Holding

The circular dated 29‑12‑2017 is within the authority of the Board under Section 168(1) of the CGST Act, its paragraph 4 is consistent with the Act and Rules, and rectification of Form GSTR‑3B is permissible only in the return filed for the month or quarter in which the omission is noticed, not for the period to which it relates.

Summary

The Union of India challenged a Delhi High Court order that read down paragraph 4 of a GST circular dated 29‑12‑2017, which barred rectification of Form GSTR‑3B for the month in which an error occurred. Bharti Airtel Ltd. (respondent No.1) argued that due to the non‑operability of Form GSTR‑2A in July‑September 2017 it could not access its electronic credit ledger and was forced to pay output tax liability (OTL) in cash, seeking to amend its GSTR‑3B returns. The Supreme Court examined whether the circular was issued within the authority of the Central Board of Indirect Taxes and Customs under Section 168(1) of the CGST Act and whether its restriction on rectification conflicted with Section 39(9) and Rule 61 of the CGST Rules. The Court held that the circular was a valid exercise of statutory power and that Section 39(9) permits correction only in the return filed for the month or quarter in which the omission is discovered, not for the period to which it relates. Consequently, the High Court’s direction to allow retroactive rectification was unsustainable. The appeal was allowed, setting aside the High Court judgment and dismissing the writ petition.

Issues considered

The jurisdiction and maintainability of the writ petition before the Delhi High Court.
Whether the circular dated 29‑12‑2017 issued by the Commissioner (GST) is ultra vires and without authority of law.
Whether paragraph 4 of the circular, restricting rectification of Form GSTR‑3B for the period in which the error occurred, is inconsistent with the CGST Act and Rules.
Whether a registered person can rectify a Form GSTR‑3B return for the month to which the error relates despite the circular.
The propriety of the High Court directing the respondent to amend its GSTR‑3B returns and issuing a writ of mandamus.

Legislation cited

Central Goods and Services Tax Act, 2017s. 16, s. 168, s. 37, s. 38, s. 39, s. 41, s. 42, s. 43, s. 49, s. 59
Central Goods and Services Tax Rules, 2017s. 59, s. 60, s. 61

Subjects

GSTForm GSTR-3BrectificationCircularSection 39(9)Input Tax CreditSelf‑assessmentJurisdictionMandamus

Judgment

[2021] 10 S.C.R. 825 825

UNION OF INDIA A
v.
BHARTI AIRTEL LTD. & ORS.
(Civil Appeal No. 6520 of 2021)
OCTOBER 28, 2021 B

[A.M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Central Goods and Services Tax Act, 2017 – ss. 16, 39, 49,
59 and 168 – Central Goods and Services Tax Rules, 2017 –
Circular dated 29.12.2017 issued by the Commissioner (GST) – C
Validity of – Act of 2017 and Rules of 2017 brought into force along
with Forms GSTR-1, GSTR-2, GSTR-2A, GSTR-3 and GSTR-3B –
Various notifications were issued – In exercise of the powers
conferred by Rule 61(5) of the stated Rules, the Central Government
issued Notification No.21/2017-Central Tax specifying that the return
for the months of July and August 2017 to be furnished in Form D
GSTR-3B electronically through the common portal before the dates
as specified in the corresponding entry in column (3) of the table
given therein – Thereafter again various notifications/circulars were
regarding extension of time (notification dated 17.08.2017), relating
to system-based reconciliation of information furnished in Forms E
GSTR-1, GSTR-2 and GSTR-3B and the mechanism for correction
of erroneous details furnished in Form GSTR-3B, specifying the
timeline for filing of return in Form GSTR-3B (circular dated
01.09.2017) etc. were issued – The Commissioner (GST) then issued
the circular dated 29.12.2017, on the subject of filing of returns
under GST, clarifying certain issues considered by the Central Board F
of Indirect Taxes and Customs to usher in uniformity in
implementation across field formations – By this Circular, the earlier
Circular issued on 01.09.2017 was kept in abeyance – Paragraph
4 of the Circular dated 29.12.2017 specifies “...It may be noted
that while making adjustment in the output tax liability or input tax G
credit, there can be no negative entries in the FORM GSTR-3B –
The amount remaining for adjustment, if any, may be adjusted in
the return(s) in FORM GSTR-3B of subsequent month(s) and, in
cases where such adjustment is not feasible, refund may be
claimed...” – Respondent No. 1 was, however, keen on availing of
the dispensation specified in the Circular dated 01.09.2017 for the H
825
826 SUPREME COURT REPORTS [2021] 10 S.C.R.

