GSTR-1 Error Rectification Allowed, SCN Set Aside | HC

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GSTR-1 Rectification SCN Quashed

Case Details: Hindustan Construction Company Ltd. vs. Union of India [2025] 181 taxmann.com 700 (Karnataka)

Judiciary and Counsel Details

  • S.R.Krishna Kumar, J.
  • Bharat B. Raichandani, Adv. for the Petitioner.
  • Prathibha, CGC and K. Hema Kumar, AGA for the Respondent.

Facts of the Case

The petitioner challenged a show cause notice (SCN) issued under Section 73 of the CGST Act. It was submitted that B2C supplies were inadvertently reported as B2B in GSTR-1. It was contended that the error had been identified and rectified, and that there was no loss of revenue as a result of the correction. The issuance of the SCN solely on the premise that such rectifications were impermissible was unjustified. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the mistakes were bona fide and inadvertent, and corrections made in GSTR-1 did not result in any loss to the revenue. The Court observed that the right to correct clerical or arithmetical mistakes flows from the right to conduct business, and that limitations in the GST software cannot curtail that right. Since the sole basis of the SCN was the impermissibility of rectifying such returns, the initiation of proceedings was unjustified. Consequently, the SCN and any subsequent proceedings were quashed, and it was directed to accept the corrected returns.

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied