GST ITC & Supplier Errors-Recent Supreme Court Rulings
                     GST ITC & Supplier Errors: Recent Supreme Court Rulings
Recent Supreme Court rulings address the denial of Input Tax Credit (ITC) due to supplier errors in GST returns. 
In Union of India v. Brij Systems Ltd., the court questioned the revenue’s stance of denying ITC based solely 
on the expiry of rectification periods under the CGST Act for clerical errors. The court noted a similar SLP 
was already dismissed. In CBIC v. Aberdare Technologies Pvt. Ltd., the Supreme Court affirmed that 
taxpayers should be allowed to rectify genuine errors to avoid ITC denial, emphasizing that the right to 
correct clerical or arithmetical mistakes is inherent to the right to do business. The court dismissed CBIC’s 
SLP, directing them to re-examine timelines for error correction, highlighting that buyers shouldn’t suffer 
for supplier mistakes and software limitations shouldn’t be a justification for denying corrections. Denial of 
ITC due to Supplier’s mistake In Union of India & Ors. v. Brij Systems Ltd.& Ors. (2025) 3 TMI 1395; (2025) 
172 taxmann.com 722 (Supreme Court) Order dated 24.03.2025, Supreme Court of India has came down 
heavily on Union of India and CBIC on tax related errors in filing of returns and denial of input tax credit.
In the instant case, an SLP was filed by revenue authorities against Bombay High Court judgment in Brij 
Systems Ltd & Ors. v. Union of India (2025) 172 taxmann.com 721; (2024) 7 TMI 1611 (Bombay) by 
which it was held that input tax credit could not be denied on account of mistakes or errors or mis-
matches in furnishing of returns due to which input tax credit was subsequently denied to the 
purchaser. Merely on the ground that rectification after the stipulated period is not possible under 
section 37(3) and 39(9) of the CGST Act, 2017. It has inter alia, observed and held that:
On account of mistakes or errors getting noticed on the input tax credit, and the input tax credit 
being subsequently denied to the purchaser, the Revenue has been taking the stand that 
rectification is not possible after expiry of the period prescribed under Section 37(3) and 39(9) of the 
Central Goods and Services Tax Act, 2017. In all these cases, it is accepted by the revenue that there 
is a clerical / arithmetical mistake which is not being permitted to be corrected. Invariably, such 
mistakes comes to the notice of the seller, who has to fill up the online form(s), etc., after the input 
tax credit is denied to the purchaser(s). The apex court observed that in one of the similar SLP’s. The 
Court observed that in one of the similar SLPs, court has already dismissed SLP (C) No. 7903/2025 in 
the case of CBIC v. Aberdare Technologies Pvt. Ltd. & Others. Apex Court did not find merit in the 
present SLP and issued notice to the CBIC. The matter was listed for 28.04.2025.
Taxpayer to be allowed to correct bonafide errors In Central Board of Indirect Taxes and Customs v. Aberdare 
Technologies Pvt. Ltd. & Others (2025) 4 TMI 101; (2025) 172 taxmann.com 724 (Supreme Court) Order 
dated 21.03.2025, Supreme Court of India has held that taxpayer should be allowed to rectify bonafide 
errors to avoid denial of input tax credit. The Supreme Court of India has directed the revenue authorities 
to allow taxpayers to rectify bonafide errors in the GST returns leading to allowance of input tax credit. The 
right to correct mistakes which are in the nature of clerical or arithmetical error is a right that flows from 
the right to do business and should not be denied. In the instant case, the present SLP was filed by CBIC 
against Bombay High Court judgment in Aberdare Technologies Pvt. Ltd. & Others. v. CBIC and Ors. (2024) 
8 TMI 142; (2024) 89 GSTL 6; (2024) 165 taxmann.com 325 (Bombay), wherein the respondents were 
directed to open the portal within one week from the date of this order being uploaded and inform 
petitioner to enable them to amend / rectify Form GSTR-1 and GSTR-3B within one week. The High Court 
relied upon Star Engineers (I) Pvt Ltd. v. Union of India & Ors. [(2023) 12 TMI 729 Bombay High Court] 
where it was held that ‘the State Tax officer ought to have granted the petitioner’s request to rectify / 
amend the Form GSTR-1 for the period July 2021, November 2021 and January 2022, either through 
Online or manual means.’
The Apex Court observed that the matter involves the contentious issue of input tax credit denied due to 
clerical or technical errors in GST filings. Under the Central Goods and Services Tax (CGST) Act, 2017 buyers 
claim ITC based on tax invoices issued by suppliers, which must be reflected correctly in the GST returns. 
However, instances where suppliers inadvertently fail to file correct returns or make clerical errors have led 
to the denial of ITC claims to buyers, resulting in financial and compliances burdens. Further, the right to 
correct mistakes in the nature of clerical or arithmetical error is a right that flows from right to do business 
and should not be denied unless there is a good justification and reason to deny benefit of correction. 
Further, software limitation itself cannot be a good justification, as software is meant to ease compliance 
and could be configured. Therefore, we exercise our discretion and dismiss the special leave petition, the 
bench said while asking the CBIC to re-examine the provisions / timelines fixed for correcting bonafide 
errors. Timelines should be realistic as lapse / defect invariably is realized when input tax credit is denied 
to the purchaser when benefit of tax paid is denied. Purchaser is not at fault, having paid the tax amount. 
He suffers because he is denied benefit of tax paid by him. Consequently, he has to make double payment.
It inter alia, observed / held that: Sections 37(3) and 39(9) of the CGST Act, 2017 limit error corrections, leading 
to litigation and compliance burdens of businesses. CBIC must re-examine the provisions / timelines fixed 
for correcting the bonafide errors. Time lines should be realist as lapse / defect invariably is realized when 
input tax credit is denied to the purchaser when benefit of tax paid is denied. Purchaser is not at fault, 
having paid the tax amount. He suffers because he is denied benefit of tax paid by him. Consequently, he 
has to make double payment. Human errors and mistakes are normal, and errors are also made by the 
Revenue. Right to correct mistakes in the nature of clerical or arithmetical error is a right that flows from 
right to do business and should not be denied unless there is a good justification and reason to deny 
benefit of correction. Software limitation itself cannot be a good justification, as software are meant ease 
compliance and can be configured.
The Apex Court did not find merit in SLP and dismissed it because the impugned Bombay High Court 
judgment was just and fair, as there was no loss to the revenue.
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