A relevant period (July to September 2017) – After Form GSTR-2A
became operational in September 2018, respondent No. 1 realized
that it had sufficient amount in the ITC ledger account (electronic
credit ledger) during the relevant period – Further, due to non-
functionality of GSTR-2A, respondent No. 1 had to discharge its
OTL by depositing/paying in cash – Respondent No.1 urged to rectify
B
Form GSTR-3B – However, the impugned Circular dated 29.12.2017
came in the way of respondent No. 1 in doing so – Resultantly,
respondent No.1 approached the High Court by way of writ petition
– High Court allowed the writ petition and read down paragraph 4
of circular dated 29.12.2017 to the extent it restricted the
C rectification of Form GSTR-3B in respect of period in which the
error had occurred – Before the Supreme Court respondent no. 1
contended that the circular dated 29.12.2017 was issued without
any authority of law – Held: The decision was taken by the Board
after considering various representations received seeking
clarifications on various aspects of return filing such as return filing
D
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 u/s. 168(1) of the 2017 Act – The
E circular was issued under the signatures of Commissioner (GST),
but in essence, it was notifying the decision(s) of the Board, which
has authority and power to issue directions – The stipulations in
the stated circular including paragraph 4 are consistent with the
provisions of the 2017 Act and the Rules – The express provision in
the form of s. 39(9) clearly posits that omission or incorrect
F
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 – Accordingly,
the argument that the impugned Circular dated 29.12.2017 was
issued without authority of law is rejected.
G Central Goods and Services Tax Act, 2017 – ss. 16, 39, 49
and 59 – Central Goods and Services Tax Rules, 2017 – rr. 59, 60
and 61 – Rectification of Form GSTR-3B – The grievance of the
writ petitioner-respondent no.1 before the High Court was that due
to non-operability of Form GSTR-2A at the relevant time (July to
H September 2017), it was denied of access to the information about
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 827

its electronic credit ledger account and consequently, availing of A
Input Tax Credit (ITC) for the relevant period and instead to
discharge the Output Tax Liability (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
B
statement of inward supplies of the recipient and outward supplies
including facility of matching and correcting the discrepancies
electronically – The High Court allowed the writ petition for the
period to which the ‘error relates’ i.e. July to September 2017 –
High Court also allowed writ petitioner to rectify Form GSTR-3B
for the period in which error had occurred – On appeal, held: The C
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 D
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 –
Further, as per scheme of the 2017 Act, registered person is obliged E
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 – That he could do without the
common electronic portal as was being done in the past till recently
pre-GST regime – The factum of non-operability of Form GSTR-2A, F
therefore, is a flimsy plea taken by the writ petitioner – The writ
petitioner with full knowledge and information had done self-
assessment and assessed the OTL for the relevant period and chose
to discharge the same by paying cash – Having so opted, now it
was not open to the respondent to resile from option already G
exercised – As far as rectification of errors is concerned, the matching
and correction process happens on its own as per mechanism
specified in ss.37 and 38, after which Form GSTR-3 is generated
for the submission of returns; and once submitted any changes may
have a cascading effect – Therefore, law permits rectification of
error and omissions only at the initial stages of Form GSTR-1 and H
828 SUPREME COURT REPORTS [2021] 10 S.C.R.

A GSTR-3, but in a specified manner – The direction of the High Court
to allow the rectification cannot be sustained – The impugned
judgment and order of the High Court is set aside.
Allowing the appeal, the Court
HELD: 1. At the outset, the preliminary issue raised by
B 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,
C 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
D 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
E had issued the impugned Circular, namely, the Commissioner
(GST). If the writ petitioner succeeded in that challenge, the
consequential relief would follow. In opinion of this Court, 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. If the
F 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. Accordingly, the preliminary objections
regarding the maintainability of the writ petition and the
jurisdiction of the Delhi High Court deserve to be rejected.
G [Para 30][852-H; 853-A-E]
2. 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
H
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 829

the Board in exercise of its powers conferred under Section 168(1) A
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
B
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 C
a circular is issued under the signatures of Commissioner (GST),
but in essence, it is notifying the 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.
D
[Para 31][853-E-H; 854-A]
3. 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 E
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 F
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 G
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
H
830 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B
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. [Para 32][854-B-F]
4. As per the scheme of the 2017 Act, it is noticed that
registered person is obliged to do self-assessment of ITC, reckon
C 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
D 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
E 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/
F 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
G 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. [Para 33][854-F-H; 855-A-C]

H
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 831

5. Section 16 of the 2017 Act deals with eligibility of the A
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
B
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. [Para 34] C
[855-D-E]
6. 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 D
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 E
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 F
regarding the rectification of the return submitted manually in
Form GSTR-3B for the relevant period (July to September 2017).
[Para 36][856-A-D]
7. The question of reading down paragraph 4 of the said
Circular would have arisen only if the same was to be in conflict G
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 H
832 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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. [Para 37]
[856-D-F]
B
8. 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
C 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
D 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
E 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
F
effect from July 2017. This is manifest from the circulars/
notifications issued from time to time including the timeline for
submitting the returns. [Para 38][857-C-F]
9. Significantly, the registered person is not denied of the
opportunity to rectify omission or incorrect particulars, which he
G 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
H in the subsequent returns including the next financial year. It is a
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 833

