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In the matter of Central Board of Indirect Taxes and Customs v. Aberdare Technologies Pvt. Ltd. , the Supreme Court of India, in a decision dated March 21, 2025 [Special Leave Petition (Civil) Diary No. 6332 of 2025, decided on 21-3-2025], affirmed the judgment of the Bombay High Court which held that an assessee must be permitted to rectify bona fide errors in its GST returns even after the expiry of the limitation period prescribed under Section 39(9) of the Central Goods and Services Tax Act, 2017, provided such errors do not result in a loss of revenue to the exchequer. The Apex Court emphasized that technical software limitations or rigid timelines should not defeat the substantive right of a taxpayer to correct inadvertent clerical mistakes, particularly when such errors lead to the double taxation of purchasers through the denial of Input Tax Credit (ITC).

Facts of the Case

The petitioner, Aberdare Technologies Pvt. Ltd., a registered entity under the GST regime, filed its returns within the prescribed timelines for the periods of July 2021, November 2021, and January 2022. It was only in December 2023 that the petitioner realized several inadvertent errors had occurred during the filing process, such as incorrectly entering the GSTIN of third-party vendors instead of the intended recipient, which effectively prevented the actual purchaser from claiming legitimate ITC. Upon discovering these omissions, the petitioner sought to rectify the Form GSTR-1 and GSTR-3B; however, the statutory deadline for such amendments—defined under Section 39(9) as the 30th day of November following the end of the relevant financial year—had already lapsed.

The GST Authorities rejected the petitioner’s request for manual or online rectification, strictly adhering to the technical bar imposed by the statute and the limitations of the digital portal. The Authority argued that the legislative mandate provided no flexibility for corrections post the November deadline, regardless of whether the error was bona fide or revenue-neutral.

High Court’s View

The Bombay High Court, following the precedent set in Star Engineers (I) Pvt. Ltd. v. Union of India [2023 SCC Online Bom 2682/2024 (81) G.S.T.L. 460 = (2023) 13 Centax 173 (Bom.)], ruled in favor of the petitioner, asserting that the provisions of Section 37 and Section 39 must be interpreted purposively. The High Court observed that while the statute prescribes a timeline, the primary objective of the GST regime is to maintain accurate data and ensure the seamless flow of credit. The court reasoned that if an error is purely technical and results in no revenue loss, denying rectification would be arbitrary and would lead to an “absurdity” where incorrect particulars become sacrosanct. It further noted that the complexity of the electronic domain and varying levels of technical expertise among taxpayers necessitate a more “assessee-friendly” approach to bona fide human errors. Consequently, the High Court directed the Respondents to open the portal or allow manual rectification to prevent the petitioner and its customers from being prejudiced by a cascading tax effect.

Supreme Court’s Ruling

The Supreme Court dismissed the Special Leave Petition filed by the Revenue, explicitly stating that the High Court’s judgment was “just and fair” given the absence of any revenue loss. The Apex Court utilized its discretion to emphasize that the right to correct mistakes of a clerical or arithmetical nature is a fundamental facet of the right to do business under the Constitution. The Court rejected the Revenue’s reliance on strict statutory timelines as a justification for denying relief in cases of proven bona fide mistakes, noting that such rigidity penalizes innocent purchasers twice: once when they pay the tax to the seller, and again when they are denied ITC due to a seller’s clerical lapse. Furthermore, the Supreme Court mandated the Central Board of Indirect Taxes and Customs (CBIC) to re-examine the provisions/timelines fixed for correcting the bonafide errors.

Conclusion

The legal principle established by these concurrent rulings confirms that the date of notification or statutory deadlines for return rectification under the CGST Act are not absolute bars in the face of bona fide, revenue-neutral errors. The judiciary has clarified that “rectification of mistake” is a right flowing from the constitutional right to conduct business, and the Revenue is duty-bound to permit amendments—even beyond the 30th of November deadline—to ensure that the GST system remains equitable and does not result in the unjust enrichment of the State through double taxation