Union Of India Through Its Secretary vs Bharti Airtel Ltd. on 28 October, 2021

The case Union of India vs Bharti Airtel Ltd. was decided by the Supreme Court on October 28, 2021. The primary issue revolved around whether taxpayers could revise GSTR-3B returns for the period from July to September 2017 due to errors made in reporting, primarily attributed to technical glitches in the GST portal.

Key Issues:

  1. Revisability of GSTR-3B Returns: Whether taxpayers could revise already filed GSTR-3B returns for past periods when errors are discovered later.
  2. Non-operability of GSTR-2A and Forms GSTR-2 and GSTR-3: Impact of the government’s failure to operationalize the complete GST return filing mechanism as envisaged under the CGST Act, 2017.
  3. Circular Restricting Revisions: Validity of Circular No. 26/26/2017-GST, dated December 29, 2017, which restricted rectifications in GSTR-3B returns to the month in which the error was noticed.

Supreme Court’s Findings:

  1. Self-Assessment Responsibility: The Court emphasized that taxpayers bear the responsibility to self-assess their tax liability, input tax credit (ITC), and outward tax liability (OTL) based on their own books of accounts, independent of automated tools like GSTR-2A.
  2. Role of GSTR-2A: GSTR-2A is a facilitative mechanism but not the sole basis for tax compliance. Its non-operability does not absolve taxpayers from fulfilling their statutory obligations using their records.
  3. Legitimacy of Circular No. 26/26/2017: The Court upheld the restriction imposed by the circular, ruling that taxpayers can only rectify errors in returns of the month when the error is noticed, in line with Section 39(9) of the CGST Act.
  4. Non-Revisability of GSTR-3B for Past Periods: GSTR-3B, even if a stop-gap return form, was deemed final for the period it pertains to. Errors discovered later cannot lead to retrospective revisions for that specific tax period.

Conclusion:

The Supreme Court reversed the Delhi High Court’s decision, disallowing Bharti Airtel Ltd. from revising its GSTR-3B returns for July to September 2017. It clarified that errors must be rectified in subsequent returns under the statutory framework.

This decision underscores the statutory design of the GST framework, the obligations of taxpayers to rely on their records, and the finality of filed returns barring specific circumstances.