different matter that despite the availability of funds in the A
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
B
effected in the electronic cash ledger vis-a-vis the electronic credit
ledger or vice versa. [Para 47][861-E-G]
10. 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 assessee to enjoy the benefit of the seamless C
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 D
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 E
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. [Para 48] F
[861-G-H; 862-A-C]
11. 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 G
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.
[Para 49][862-D-E] H
834 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 12. 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. This Court holds 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
B
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,
C in the teeth of express statutory dispensation, cannot be
sustained. [Para 50][862-E-G]
MRF Ltd., Kottayam vs. Asstt. Commissioner
(Assessment), Sales Tax & Ors (2006) 8 SCC 702:
[2006] 6 Suppl. SCR 417 – referred to.
D AAP & Co., Chartered Accountants through Authorized
Partner vs. Union of India & Ors. 2019-TIOL-1422-
HC-AHM-GST; Panduranga Stone Crushers vs. Union
of India & Ors. 2019-TIOL-1975-HC-AP-GST; Saji
S. Proprietor, Adithya and Ambadi Traders & Anr. vs.
E The Commissioner, State GST Department & Anr. dated
12.11.2018 in W.P.(C) No. 35868/2018; Adfert
Technologies Pvt. Ltd. vs. Union of India & Ors. 2019-
TIOL-2519-HC-P&H-GST; Siddharth Enterprises vs.
The Nodal Officer 2019-TIOL-2068-HC-AHM-GST;
Krish Authomotors Pvt. Ltd. vs. Union of India & Ors.
F 2019-TIOL-2153-HC-DEL-GST; Blue Bird Pure Pvt.
Ltd. vs. Union of India & Ors. 2019 SCC OnLine Del
9250; Lease Plan India Private Limited vs. Government
of National Capital Territory decided on 13.9.2019 in
W.P.(C) No. 3309/2019 – referred to.
G Case Law Reference
[2006] 6 Suppl. SCR 417 referred to Para 44

H
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 835

CIVIL APPELLATE JURISDICTION: Civil Appeal No.6520 of A
2021.
From the Judgment and Order dated 05.05.2020 of the High Court
of Delhi at New Delhi in Writ Petition (Civil) No. 6345 of 2018.
N. Venkataraman, SG, Mohd. Akhil, Zoheb Hussain, Kanu
B
Agarwal, Mukesh Kumar Maroria, Advs. for the Appellant.
Harish N. Salve, Tarun Gulati, Sr. Advs., Ms. Anuradha Dutt,
Tushar Jarwal, Rahul Sateeja, Deepak Thackur, Anurag Soan, Sparsh
Bhargava, Ms. B. Vijayalakshmi Menon, Advs. for the Respondents.
The Judgment of the Court was delivered by C
A. M. KHANWILKAR, J.
1. This appeal emanates from the judgment and order dated
05.05.2020 passed by the High Court of Delhi in W.P. (C) No.6345 of
2018, whereby the High Court allowed the writ petition filed by respondent D
No.1 herein and read down paragraph 4 of the Circular No. 26/26/2017-
GST dated 29.12.20171 issued by the Commissioner (GST), Government
of India, Ministry of Finance, Department of Revenue, Central Board of
Excise and Customs, GST Policy Wing2, to the extent it restricted the
rectification of Form GSTR-3B in respect of the period in which the
error had occurred. The High Court also allowed respondent No.1 to E
rectify Form GSTR-3B for the period in which error had occurred, i.e.,
from July to September 2017. Further, the High Court directed the
appellant that on filing of the rectified Form GSTR-3B, they shall, within
a period of two weeks, verify the claim set forth by respondent No.1
and give effect to the same once verified. F
2. This lis is aftermath of enacting the Central Goods and Services
Tax Act, 20173, which came into force with effect from 01.07.2017.
Vide Notification No.10/2017 dated 01.07.2017, Rules 59, 60 and 61 of
the Central Goods and Services Tax Rules, 20174 were brought into
force along with Forms GSTR-1, GSTR-2, GSTR-2A, GSTR-3 and G
GSTR-3B.

1
for short, “impugned Circular”
2
for short, “Commissioner (GST)”
3
for short, “2017 Act”
4
for short, “2017 Rules”
H
836 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 3. In the context of the matter in issue, it may be apposite to take
note of the Notification No.17/2017-Central Tax dated 27.07.2017 issued
for amending Rule 61 by altering the wording of Rule 61(5) and
introducing Rule 61(6). Rule 61(5), as it stood earlier when it came into
force, read thus:
B “(5) Where the time limit for furnishing of details in FORM GSTR-
1 under section 37 and in FORM GSTR-2 under section 38 has
been extended and the circumstances so warrant, return in FORM
GSTR-3B, in lieu of FORM GSTR-3, may be furnished in such
manner and subject to such conditions as may be notified by the
Commissioner”
C
4. This provision was not only substituted, but sub-Rule (6) was
also inserted in Rule 61 by the said amendment vide Notification No.17/
2017-Central Tax. The amended provision reads thus:
“Government of India
D Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Notification No. 17/2017 – Central Tax
New Delhi, the 27th July, 2017
E
G.S.R. ( )E.:- In exercise of the powers conferred by section 164
of the Central Goods and Services Tax Act, 2017 (12 of 2017),
the Central Government hereby makes the following rules further
to amend the Central Goods and Services Tax Rules, 2017,
namely:-
F
(1) …..
…..
2. In the Central Goods and Services Tax Rules, 2017,
…..
G (v) in rule 61, with effect from 1st July, 2017, for sub-rule (5), the
following sub-rules shall be substituted, namely:-
“(5) Where the time limit for furnishing of details in FORM
GSTR-1 under section 37 and in FORM GSTR-2 under section
38 has been extended and the circumstances so warrant, the
H Commissioner may, by notification, specify that return shall be
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 837
[A. M. KHANWILKAR, J.]

