Supreme Court sets aside Delhi High Court order allowing ₹923 crore GST refund to Bharti Airtel

The Supreme Court on Thursday allowed an appeal by the Central government against a Delhi High Court judgment which had allowed a Goods and Services Tax (GST) refund of ₹923 crore to telecom operator Bharti Airtel (Union of India v. Bharti Airtel)..Bharti Airtel had sought a GST refund for the period between July and September 2017, arguing that it had paid excess tax of ₹923 crore, as the GSTR-2A form was non-operational during the time.In May 2020, a two-judge bench of the Delhi High Court allowed Bharti Airtel to seek the GST refund and also directed the government to verify the excess GST claim..The case pertains to under-reporting of input tax credit in the GST summary return form, GSTR 3B, during those three months in 2017, due to absence of the purchase-related return form during the transition period. The operator argued that in the absence of the statutory forms GSTR 2 and 3, the summary return form was introduced. It did not allow validation before uploading. In the absence of such validation, chances of incorrect details being uploaded could not be eliminated..The Central government had challenged the High Court order in July last year. The Bench of Justices AM Khanwilkar and Dinesh Maheshwari ruled today that Bharti Airtel had indeed under-reported input tax credit for the period between July 2017 and September 2017..The Bench agreed with the Central government that any indulgence shown contrary to the statutory mandate would not only be an illegality, but in reality, "would simply lead to chaotic situation and collapse of tax administration of Union, States and Union Territories.""Resultantly, assessee cannot be permitted to unilaterally carry out rectification of his returns submitted electronically in Form GSTR3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records," the judgment stated..Further, the top court noted that the direction issued by the High Court allowing Bharti Airtel to rectify Form GSTR-3B for the period between July and September 2017 was in the teeth of express statutory dispensation and thus could not be sustained..[Read Judgment]