. 1 had been doing that exercise which it was expected to continue even under the post- GST scheme. The factum of non-operability of Form GSTR-2A, therefore, is flimsy plea taken by the writ petitioner/respondent No. 1. Indeed, if the stated form was operational, the same would have come handy to the writ petitioner for doing self-assessment regarding eligibility of ITC and availing thereof. But it is a feeble excuse given by the writ petitioner/respondent No. 1 to assail the condition specified in impugned Circular dated 29.12.2017 regarding the rectification of the return submitted manually in Form GSTR-3B for the relevant period (July to September 2017).

37. The question of reading down paragraph 4 of the said Circular would have arisen only if the same was to be in conflict with the express provision in the 2017 Act and the Rules framed thereunder. The express provision in the form of Section 39(9) clearly posits that omission or incorrect particulars furnished in the return in Form GSTR-3B can be corrected in the return to be furnished in the month or quarter during which such omission or incorrect particulars are noticed. This very position has been restated in the impugned Circular. It is, therefore, not contrary to the statutory dispensation specified in Section 39(9) of the Act. The High Court, however, erroneously noted that there is no provision in the Act, which restricts such rectification of the return in the period in which the error is noticed. It is then noted by the High Court that as there is no possibility of getting refund of surplus or excess ITC shown in the electronic credit ledger, therefore, the only remedy that can enable the writ petitioner to enjoy the benefit of the seamless utilization of the ITC is by way of rectification in its annual tax return (Form GSTR-3B) for the relevant period. Further, the High Court in paragraph 23 of the impugned judgment, noted that the relief sought in the case before it, was indispensable. This logic does not commend to us. For, if there is no provision regarding refund of surplus or excess ITC in the electronic credit ledger, it does not follow that the assessee concerned who has discharged OTL by paying cash (which he is free to pay in cash in spite of the surplus or excess electronic credit ledger account), can later on ask for swapping of the entries, so as to show the corresponding OTL amount in the electronic cash ledger from where he can take refund. Payment for discharge of OTL by cash or by way of availing of ITC, is a matter of option, which having been exercised by the assessee, cannot be reversed unless the Act and the Rules permit such reversal or swapping of the entries. As a matter of fact, Section 39(9) provides for an express mechanism to correct the error in returns for the month or quarter during which such omission or incorrect particulars have been noticed.

38. The entire edifice of the grievance of the writ petitioner (respondent No. 1) was founded on non-operability of Form GSTR-2A during the relevant period, which plea having been rejected as untenable and flimsy, it must follow that the writ petitioner/respondent No. 1 with full knowledge and information derived from its books of accounts and records, had done self-assessment and assessed the OTL for the relevant period and chose to discharge the same by paying cash. Having so opted, it is not open to the respondent to now resile from the legal option already exercised. It is for that reason, the respondent has advisedly propounded a theory that in absence of (electronic-auto populated record) mechanism made available as per Sections 37 and 38, return filed in Form GSTR-3B is not ascribable to Section 39(9) of the 2017 Act read with Rule 61(5) of the 2017 Rules. This is yet another untenable plea taken by respondent No. 1. For, the appellant having realized that the mechanism specified in Sections 37 and 38 of the 2017 Act cannot be put in place due to non- operability of the forms governing such mechanism, had to amend the rules to make a stop-gap arrangement until the entire mechanism became operational. Appellant not only amended the statutory rule but also provided for filing of return manually in Form GSTR-3B electronically through the common portal with effect from July 2017. This is manifest from the circulars/notifications issued from time to time including the timeline for submitting the returns.

39. It is futile to urge that Section 39(9) has no application to the fact situation of the present case. In that, allowing filing of return in Form-GSTR-3B albeit a stop gap arrangement, is ascribable to Section 39 of the 2017 Act read with Rule 61 of the 2017 Rules. Indeed, it is not comparable to the mechanism specified for electronically generated Form GSTR-3 referable to Rule 61. Nevertheless, Form GSTR-3B is prescribed as a “return” to be furnished by the registered person and by the subsequent amendment of Rule 61(5) brought into force with effect UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.] from 01.01.2017, it has been clarified that such person need not furnish return in Form GSTR-3 later on. Notably, the validity of that amendment including that of Notification dated 09.10.2019 bearing No. 49/2019, is not put in issue before us.

40. No doubt, in the initial stages, it was notified that Form GSTR- 3B will be in lieu of Form GSTR-3 but that was soon corrected by deletion of that expression. At the same time, as the mechanism for furnishing return in terms of Sections 37 and 38 was not operationalized during the relevant period (July to September 2017) and became operational only later, the efficacy of Form GSTR-3B being a stop gap arrangement for furnishing of return, as was required under Section 39 read with Rule 61, would not stand whittled down in any manner. It would still be considered as a return for all purposes though filled manually electronically.

