Whether Form GSTR-3B is a return or not under the CGST Law

The Supreme Court of India has reversed a Gujarat High Court ruling regarding Form GSTR-3B. While the High Court had stated that GSTR-3B was not a formal return under Section 39 of the CGST Act, the Supreme Court's decision in Union of India & Ors. v. Aap and Company appears to contradict this. However, the article notes that the Supreme Court's reasoning in a related case, Union of India v. Bharti Airtel Ltd. & Ors., which disallowed rectification of GSTR-3B, was obiter dictum and not the core issue. This raises questions about the Supreme Court's reliance on the Bharti Airtel case to overturn the Gujarat High Court's judgment.

The Hon'ble Supreme Court of India in Union of India & Ors. v. Aap and Company [Civil Appeal No(s). 5978/2021 dated December 10, 2021] reversed the judgment of the Hon'ble Gujarat High Court, ruling that FORM GSTR-3B is not a return under Section 39 of the Central Goods and Services Tax Act, 2017 ("the CGST Act").

Noted that, the Hon'ble Gujarat High Court in AAP and Co. v. Union of India [R/Special Civil Application No. 18962 of 2018 dated 24.06.2019] had held that, Form GSTR-3B is not a return under Section 39 of the CGST Act and it is only a temporary stop gap arrangement till due date of filing the return in Form GSTR-3 is notified.

Stated that, the judgment in AAP and Co. (ibid) has been expressly overruled by a three-Judge Bench by the decision of the Hon'ble Supreme Court of India in Union of India v. Bharti Airtel Ltd. & Ors., [Civil Appeal No.6520 of 2021 dated October 28, 2021]

Held that, the appeal succeeds on the same terms as in Bharti Airtel Ltd. & Ors. (ibid).

Our Comments

The issue before the Hon'ble Supreme Court of India in Bharti Airtel Ltd. & Ors. (ibid) was whether Form GSTR- 3B can be allowed to be rectified or not. Hon'ble Supreme Court of India disallowed the assessee to unilaterally carry out rectification of his returns submitted electronically in Form GSTR­-3B, which inevitably would affect the obligations and liabilities of other stakeholders, because of the cascading effect in their electronic records.

Thus, the issue in the Bharti Airtel Ltd. & Ors. (ibid) was entirely different from the AAP and Co. (supra) and constitutionality of amendment in Rule 61(5) of the Central Goods and Services Tax Rules, 2017 ("the CGST Rules") vide Notification No. 49/2019 – Central Tax dated October 09, 2019 w.e.f. July 01, 2017 was not challenged in Bharti Airtel Ltd. & Ors. (supra).

Thus, observations made in the Bharti Airtel Ltd. & Ors. (ibid) w.r.t Form GSTR-3B being a return or not is not the ratio decidendi but obiter dictum thus, the question arises whether the Hon'ble Supreme Court of India in AAP and Co. (supra) can rely entirely on Bharti Airtel Ltd. & Ors. (supra) to reverse the judgment given by the Hon'ble Gujarat High Court in AAP and Co. (supra)?