furnished in FORM GSTR-3B electronically through the A
common portal, either directly or through a Facilitation Centre
notified by the Commissioner.
(6) Where a return in FORM GSTR-3B has been furnished,
after the due date for furnishing of details in FORM GSTR-
2— B
(a) Part A of the return in FORM GSTR-3 shall be electronically
generated on the basis of information furnished through FORM
GSTR-1, FORM GSTR-2 and based on other liabilities of
preceding tax periods and PART B of the said return shall be
electronically generated on the basis of the return in FORM C
GSTR-3B furnished in respect of the tax period;
(b) the registered person shall modify Part B of the return in
FORM GSTR-3 based on the discrepancies, if any, between
the return in FORM GSTR-3B and the return in FORM GSTR-
3 and discharge his tax and other liabilities, if any;
D
(c) where the amount of input tax credit in FORM GSTR-3
exceeds the amount of input tax credit in terms of FORM
GSTR-3B, the additional amount shall be credited to the
electronic credit ledger of the registered person.”;
…..”
E
5. This was followed by Notification No.18/2017-Central Tax dated
08.08.2017, whereby time to file Form GSTR-1 for the months of July
and August 2017 was extended to 05.09.2017 and 20.09.2017
respectively. On the same day, in exercise of the powers conferred by
Rule 61(5) of the stated Rules, the Central Government issued Notification
No.21/2017-Central Tax specifying that the return for the months of F
July and August 2017 shall be furnished in Form GSTR-3B electronically
through the common portal before the dates as specified in the
corresponding entry in column (3) of the table given therein. To wit, the
date for filing of Form GSTR-3B for the month of July 2017 was notified
as 20.08.2017 and that for the month of August 2017 was notified as G
20.09.2017.
6. The Under Secretary to the Government of India issued another
Notification bearing No.23/2017-Central Tax dated 17.08.2017 to extend
the time for filing Form GSTR-3B for the month of July 2017 for persons
opting to file Form GST TRAN-1 on or before 20.08.2017 till 28.08.2017, H
838 SUPREME COURT REPORTS [2021] 10 S.C.R.

A subject to fulfilment of certain conditions like depositing of tax payable
under the Act and payment of interest, if any. Respondent No.1 filed its
return in Form GSTR-3B for the month of July 2017 on 31.08.2017.
7. The Commissioner (GST) issued another Circular No.7/7/2017-
GST dated 01.09.2017relating to system-based reconciliation of
B information furnished in Forms GSTR-1, GSTR-2 and GSTR-3B and
the mechanism for correction of erroneous details furnished in Form
GSTR-3B.
8. On the representations received from the business community,
the Under Secretary to the Government of India issued Notification
C No.35/2017-Central Tax dated 15.09.2017 in exercise of the powers
conferred by Section 168 of the 2017 Act read with Rule 61(5) of the
2017 Rules and other enabling provisions, on the recommendations of
the Goods and Services Tax Council5, specifying the dates for filing of
return for the concerned month as per the table given therein, in Form
GSTR-3B electronically, through the common portal on or before the
D last date specified in the corresponding entry in column (3) of the said
table. The last date for the concerned English calendar month was
specified as 20th day of the succeeding English calendar month for the
period between August and December 2017. Respondent No.1 filed its
return in Form GSTR-3B on 20.09.2017 for the month of August 2017
E and on 16.10.2017 for the month of September 2017.
9. The Under Secretary to the Government once again issued
Notification No.56/2017-Central Tax dated 15.11.2017, specifying the
timeline for filing of return in Form GSTR-3B for the month of January,
February and March 2018 as 20th February, 20th March and 20th April,
2018 respectively.
F
10. The Commissioner (GST) then issued the impugned Circular
on the subject of filing of returns under GST, clarifying certain issues
considered by the Central Board of Indirect Taxes and Customs 6 to
usher in uniformity in implementation across field formations. By this
Circular, the earlier Circular issued on 01.09.2017 was kept in abeyance
G until the system-based reconciliation prescribed under that Circular was
to be operationalized consequent to issue of relevant notification. Sub-
paragraphs 3.1 and 3.2 of paragraph 3 of this Circular dealing with
amendment/corrections/rectification of errors, provided as follows;
5
for short, “the Council”
H 6
for short, “the Board”
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 839
[A. M. KHANWILKAR, J.]

“3. Amendment / corrections / rectification of errors: A
3.1 Various representations have been received wherein registered
persons have requested for clarification on the procedure for
rectification of errors made while filing their FORM GSTR-3B.
In this regard, Circular No. 7/7/2017-GST dated 1st September
2017 was issued which clarified that errors committed while filing B
FORM GSTR – 3B may be rectified while filing FORM GSTR-1
and FORM GSTR-2 of the same month. Further, in the said circular,
it was clarified that the system will automatically reconcile the
data submitted in FORM GSTR-3B with FORM GSTR-1 and
FORM GSTR-2, and the variations if any will either be offset
C
against output tax liability or added to the output tax liability of the
subsequent months of the registered person.
3.2 Since, the GST Council has decided that the time period of
filing of FORM GSTR-2 and FORM GSTR -3 for the month of
July 2017 to March 2018 would be worked out by a Committee of
D
officers, the system based reconciliation prescribed under Circular
No. 7/7/2017-GST dated 1st September 2017 can only be
operationalized after the relevant notification is issued. The said
circular is therefore kept in abeyance till such time.”
(emphasis supplied)
E
11. It may be useful to advert to paragraph 4 of the same Circular,
which reads thus:
“4. It is clarified that as return in FORM GSTR-3B do not contain
provisions for reporting of differential figures for past month(s),
the said figures may be reported on net basis alongwith the values F
for current month itself in appropriate tables i.e. Table No. 3.1,
3.2, 4 and 5, as the case may be. It may be noted that while
making adjustment in the output tax liability7 or input tax credit8,
there can be no negative entries in the FORM GSTR-3B. The
amount remaining for adjustment, if any, may be adjusted
G
in the return(s) in FORM GSTR-3B of subsequent month(s)
and, in cases where such adjustment is not feasible, refund
may be claimed. Where adjustments have been made in FORM