41. The Gujarat High Court in the case of AAP & Co., Chartered Accountants through Authorized Partner vs. Union of India & Ors.10, was called upon to consider the question whether the return in Form GSTR-3B is the return required to be filed under Section 39 of the 2017 Act. Although, at the outset it noted that the concerned writ petition had been rendered infructuous but, went on to answer the question raised therein. It took the view that Form GSTR-3B was only a temporary stop-gap arrangement till due date of filing of return Form GSTR-3 is notified. We do not subscribe to that view. Our view stands reinforced by the subsequent amendment to Rule 61(5), restating and clarifying the position that where return in Form GSTR-3B has been furnished by the registered person, he shall not be required to furnish the return in Form GSTR-3. This amendment was notified and came into effect from 01.07.201711 retrospectively. The validity of this amendment has not been put in issue.

42. The Delhi High Court in the impugned judgment, has taken note of decision of the Andhra Pradesh High Court in case of Panduranga Stone Crushers vs. Union of India & Ors.12 This decision dealt with the period between July 2017 and March 2018 for the financial year 2017-2018. The petitioner therein had submitted Form GSTR-3B return through GST portal, as required. While doing so, he had 10 2019-TIOL-1422-HC-AHM-GST 11 Vide Notification/GSR No. 772(E) dated 9th October, 2019 12 2019-TIOL-1975-HC-AP-GST inadvertently and by mistake reported IGST input tax credit in a column relating to import of goods and services instead of placing that particular amount, namely, IGST input tax credit in all other ITC column. The writ petitioner asserted that he was entitled to rectify such mistake which had crept in Form GSTR-3B returns. The Union of India had contended that said situation was covered by Section 39(9) of the 2017 Act and the petitioner could rectify the omission, but did not avail the chance to rectify or modify the returns. Therefore, he was not entitled to relief as claimed in the writ petition. The Andhra Pradesh High Court relied on the decision of the Gujarat High Court in AAP & Co.13 and the decision of the Kerala High Court in Saji S. Proprietor, Adithya and Ambadi Traders & Anr. vs. The Commissioner, State GST Department & Anr.14, wherein the Kerala High Court had permitted the request for transfer of tax liability from the head “SGST” to “IGST”, enabling the registered person to carry out rectification. The Andhra Pradesh High Court allowed the petitioner to follow the same suit. The view taken in these decisions though not assailed before this Court cannot impact the logic commended to us in this judgment on the basis of interpretation and application of the relevant provisions to the facts of this case.

43. The Delhi High Court in the present case then relied on the decision of the Punjab & Haryana High Court in the case of Adfert Technologies Pvt. Ltd. vs. Union of India & Ors.15 In that case, the petitioner was unable to file return before 31.12.2017 being the extended time due to heavy load upon accountants, who were having number of assesses, lack of proper knowledge of computer system, complexity in filling different columns of TRAN-1 etc. The Punjab & Haryana High Court noted that GST was an electronic based tax regime and most of people of India were not conversant with electronic mechanism and not able to load simple forms electronically. Be it noted that the factum of inability to access the electronic portal to submit return within the specified time due to technical faults in the portal is entirely different than the assertion to grant adjustment of amount voluntarily paid in cash by the assessee towards OTL. The latter can be allowed only if the law enacted by the Parliament expressly permitted such swapping of entries of the electronic credit ledger vis-a-vis electronic cash ledger; and certainly not permissible in the teeth of Section 39(9) of the 2017 Act. Relying on 13 supra at Footnote No. 10 14 dated 12.11.2018 in W.P.(C) No. 35868/2018 15 2019-TIOL-2519-HC-P&H-GST UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.] the decision of the Gujarat High Court in Siddharth Enterprises vs. The Nodal Officer16, however, the Court noted that denial of credit of tax/duty paid under existing Acts would amount to violation of Article 14 and 300A of the Constitution of India. It noted that unutilized credit has been recognized as vested right and property in terms of Article 300A of the Constitution. This decision was on facts of that case concerning erroneous entry recorded in Form GSTR-3B and not regarding right asserted to swap the mode of payment of OTL in cash to be adjusted against electronic credit ledger as in the present case in the guise of rectification of return filed in Form GSTR-3B for the earlier period.

44. Reference was then made to decision of this Court in MRF Ltd., Kottayam vs. Asstt. Commissioner (Assessment), Sales Tax & Ors.17, wherein it is held that a person may have a legitimate expectation of being treated in a certain way by an administrative authority, even though he has no legal right in private law to receive such treatment. The High Court then referred to the decision of Delhi high Court in Krish Authomotors Pvt. Ltd. vs. Union of India & Ors.18, which had permitted the writ petitioners to either submit the TRAN-I form electronically by opening the electronic portal or to tender the said form manually before the specified date and thereafter to process the claim for ITC in accordance with law. The Punjab & Haryana High Court agreed with the view taken by the Gujarat High Court and the Delhi High Court. The conclusion so recorded by the Punjab & Haryana High Court will have no bearing on the facts of this case in light of the opinion expressed in this judgment, as we have held that consequent to submission/ filing of Form GSTR-3B, as envisaged by the 2017 Act, it can be rectified only in the manner specified in Section 39(9) read with Rule 61(5), as applicable at the relevant time. In other words, the rectification can be done only in the return to be furnished in the month or quarter during which such omission or incorrect particulars are noticed and not in the return for the period to which it relates.

