Ast Pipes Limited Vs Union of India And Another (Allahabad High Court)
Summary: The Allahabad High Court allowed Ast Pipes Limited’s writ petition challenging the rejection of its application for rectification under Section 161 of the CGST Act, 2017. The petitioner sought correction of an arithmetical mistake in Form GST DRC-07 dated 11 December 2023, involving a reduction of the tax demand by ₹3,17,414. Its rectification application was filed on 21 May 2026. At the previous hearing, the Court had recorded the petitioner’s submission that the application fell within the second proviso to Section 161 and required the Revenue to obtain written instructions. No contrary fact was subsequently pointed out. The Court held that the claim fell within the exception under which the six-month rectification limit does not apply to purely clerical or arithmetical errors arising from an accidental slip or omission.
The adjudicating authority had rejected the application on the ground that no patent, obvious and undisputed error had been established, although it recorded that the petitioner alleged a discrepancy between the operative portion of the Order-in-Original and the consequential DRC-07. The High Court found that reasoning erroneous: a discrepancy between the detailed order and its consequential summary constituted an error apparent on the face of the record. The detailed order confirmed tax of ₹3,17,414, penalty of ₹47,612 under Section 74(5), a demand of ₹3,25,972 towards wrongful availment of transitional credit, an equal penalty of ₹3,25,972 and interest of ₹57,878. In contrast, DRC-07 recorded a tax demand of ₹6,43,386. The Court further noted that the detailed order described the tax of ₹3,17,414 as adjusted against deposits of ₹3,14,745 and ₹2,992; to that extent, those amounts should not have been included in DRC-07.
The Court set aside the rectification order dated 10 September 2026 and its summary dated 11 September 2026. It remitted the matter to the adjudicating authority for a fresh order under Section 161 in accordance with its observations, stating that the exercise may be completed within one month. The operative relief was confined to setting aside the rectification rejection and directing reconsideration.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Shri Aryan Mishra, learned counsel for the petitioner, Shri Dhananjay Awasthi, learned counsel for the revenue and Shri Krishna Ji Shukla, learned counsel for the Union of India.
2. Present petition has been filed for the following relief:
” A. Issue a writ, order of direction in the nature of certiorary to set aside and quash the impugned order dated 10.09.2026 and summary thereof dated 11.09.2026, passed under Section 161 of the Central Goods and Services Tax Act, 2017.
B. Issue a writ, order, or direction in the nature of certiorary to set aside and quash the impugned Ex-parte order In-Original dated 10.11.2023 and Form GST DRC-07 dated 11.12.2023 issued by the Respondent No.2.”
3. On the last date we have made the following observation:
“1. Submission is, the petitioner had only prayed for correction of an arithmetical mistake in DRC-07 dated 11.12.2023. Thus, the petitioner sought correction of the tax demand amounting to the reduction by Rs. 3,17,414/-, only. That application was filed on 21.05.2026. It was within limitation considering the second proviso of Section 161 of the CGST Act, 2017.
2. Shri Dhananjay Awasthi, learned counsel for the revenue may obtain clear written instructions as to the applicability of second proviso of Section 161 of the aforesaid Act.
3. Put up as fresh on 08.10.2026″.
4. Today, no contrary fact has been pointed out. Second proviso of Section 161 of the CGST Act, 2017 reads as below:
“PROVIDED FURTHER that the said period of six months shall not apply in such cases where the rectification is purely in the nature of correction of a clerical or arithmetical error, arising from any accidental slip or omission.”
5. Undeniably, the claim of the petitioner falls within the scope of the second proviso of Section 161 of the CGST Act, 2017.
6. Perusal of the impugned order dated 10.09.2026 reveals that as a fact, the adjudicating authority has recorded as below:
“In this regard, I find that the applicant has not identified any specific clerical or arithmetical mistake, such as an incorrect totalling, transcription error, accidental omission of a figure or other patent mistake which can be corrected merely by reference to the undisputed record. The applicant has essentially alleged a discrepancy between the operative portion of the Order-in-Original and the consequential FORM GST DRC-07 and seeks consequential relief therefrom under sub-section 2 of Section 161 of the CGST Act, 2017.”
7. After making other consideration, it has reached a conclusion as below: “6.17 In the present case, therefore, I find that the applicant has failed to establish that there exists any patent, obvious, self-evident and undisputed error in the Order-in-Original or the consequential FORM GST DRC-07 which can be rectified under Section 161 of the CGST Act.
The applicant has also failed to establish that the alleged discrepancy is merely a clerical or arithmetical error arising from an accidental slip or omission, so as to fall within the exception contained in the second proviso to Section 161.”
8. Clearly in the facts noted by the adjudicating authority, that reasoning is erroneous. Once it has been noted that the discrepancy exists between the operative portion of the order-in-original and the consequential GST DRC- 07, such a discrepancy would clearly fall within the description of ‘error apparent on the face of record’. The phrase used under Section 161 of CGST Act itself is, ‘any error which is apparent on the face of record’. Thus in the detailed order, the adjudicating authority confirmed demand of tax Rs.317414/-, penalty Rs. 47,612/- under Section 74 (5) of CGST Act, demand Rs.3,25,972/- towards wrongful availment of transitional credit, equal amount of penalty Rs.3,25,972/- and interest Rs.57,878/-. Against that the DRC-07 narrates tax demand Rs.6,43,386/-.
9. To the extent the amount of tax Rs.317414/- confirmed by the detailed order dated 10.11.2023 is also described to have been adjusted against Rs.3,14,745/- and Rs.2,992/- deposited by the petitioner under Section 74 of the CGST Act read with Section 121 of the said Act, those amounts may never have been included in the DRC-07.
10. Accordingly, the writ petition is allowed. The order dated 10.09.2026 and summary thereof dated 11.09.2026, passed under Section 161 of the Central Goods and Services Tax Act, 2017 are set aside.
11. Matter is remitted to the adjudicating authority to pass a fresh order under Section 161 of the Act, keeping in mind the observations made above. That exercise may be completed within a month from today.
