Author: Ashwarya Sharma, Advocate & Co-Founder, RB LawCorp
Date: 31/12/2025
When Technology Oversteps the Law: A Constitutional Review of GSTN’s Expanding Authority
This article critically examines the GSTN advisory dated 29 December 2025, which proposes blocking the filing of GSTR-3B where Input Tax Credit (ITC) reclaimed or availed does not match balances reflected in newly introduced portal-generated electronic statements. While presented as a compliance-facilitating measure, the advisory raises serious constitutional and statutory concerns.
Core Legal Issue
The author argues that GSTN has crossed its role as a facilitative technology platform and has begun operating as a de facto law-making authority, imposing restrictions not authorised by Parliament, the CGST Act, or the CGST Rules.
Statutory Framework on ITC
- Section 16 of the CGST Act governs conditions only for the initial availment of ITC.
- There is no statutory restriction on re-availment of ITC once eligibility conditions are met.
- Re-availment commonly occurs due to commercial realities such as timing mismatches, supplier compliance issues, or temporary reversals—none of which attract fresh conditions under law.
Return Filing Mechanism
- Section 39 and Rule 61 recognise GSTR-3B as the sole return for availing, reversing, and re-availing ITC.
- Rules 37 and 37A allow reversal and re-availment but do not mandate any additional electronic statements.
- The GSTN-created Electronic Credit Reversal and Re-claimed Statement has no statutory backing.
Legislative Intent on Blocking Returns
- Parliament has expressly restricted filing of returns only in limited situations (e.g., Section 39(10), Section 39(11), Rule 59(6)).
- There is no provision permitting blocking of GSTR-3B due to ITC mismatches or portal-generated statements.
- Any additional restriction imposed by GSTN is therefore ultra vires.
Constitutional Violation – Article 265
- Article 265 mandates that no tax can be levied or collected except by authority of law.
- By blocking returns and indirectly compelling ITC reversals or tax payments, GSTN’s advisory results in unauthorised tax collection.
- Supreme Court precedents confirm that executive or technological mechanisms cannot impose fiscal burdens without legislative sanction.
GSTN’s Legal Status
- GSTN is a Section 8 company, not a legislature, executive authority, or statutory regulator.
- It has no delegated power to prescribe tax conditions, restrict returns, or enforce fiscal consequences.
- The advisory amounts to “legislation by software”, which is constitutionally impermissible.
Broader Constitutional Impact
- The advisory bypasses Parliament, the Executive, and even the GST Council, which alone is constitutionally empowered to recommend GST-related changes.
- Allowing such portal-driven mandates risks erosion of parliamentary supremacy, rule of law, and cooperative federalism.
Conclusion
The article concludes that while technology may facilitate compliance, it cannot dictate tax law. Any system where software compels tax payment or restricts statutory rights without legal authority represents a dangerous shift from the rule of law to the rule of code, a transformation wholly incompatible with India’s constitutional framework.
📎 Attached PDF for detailed reading
👉 Full PDF Article Link (as published):https://vilgst.com/showiframe?V1Zaa1VsQlJQVDA9=TVRjNE1nPT0=&page=articles
(The author is a practicing advocate, Co-Founder and Legal Head of RB LawCorp.
He specializes in GST law. Suggestions or queries can be directed to
ashsharma@rblawcorp.in. The views expressed in this article are strictly
personal.)