7
For short, “OTL”
8
For short, “ITC” H
840 SUPREME COURT REPORTS [2021] 10 S.C.R.

A GSTR-3B of multiple months, corresponding adjustments in FORM
GSTR-1 should also preferably be made in the corresponding
months.”
(emphasis supplied)
12. Respondent No. 1 was, however, keen on availing of the
B dispensation specified in the Circular dated 01.09.2017 for the relevant
period (July to September 2017), having realized that there was surplus
amount of ITC in its ledger account (electronic credit ledger). It is the
case of respondent No.1 that it had been receiving various services
from suppliers situated throughout India including Delhi. It being a supplier
of services as well as recipient of services under the 2017 Act, was
C required to file the details of outward and inward supplies for every tax
period and also of monthly return under the GST Act. In order to calculate
the OTL and the claim of ITC, during the period from July till September
2017, there was no formal or official mechanism to check the authenticity
of data so as to claim ITC for the relevant period against the transactions
D effected by it with its suppliers. Whereas, an inbuilt mechanism was
guaranteed by the common electronic portal to be put in place by the
Competent Authority under the 2017 Act. However, during the initial
period, after introduction of the common electronic portal, it had several
deficiencies and was not geared up to follow the specified regime of
auto populated data - as predicated in Sections 37 and 38 of the 2017
E Act.
13. Form GSTR-1 for the relevant months of July to September
2017 was required to be filed before 10.01.2018 vide Notification No.72/
2017-Central Tax dated 29.12.2017. Significantly, Form GSTR-2A
became operational only in September 2018. For that reason, as a stop
F gap arrangement, the registered persons were required to submit returns
in Form GSTR-3B. It is only after Form GSTR-2A became operational
in September 2018, it is stated that respondent No. 1 realized that it had
sufficient amount in the ITC ledger account (electronic credit ledger)
during the relevant period. Further, due to non-functionality of GSTR-
G 2A, respondent No. 1 had to discharge its OTL by depositing/paying in
cash. Had Form GSTR-2A been functional, there would have been no
need for respondent No. 1 to pay the amount in cash, but could have
utilized the ITC account (electronic credit ledger) for payment of
corresponding OTL. For that reason, respondent No.1 would urge that
if it was allowed to rectify Form GSTR-3B, so as to avail ITCfor the
H relevant period in terms of Circular dated 01.09.2017, the amount paid
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 841
[A. M. KHANWILKAR, J.]

by it in cash towards the OTL would get credited to its electronic cash A
ledger account. However, the impugned Circular dated 29.12.2017 comes
in the way of respondent No. 1 in doing so. Resultantly, respondent No.1
approached the High Court by way of writ petition under Article 226 of
the Constitution of India, filed on 31.05.2018, praying for the following
reliefs:
B
“PRAYER
“In light of the facts and circumstances mentioned above and in
consideration of grounds taken above, the Petitioner most humbly
prays that this Hon’ble Court may be pleased to:
(a) issue an appropriate writ, order or direction in nature of C
declaration that Rule 61(5), FORM GSTR-3B and Circular
No.26/2017 dated 29.12.2017 are ultra vires the provisions
of the CGST Act to the extent they do not provide for the
modification of information in the return of the tax period to
which such information relates and are arbitrary, in violation
of Articles 14, 19(1)(g), 265 and 300A of Constitution of D
India.
(b) issue an appropriate writ, order or directions declaring the
Notifications No.23/2017-Central Tax dated 17.08.2017, 35/
2017-Central Tax dated 15.09.2017 and 56/2017-Central
Tax dated 15.11.2017, the same as ultra vires the provisions E
of Section 39(7) of the CGST Act to the extent it provides
for payment of tax finally under the CGST Act by the date
mentioned for filing FORM GSTR-3B;
(c) issue an appropriate writ, order or direction in nature of
certiorari or any other writ, order or direction of like nature, F
to call for, examine the records in relation to Circular No.26/
2017 dated 29.12.2017 and quash the same to the extent it
does not provide for the modification of the information in
the return of the tax period to which such information relates
as being arbitrary, in violation of Articles 14, 19(1)(g), 265
G
and 300A of Constitution of India.
(d) issue an appropriate writ, order or direction declaring the
tax liability of the Petitioner filed under FORM GSTR-3B
is provisional and the output tax liability of the Petitioner
will only crystalize after the filing of FORM GSTR-1, 2 and
3. H
842 SUPREME COURT REPORTS [2021] 10 S.C.R.