45. The High Court in the impugned judgment, has also adverted to the decisions of the Delhi High Court in Blue Bird Pure Pvt. Ltd. vs. Union of India & Ors.19 and in Lease Plan India Private Limited vs. 16 2019-TIOL-2068-HC-AHM-GST 17 (2006) 8 SCC 702 18 2019-TIOL-2153-HC-DEL-GST 19 2019 SCC OnLine Del 9250 Government of National Capital Territory of Delhi & Ors.20 For the same reasons, the conclusion reached in the said two decisions will be of no avail to respondent No. 1.

46. We need not multiply the authorities referred to in the concerned judgments, and cited before us, as in our opinion, these decisions have not dealt with the cardinal aspect of statutory obligation fastened upon the registered person to maintain books of accounts and record within the meaning of Chapter VII of the 2017 Rules, which are primary documents and source material on the basis of which self-assessment is done by the registered person including about his eligibility and entitlement to get ITC and of OTL. Form GSTR-2A is only a facilitator for taking an informed decision while doing such self-assessment. Non-performance or non-operability of Form GSTR-2A or for that matter, other forms, will be of no avail because the dispensation stipulated at the relevant time obliged the registered person to submit returns on the basis of such self- assessment in Form GSTR-3B manually on electronic platform. The provision contained in Section 39(9) of the 2017 Act and Rule 61 of the Rules framed thereunder, as applicable at the relevant time, apply with full vigor to the returns filed by the registered person in Form GSTR-3B.

47. Significantly, the registered person is not denied of the opportunity to rectify omission or incorrect particulars, which he could do in the return to be furnished for the month or quarter in which such omission or incorrect particulars are noticed. Thus, it is not a case of denial of availment of ITC as such. If at all, it is only a postponement of availment of ITC. The ITC amount remains intact in the electronic credit ledger, which can be availed in the subsequent returns including the next financial year. It is a different matter that despite the availability of funds in the electronic credit ledger, the registered person opts to discharge OTL by paying cash. That is a matter of option exercised by the registered person on which the tax authorities have no control, whatsoever, nor they have any role to play in that regard. Further, there is no express provision permitting swapping of entries effected in the electronic cash ledger vis-a-vis the electronic credit ledger or vice versa.

48. A priori, despite such an express mechanism provided by Section 39(9) read with Rule 61, it was not open to the High Court to proceed on the assumption that the only remedy that can enable the 20 decided on 13.9.2019 in W.P.(C) No. 3309/2019 UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.] assessee to enjoy the benefit of the seamless utilization of the input tax credit is by way of rectification of its return submitted in Form GSTR- 3B for the relevant period in which the error had occurred. Any unilateral change in such return as per the present dispensation, would have cascading effect on the recipients and suppliers associated with the concerned transactions. There would be complete uncertainty and no finality could ever be attached to the self-assessment return filed electronically. We agree with the submission of the appellant that any indulgence shown contrary to the statutory mandate would not only be an illegality but in reality, would simply lead to chaotic situation and collapse of tax administration of Union, States and Union Territories. Resultantly, assessee cannot be permitted to unilaterally carry out rectification of his returns submitted electronically in Form GSTR-3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records.

49. As noted earlier, the matching and correction process happens on its own as per the mechanism specified in Sections 37 and 38, after which Form GSTR-3 is generated for the purposes of submission of returns; and once it is submitted, any changes thereto may have cascading effect. Therefore, the law permits rectification of errors and omissions only at the initial stages of Forms GSTR-1 and GSTR-3, but in the specified manner. It is a different dispensation provided than the one in pre-GST period, which did not have the provision of auto-populated records and entries.

50. Suffice it to conclude that the challenge to the impugned Circular No. 26/26/2017-GST dated 29.12.2017, is unsustainable for the reasons noted hitherto. We hold that stipulations in the stated Circular including in paragraph 4 thereof, are consistent with the provisions of the 2017 Acts and the Rules framed thereunder. Having said that, it must follow that there is no necessity of reading down paragraph 4 of the impugned Circular as has been done by the High Court vide impugned judgment. In any case, the direction issued by the High Court being in the nature of issuing writ of mandamus to allow the writ petitioner to rectify Form GSTR-3B for the period – July to September 2017, in the teeth of express statutory dispensation, cannot be sustained.

51. No other issue has been dealt with by the High Court except to read down of the stated Circular, which as aforesaid, is wholly unnecessary.

52. In view of the above, this appeal is allowed. The impugned judgment and order is set aside. Resultantly, the writ petition filed by respondent No. 1 before the High Court stands dismissed. There shall be no order as to costs. All applications stand disposed of. Ankit Gyan Appeal allowed. UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. [A. M. KHANWILKAR, J.]