Case Law Details
Tvl. Monikandan Vs Deputy State Tax Officer (Madras High Court)
The Madras High Court recently intervened in the case of Tvl. Monikandan versus the Deputy State Tax Officer, setting aside an assessment order and a subsequent order rejecting a rectification application. The court’s decision, delivered on June 25, 2025, emphasized a violation of natural justice principles.
Monikandan challenged an assessment order dated January 24, 2025, concerning the tax period of April 2020 to March 2021, and an order dated June 5, 2025, which rejected an application for rectification under Section 161 of the TNGST Act, 2017.
According to the petitioner, a show cause notice (DRC 01) issued on November 26, 2024, assessed a sum of Rs. 14,88,446/- with interest. Monikandan claimed to have paid Rs. 14,71,418/- even before replying to the notice. However, the respondent confirmed a demand of Rs. 6,82,488/- without accounting for the prior payment.
The subsequent rectification application was rejected on the grounds that the error was not “apparent on the face of the record,” as defined under Section 161 of the TNGST Act. The rejection order stated that the provision for rectification is limited to clerical, arithmetical, or typographical errors, and the issue raised required “substantive examination.”
The High Court, after reviewing the submissions, found a clear violation of natural justice. Consequently, the court set aside the rectification rejection order dated June 5, 2025. The matter has been remitted back to the Deputy State Tax Officer, with a directive to issue a fresh order under Section 161 of the TNGST Act expeditiously, after providing Monikandan an opportunity for a hearing. The writ petition was allowed, and no costs were awarded
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner herein is aggrieved by the impugned assessment order dated 24.01.2025 and the order dated 05.06.2025 rejecting the application filed under Section 161 of the TNGST Act, 2017 for rectification of the assessment order dated 24.01.2025 passed for the tax period between April 2020 and March 2021.
2. Mr. R.Sureshkumar, learned Additional Government Pleader, takes notice for the respondent. By consent of both parties, this writ petition is taken up for final disposal at the admission stage itself.
3. It is the specific case of the petitioner that the petitioner was issued a show cause notice in DRC 01 dated 26.11.2024, wherein a sum of Rs.14,88,446/- was assessed together with interest. It is the further case of the petitioner that even before the reply to the show cause notice, the petitioner had paid a sum of Rs.14,71,418/-. It is further submitted that without considering the same, the respondent had confirmed the demand of Rs.6,82,488/- vide order dated 24.01.2025. Therefore, the petitioner filed an application for rectification under Section 161 of the TNGST Act, 2017, which has been rejected, stating that there is no error apparent on the face of the record through the second mentioned impugned order dated 05.06.2025. The relevant portion of the second mentioned impugned order dated 05.06.2025 reads as follows:
“This is with reference to your application, requesting rectification under Section 161 of CGST/SGST Act. Upon review, it has been observed that the error mentioned in your application does not fall within the scope of “errors apparent on the face of the record,” as outlined under the Act.
The provision for rectification is strictly limited to clerical, arithmetical, typographical errors, or other mistakes that are self-evident and do not require further investigation or detailed scrutiny. Since the issue raised in your application requires substantive examination beyond the scope of apparent errors, we regret to inform you that your request for rectification cannot be entertained.
In view of the above the application filed by the taxpayer under Section 161 of TNGST Act, 2017, is hereby rejected.”
4. Having considered the submissions made by the learned counsel for the petitioner and the learned Additional Government Pleader for the respondent, and having perused the orders above-mentioned, this court finds that there is a violation of principles of natural justice. Considering the same, the second mentioned impugned order dated 05.06.2025 is set aside, and it is remitted back to the respondent to pass a fresh order under Section 161 of the TNGST Act, 2017. The respondent is directed to pass a fresh order as expeditiously as possible, after affording an opportunity of hearing to the petitioner.
5. With the above directions, this writ petition stands allowed. No costs. Consequently, connected miscellaneous petition is closed.
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