A (e) issue an appropriate writ, order or directions in the nature
of mandamus or any other writ, directing the Respondents
to operationalize/start the facility of FORM GSTR-2 and
FORM GSTR-3 for period commencing from 01.07.2017;
(f) issue an appropriate writ, order or directions in the nature
B of mandamus or any other writ, directing the Respondents
to provide the Petitioner the facility for amendment and
modification of FORM GSTR-3B and grant such
consequential relief as may be necessary;
(g) Pass any orders as this Hon’ble Court may deem fit in the
C given facts and circumstances of the present case;”
14. During the pendency of the writ petition, Forms GSTR-2,
GSTR-2A and GSTR-3 came to be operationalized w.e.f. September
2018. The Central Government then issued Notification No.49/2019-
Central Tax dated 09.10.2019, thereby omitting Rule 61(6) w.e.f.
D 01.07.2017 and substituting Rule 61(5) from the same date to read as
follows:
“Government of India
Ministry of Finance
(Department of Revenue)
E
Central Board of Indirect Taxes and Customs
Notification No. 49/2019 – Central Tax
New Delhi, the 9th October, 2019
G.S.R……(E). - In exercise of the powers conferred by section
F 164 of the Central Goods and Services Tax Act, 2017 (12 of 2017),
the Central Government hereby makes the following rules further
to amend the Central Goods and Services Tax Rules, 2017, namely:
(1) …..
(4) In the said rules, in rule 61,-
G
(a) for sub-rule (5), the following sub-rule shall be substituted,
with effect from the 1st July, 2017 namely:-
“(5) Where the time limit for furnishing of details in FORM GSTR-
1 under section 37 or in FORM GSTR-2 under section 38 has
H been extended, the return specified in sub-section (1) of section
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 843
[A. M. KHANWILKAR, J.]

39 shall, in such manner and subject to such conditions as the A
Commissioner may, by notification, specify, be furnished in FORM
GSTR-3B electronically through the common portal, either directly
or through a Facilitation Centre notified by the Commissioner:
Provided that where a return in FORM GSTR-3B is
required to be furnished by a person referred to in sub- B
rule (1) then such person shall not be required to furnish
the return in FORM GSTR-3;
…..”
(emphasis supplied)
C
We have adverted to this Notification whilst noting that validity
thereof has not been challenged, though it has come into effect from
01.07.2017 and governs the period between July and September 2017,
which is subject matter of this proceedings.
15. Notably, the High Court did not set aside the impugned Circular
dated 29.12.2017, but preferred to read down only paragraph 4 thereof D
to the extent it restricted the rectification of Form GSTR-3B in respect
of period in which the error had occurred. For, the High Court was of
the view that the stated restriction was contrary to the provisions of the
2017 Act and the Rules framed thereunder.
16. The High Court in its judgment took note of the repeated E
technical glitches in the electronic common portal introduced by the
Department, during the transition phase from the erstwhile regime to the
GST regime. The High Court then noted that respondent No.1 had
submitted its monthly Form GSTR-3B based on estimates, for the relevant
period of July to September 2017. Further, the exact ITC in the electronic F
credit ledger for the relevant period could be known to respondent No. 1
a month later in October 2018, when GSTR-2A became operational.
Only thereafter, respondent No. 1 realized that there had been an excess
payment of Rs.923 crores in cash for discharging OTL. In other words,
despite the fact that a bona fide error had occurred for reasons beyond
the control of respondent No. 1, yet respondent No. 1 was unable to G
correct the mistake in Form GSTR-3B for the relevant period. The High
Court held that CGST contemplated a self-policing system. Resultantly,
the statutory provisions had provided for generation of auto-populated
data of the stakeholders. That was a right and not a mere facility made
available to registered persons. Thus, every registered person had a H
844 SUPREME COURT REPORTS [2021] 10 S.C.R.

A right to correct the returns in the very month to which they relate and
not visited with any adverse consequences for uploading incorrect data.
The High Court noted the admission of the Department that the operation
of Forms GSTR-2 and GSTR-3 could not be effected due to technical
issues at their end necessitating postponement for indefinite period. In
other words, the Department itself was not fully geared up to handle
B
such an elaborate electronic procedure. The High Court further noted
as to how due to non-functioning of Forms GSTR-2 and GSTR-3, Rule
61(5) and 61(6) was required to be inserted in the 2017 Rules and provide
for monthly return in Form GSTR-3B, which was a summary return.
The High Court also accepted the contention of respondent No. 1 that it
C had to discharge the OTL for the relevant period in cash, even though it
had ITC available to its credit in electronic credit ledger, due to the fault
of the Department in not operationalizing the statutorily prescribed Forms
GSTR-2, GSTR-2A and GSTR-3. That had resulted in excess payment
of cash by respondent No.1. The High Court also took note of the refund
provisions to observe that even if there was a possibility to adjust the
D
accumulated ITC in future, it could not be a ground to deprive respondent
No.1 of its option to fully utilize the ITC which it was statutorily entitled
to. The High Court held that there was no reason to restrict the mechanism
of rectification to the returns of subsequent months. It also held that
paragraph 4 of the impugned Circular dated 29.12.2017 was not in
E consonance with the provisions of the 2017 Act.
17. Accordingly, the High Court allowed the writ petition and
permitted respondent No.1 to rectify Form GSTR-3B for the period to
which the ‘error relates’ i.e., the months of July to September 2017. The
operative directions issued by the High Court read thus:
F “24. Thus, in light of the above discussion, the rectification of the
return for that very month to which it relates is imperative and,
accordingly, we read down para 4 of the impugned Circular No.
26/26/2017-GST dated 29.12.2017 to the extent that it restricts
the rectification of Form GSTR-3B in respect of the period in
G which the error has occurred. Accordingly, we allow the present
petition and permit the Petitioner to rectify Form GSTR-3B for
the period to which the error relates, i.e. the relevant period from
July, 2017 to September, 2017. We also direct the Respondents
that on filing of the rectified Form GSTR-3B, they shall, within a
period of two weeks, verify the claim made therein and give effect
H to the same once verified. In view of the fact that the final relief
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 845
[A. M. KHANWILKAR, J.]

