GST Order Lacked Reasons: Orissa HC Directs Reconsideration of Rectification Application

Orissa Stevedores Ltd. Vs Deputy Commissioner of CT and GST (Orissa High Court)

In the case of Orissa Stevedores Ltd. vs Deputy Commissioner of CT and GST, the Orissa High Court addressed the rejection of a rectification application filed under Section 161 of the Odisha Goods and Services Tax (OGST) Act, 2017. The petitioner, Orissa Stevedores Ltd., sought rectification of an order dated December 30, 2023, issued under Section 73 of the GST Act, which was dismissed on April 8, 2024, without a hearing. The petitioner argued that under Section 161, they are entitled to apply for rectification within the prescribed time, and a hearing should have been granted as the order adversely affected them. The revenue authorities contended that a hearing is only necessary if the rectification would adversely impact the assessee, such as in cases of enhancement. The High Court did not decide whether a hearing was required but emphasized that the impugned order lacked reasons for the rejection of the rectification application. Consequently, the Court set aside the order and directed the authority to reconsider the rectification application in accordance with the law, ensuring that the process follows statutory requirements.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

Mr. Sahoo, learned senior advocate appears on behalf of petitioner and submits, his client had applied for rectification of order dated 30^th December, 2023 made under section 73 of Goods and Services Tax Act, 2017. He submits, his client can so apply under section 161 in Odisha Goods and Services Tax Act, 2017. The application was rejected by order dated 8^th April, 2024. His client was not given opportunity of hearing. He seeks interference.

2. Mishra, learned advocate, Standing Counsel appears on behalf of revenue and submits, there is no mandate to give hearing on an application for rectification of error apparent on face of the record. Impugned order cannot be said to be adverse to petitioner therefore, there was no question of giving hearing. All that was said is, there was no apparent error and petitioner told that if dissatisfied with the assessment, it may prefer appeal.

3. On query from Court Mr. Sahoo submits, his client’s application is at pages 107 to 117. On perusing impugned order and attached thereto reason we are unable to see what rectification was sought, as considered to find no error in said order dated 30^th December, 2023. We reproduce below impugned order and the reason given.

“With reference to the application referred to above regarding rectification of order (details of which is mentioned in table below), the said application has not been found satisfactory for the reasons attached in annexure.

On thorough verification of documents submitted by you along with your rectification petition, it is found that there is no error which apparent on the face of record, which needs to be rectified U/s.-161 of OGST Act-2017. Hence, your petition filed in this regard is hereby rejected.”

4. We are not inclined to take a view on whether petitioner was entitled to hearing in support of its rectification application. However, section 161 does allow the assessee to apply for rectification within time prescribed. It appears such application was made. Impugned order does not disclose any reason for rejection thereof.

5. Sahoo submits, his client is affected by said order dated 30^th December, 2023. Hence, it applied for rectification. In that view of the matter third proviso requires notice of hearing to be given to his client. Mr. Mishra responds, only if the rectification adversely affects the assessee, is he entitled to hearing. That means, if there is enhancement by the rectification then the assessee is to be heard.

6. Section 161 clearly provides for, inter alia, affected person to apply for rectification. The third proviso says, where the rectification adversely affects any person, he is to be given hearing. The authority in already having passed impugned order, hereby set aside, had decided no rectification was necessary. That was continuation of the assessee feeling it stood affected by order dated 30^th December, 2023. Appeal against the assessment order would be on merits. That is why the statute provides for rectification.

7. The authority will deal with the rectification application on restoration in accordance with law.

8. The writ petition is disposed of.