A state High Court has directed the tax department to accept revised VAT returns from a taxpayer who had discovered errors in the original filings made during the pre-GST era. The Court held that denying the opportunity to submit corrected returns, especially when done within a reasonable timeframe and with no intent to evade tax, violates the principles of natural justice. This ruling is seen as a significant relief for businesses seeking to rectify genuine mistakes made under the complex VAT framework, which often lacked clarity and digital support.

The case involved a business that had mistakenly under-reported certain sales figures and sought to submit a revised return before the assessment was finalized. However, the tax department refused to accept the revision on procedural grounds, citing the absence of specific provisions in state VAT rules for accepting such changes. The High Court overruled this rigid interpretation, stating that tax laws should be interpreted in a manner that facilitates voluntary compliance and corrective action. It emphasized that accurate tax reporting is a shared goal of both the taxpayer and the revenue department, and procedural gaps should not override substantive justice.

Legal experts have welcomed the decision, noting that it could pave the way for broader acceptance of revised VAT returns in other states, especially where technical errors or administrative lapses led to incorrect filings. The judgment reinforces the idea that tax administration must remain flexible and fair, particularly when dealing with legacy issues from the pre-GST era. It also underscores the judiciary’s role in ensuring that tax compliance processes remain accessible and just, rather than punitive or overly rigid in the face of genuine errors.