Supreme Court Issues Notice to CBIC on Rectification of GST Errors

Last Updated on March 28, 2025 by Athi Venkatesh

The Supreme Court has taken note of the recurring issue of denying rectification of bonafide errors in GSTR-1 filings under the Central Goods and Services Tax (CGST) Act after the expiration of prescribed deadlines. The bench, comprising Chief Justice of India Sanjiv Khanna and Justices Sanjay Kumar and KV Viswanathan, was hearing the Union’s challenge against a Bombay High Court ruling that permitted rectification despite the time limit specified under Section 39(9) of the CGST Act, 2017.

The case originated when the assessee sought to amend the GSTR-1 returns for the financial year 2017-2018. However, their request was denied on the ground that the deadline for such corrections had passed. Section 39(9) mandates that any rectifications must be completed by November 30 of the following financial year. Despite this statutory restriction, the Bombay High Court allowed the assessee’s request, prompting the Union to approach the Supreme Court.

Analyzing the matter, the Supreme Court acknowledged that numerous taxpayers have faced similar issues due to minor clerical or computational mistakes. The Court emphasized that such errors are often detected only after the input tax credit is denied to the purchaser. The Central Board of Indirect Taxes and Customs (CBIC) has consistently argued that rectifications cannot be made beyond the stipulated time frame. However, the Supreme Court stressed the need to establish realistic timelines for correcting bonafide errors and issued a notice to CBIC seeking clarification on this matter.

The Court further observed that, in multiple instances, the Revenue department has accepted that the errors in question were clerical or arithmetical but still refused rectification. The burden of these mistakes ultimately falls on the seller, who is responsible for filing the online forms. Recognizing the complexities involved, the Court appointed Senior Advocate Arvind Datar as Amicus Curiae to provide guidance on the legal and procedural aspects of the case.

The case, titled Union of India & Ors. v. Brij Systems Ltd. & Ors. (Special Leave Petition (Civil) Diary No. 6334/2025), is scheduled for hearing in April. Additional Solicitor General Raghavendra P. Shankar represented the Union, while Advocate Ayush Agarwala appeared for the respondents. The outcome of this case could have significant implications for businesses struggling with technical compliance under GST regulations.