sought by the Petitioner has been granted and the petition is allowed, A
no separate order is required to be passed in the application seeking
interim relief. Accordingly, the said application is disposed of as
such.”
18. The appellant has assailed the view so taken by the High
Court. At the outset, it was urged that the High Court had no territorial B
jurisdiction to entertain the writ petition filed by respondent No.1. This
objection is founded on the argument that the source of power to levy
and collect GST under the 2017 Act vests both in the State and the
Centre. The Delhi High Court could not have decided the issues
concerning other State(s) and that too without making them as party
respondent. The writ petitioner has chosen to only implead the Council C
which is a body created only to decide about the policy and is not a tax
collector as such. Thus, besides the High Court had no territorial
jurisdiction, the writ petition suffered from the vice of non-joinder of
necessary parties.
19. As regards the merits, the appellant has invited our attention D
to the constitutional background and the erstwhile regimes of the central
excise law, service tax law etc., and in contrast, the dispensation provided
in the GST regime and the obligation of every outward supplier to pay
OTL. It is urged that the GST is a beginning of a new era of cooperative
federalism and the purport of Article 246A read with Article 279A of the E
Constitution fortify that position. It is a regime to bring about paradigm
shift in the erstwhile taxes such as excise duty, service tax, entry tax,
VAT and other additional and minor levies based on multiple taxable
events, which have been subsumed into one taxable event called “supply
of goods and services”. The new dispensation enables both the Union of
India and the respective States to become joint federal partner in taxing F
goods and services simultaneously and have equal rates on the occurrence
of the taxable event. Notably, the 2017 Act is not ascribable to any Entry
in List I, List II or for that matter, List III. It is a sui generis regime in
the Constitution by virtue of Article 246A read with Article 279A and the
field of taxation thereunder is goods and services and the power to tax is G
simultaneous and coextensive.
20. Shri N. Venkataraman, learned Additional Solicitor General of
India, took us through the provisions of the 2017 Act regarding payment
of duties/taxes and availing of ITC including the eligibility and utilization
of ITC. As regards the eligibility and utilization of ITC, there is a statutory H
846 SUPREME COURT REPORTS [2021] 10 S.C.R.

A duty fastened on every registered person governed under various regimes
and presently under the GST law, to pay OTL and a corresponding right
to avail and utilize ITC, subject to eligibility and conditions specified
therefor. The right to claim ITC, being a statutory right, is circumscribed
by conditions and restrictions, subject to which a registered person is
entitled to take credit. The provisions regarding entitlement of ITC enable
B
a registered person to utilize the same for discharging the OTL. It is
imperative upon a registered person to maintain records regarding
transactions between suppliers and the recipients based on their
agreements, invoices and books of accounts, either manually or
electronically. The records so maintained by the registered person would
C itself reveal about the eligibility to credit; and its availment is within the
exclusive domain of the supplier and the recipient concerned. The
registered person under the law is obliged to do a self-assessment of its
transactions and determine the OTL and exercise the option to avail of
and utilize the ITC to the extent required or to pay the OTL by cash. The
Authorities have no role to play whatsoever in that regard. It is an option
D
to be exercised by the registered person and not by the Authorities. This
principle has remained the same both before the GST and also post GST
regime. Indeed, the registered person has been provided with a common
electronic portal or tax electronic portal, which is only an enabler and a
facilitator in bringing on board all the registered persons which include
E the supplier, recipient, registered person and other recipients. The efficacy
of common electronic portal or so to say malfunctioning thereof, does
not extricate the registered person from the primary obligation of self-
assessment of OTL as predicated in Section 16 of the 2017 Act. For
doing so, the registered person is obliged to maintain accounts and records
as envisaged under Chapter VII of the 2017 Rules. That ought to be the
F
basis for self-assessment of OTL in the first place. On the basis of the
facts and figures emanating from such records, the registered person
can collate the relevant information regarding entitlement to avail ITC
collected from supplier of goods or services or for both which are used
or intended to be used in the course of furtherance of his business.
G Suffice it to observe that the registered person is expected to exercise
the option of utilizing ITC or to pay by cash for discharging his OTL at
the time of filing of return on the information gathered from the primary
record in his possession.
21. The eligibility and availment of ITC is indeed subject to
H conditions and restrictions in the manner specified in Section 49 of the
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 847
[A. M. KHANWILKAR, J.]

