Rectification Of Errors In Returns: CBIC v. Aberdare Technologies

Brief Facts:  

Aberdare Technologies (P.) Ltd. (“Assessee”) is a registered person under the Central Goods and Services Tax Act, 2017 (“CGST Act”). For the tax periods July 2021, November 2021, and January 2022, the Assessee duly furnished its GST returns, including Form GSTR-1 and Form GSTR-3B, within the prescribed timelines. In December 2023, the Assessee discovered certain errors and incorrect particulars in the returns already filed for financial year 2021-22.     

Section 39(9) of the CGST Act permits rectification of omissions or incorrect particulars only up to 30 November following the end of the relevant financial year, or the date of furnishing of the annual return, whichever is earlier. As the statutory cut-off date had elapsed, the Assessee submitted written representations to the jurisdictional GST authorities seeking permission to rectify the errors, either electronically or manually. The authorities rejected the request solely on the ground that the time limit prescribed under Section 39(9) had expired, notwithstanding the absence of any allegation of revenue loss or mala fide conduct. Aggrieved, the Assessee filed a writ petition before the Bombay High Court, challenging the refusal to permit rectification.  

Issue for Consideration: 

Whether rectification of GST returns can be denied solely on the ground that the statutory time limit prescribed under Section 39(9) of the CGST Act has expired, even where the errors are bona fide, inadvertent, and cause no loss of revenue to the tax authorities.  

Decision of the Bombay HC: 

The Bombay High Court allowed the writ petition and directed the tax authorities to permit the Assessee to amend and rectify its GST returns. The Court undertook a detailed examination of Sections 37, 38, and 39 of the CGST Act, which collectively govern the furnishing of outward supply details, inward supply details, and returns. The Court held that these provisions must be read harmoniously and purposively, rather than in a strictly literal or mechanical manner. The High Court observed that the GST regime is a technology-driven compliance framework and that inadvertent human errors are inevitable. Treating such errors as irrevocable merely because a procedural deadline has elapsed would result in incorrect data being perpetuated within the GST system, leading to cascading adverse consequences.  

The Court placed reliance on its earlier decision in Star Engineers (I) Pvt. Ltd. v. Union of India ¹ and noted that where there is no loss of revenue, denial of rectification on purely technical grounds defeats the object of the statute. The proviso to Section 39(9), according to the Court, cannot be interpreted so as to nullify the substantive right to correct bona fide errors. Accordingly, the respondents were directed to open the GST portal to enable rectification, failing which, the Assessee was permitted to carry out rectification through manual filing, subject to procedural safeguards, including prior notice and an opportunity of hearing.  

Appeal before the Supreme Court of India: 

The Revenue challenged the Bombay High Court’s decision by filing a Special Leave Petition before the Supreme Court of India. The Supreme Court dismissed the Special Leave Petition and affirmed the reasoning of the High Court. The Apex Court observed that human errors and clerical or arithmetical mistakes are a normal incident of compliance, and such errors are not confined to assessees alone. The Court held that the right to correct bona fide clerical or arithmetical errors flows from the right to carry on business and cannot be denied unless there exists a clear and reasonable justification.  

The Supreme Court further held that limitations on software or portals cannot constitute a valid basis for denying rectification, as technology is intended to facilitate compliance, not obstruct it. The Court expressly declined to interfere with the impugned judgment and dismissed the SLP.  

Our Thoughts: 

This decision adopts a practical and taxpayer-friendly approach by recognising that the GST system should prioritise accuracy and fairness over rigid procedural formalism. By allowing the rectification of genuine clerical or arithmetical errors even beyond statutory timelines where no revenue loss is caused, the Court acknowledges the realities of a technology-driven compliance regime that is still evolving. The judgment rightly rejects the use of portal limitations as a blanket justification to deny correction of bona fide mistakes and affirms that compliance mechanisms must facilitate, rather than frustrate, lawful business activity. From a broader perspective, the ruling strikes a fair balance between administrative discipline and commercial reality and sends a clear message that procedural rules under GST cannot be enforced in a manner that undermines substantive rights and accurate tax reporting. 

The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident, or any other cause. 

1. Star Engineers (I) (P.) Ltd. v. Union of India [2023] 157 taxmann.com 285 ↩︎