Union Of India & Ors. Vs BRIJ Systems Ltd & Ors
Date: March 24, 2025
Subject Matter
Businesses have the fundamental right to rectify clerical or arithmetical errors in their GST filings
Summary
The Hon’ble Supreme Court ruled on the fundamental right of businesses to rectify clerical or arithmetical errors in their GST filings, asserting that such rectifications are essential to maintain fairness in the tax system. The Court emphasized that human errors are a natural occurrence and that mistakes in reporting GST by sellers should not result in the denial of Input Tax Credit (ITC) to buyers, especially when tax has been duly paid to the government. The decision encourages the rectification of errors when it causes no loss of revenue and criticizes using software limitations to block legitimate claims. The Court mandated the government to review the timelines for correcting bona fide errors, expressing that denying ITC due to mistakes would unfairly disadvantage buyers. They appointed Mr. Arvind P. Datar as an Amicus Curiae to assist in the proceedings and highlighted ongoing issues where the Revenue was refusing to allow corrections for acknowledged clerical/arithmetical mistakes after prescribed deadlines.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
Delay condoned.
We do not find any merit in the present special leave petition, as we have already dismissed SLP (C) No. 7903/2025, titled “Central Board of Indirect Taxes and Customs v. M/s Aberdare Technologies Private Limited and Ors.”.
However, it appears that on account of mistakes or errors getting noticed on the input tax credit, and the input tax credit being subsequently denied to the purchaser, the Revenue has been taking the stand that rectification is not possible after expiry of the period prescribed under Sections 37(3) and 39(9) of the Central Goods and Services Tax Act, 2017. In order to resolve the issue, we deem it appropriate to issue notice to the Central Board of Indirect Taxes and Customs.
It may be noticed that, in all these cases, it is accepted by the Revenue that there is a clerical/arithmetical mistake which is not being permitted to be corrected. Invariably, such mistakes come to the notice of the seller, who has to fill up the online form(s), etc., after the input tax credit is denied to the purchaser(s).
We appoint Mr. Arvind P. Datar, learned Senior Advocate, as an Amicus Curiae to assist this Court in the present case.
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