2017 Act. If the registered person intends to avail ITC, he can do so by A
paying the OTL from his electronic credit ledger referred to in Sections
2(46) and 49(2) of the 2017 Act. He can avail of ITC on the conditions
specified in Section 16(2) read with Sections 41 and 49(2) of the 2017
Act. As per Section 59 of the 2017 Act, every registered person is required
to self-assess the taxes payable under the 2017 Act and furnish a return
B
for each tax period as specified under Section 39 of the 2017 Act.
22. It is urged that the scheme of the 2017Act makes it amply
clear that the obligation in the matter of deciding about the eligibility and
mode of payment of OTL including self-assessment, is to be exercised
by the registered person himself and the Authorities have no role to play
at that stage. The registered person cannot find fault with the deficiencies C
in the common electronic portal so as to extricate from this obligation.
Similar obligation was required to be discharged by him even before the
GST regime came into being vide the 2017 Act with effect from
01.07.2017. The functions or features provided in the common electronic
portal of auto matching and auto populating of the record of the supplier D
and the recipient and vice versa are only a facility made available to the
registered person. The features provided in the context of Sections 42
and 43 of the 2017 Act relating to ITC and OTL, are dynamic and
seamless processes of matching of invoices of the supplier and the
recipient. The invoice matching mechanism contemplated under Sections
42 and 43, was expected to be accomplished by the introduction of a set E
of forms, namely, GSTR-1, GSTR-1A, GSTR-2, GSTR-2A and GSTR-
3. As per the mechanism predicated in the 2017 Act, the entire exchange
processes were intended to happen between 11th and 17th of every
following month and once the reconciliation gets over, every registered
person had to file a monthly return in Form GSTR-3 by 20th of the following F
month and discharge his OTL. As aforesaid, to overcome the initial
problems faced after introduction of the common electronic portal and
the non-operability of the concerned forms, it was decided to make a
stop gap arrangement enabling the registered person to file his return
electronically in Form GSTR-3B, which contains necessary information
relevant for completing the self-assessment process and payment of G
OTL, if any. Though a stop gap arrangement, it was always treated as
return within the meaning of Section 39 of the 2017 Act. Any rectification
regarding omission or incorrect particulars referred to therein, could be
furnished in the month or quarter during which such omission or incorrect
particulars came to be noticed. Taking any other view would result in H
848 SUPREME COURT REPORTS [2021] 10 S.C.R.

A ushering in inconsistency and uncertainty not only to the concerned
registered person, but also to his recipient and supplier and other records
not directly connected with the registered person. Hence, allowing
correction/rectification of Form GSTR-3B of the concerned period is
not permissible in the new dispensation; and for which reason, an express
provision had been made in Section 39(9)9 that rectification regarding
B
omission or incorrect particulars in the return so filed can be effected
for the month or quarter during which such omission or incorrect
particulars are noticed and not in the concerned return. The corrections
permitted in Forms GSTR-1 and GSTR-2 are of different nature, whereas
the return filed in Form GSTR-3B for the relevant period ought to remain
C as it is.
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
D 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.
E
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

F 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
G
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.
H (emphasis supplied)
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 849
[A. M. KHANWILKAR, J.]

by the fact that common electronic portal had faced rough weather during A
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
B
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 C
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-
D
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 E
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
F
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 G
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 H
850 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B
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
C 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
D
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
E 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
F 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
G 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-
H 3B, much less for the relevant period (July to September 2017). Hence,
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 851
[A. M. KHANWILKAR, J.]

reliance placed on Section 39(9) of the 2017 Act to justify the stipulations A
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 B
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 C
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 D
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 E
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 F
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 G
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 H
852 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B
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
C 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
D
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
E 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
F
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
G 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
H necessary parties including that the High Court could not have issued a
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 853
[A. M. KHANWILKAR, J.]

writ of mandamus, need not detain us. As regards the jurisdiction of the A
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
B
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 C
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
D
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. E
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 F
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 G
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 H
854 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B 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
C 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
D 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
E 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
F 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
G 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
H becomes taxable in respect of which the registered person is obliged to
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 855
[A. M. KHANWILKAR, J.]

maintain agreement, invoices/challans and books of accounts, which can A
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/
B
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 C
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 D
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 E
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 F
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 G
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. H
856 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B
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
C 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).
D 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
E 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
F 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
G 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
H of the surplus or excess electronic credit ledger account), can later on
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 857
[A. M. KHANWILKAR, J.]

ask for swapping of the entries, so as to show the corresponding OTL A
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
B
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 C
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 D
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 E
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 F
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 G
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 H
858 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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-
B 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
C 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,
D 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
E 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
F 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
G 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 9 th October, 2019
12
H 2019-TIOL-1975-HC-AP-GST
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 859
[A. M. KHANWILKAR, J.]

inadvertently and by mistake reported IGST input tax credit in a column A
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
B
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 C
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
D
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 E
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 F
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 G
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 H
860 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B
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
C
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
D 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
E
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
F 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
G 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
H 2019 SCC OnLine Del 9250
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 861
[A. M. KHANWILKAR, J.]

Government of National Capital Territory of Delhi & Ors. 20 For the A
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 B
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
C
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 D
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 E
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 F
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. G
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 H
862 SUPREME COURT REPORTS [2021] 10 S.C.R.

A 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
B
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.
C 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
D 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
E 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
F 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
G 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
H unnecessary.
UNION OF INDIA v. BHARTI AIRTEL LTD. & ORS. 863
[A. M. KHANWILKAR, J.]

52. In view of the above, this appeal is allowed. The impugned A
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.
B
Ankit Gyan Appeal allowed.

C

D

E

F

G

H