Under GST act various provisions has been made such as, levy and collection of tax, registration, returns, Input Tax Credit, payment of tax, refund, assessment, audits, determination of tax liability, demand and recovery, appeal etc. Accordingly, appropriate proceedings are initiated by the proper officers either on his own motion or on application of registered person, which ultimately resulted into passing and issuance of orders or decisions or certificate or notice or any other documents under relevant sections of the act and thereafter registered persons are required to take further actions. Sometime, certain errors occurred while passing or issuing of such orders or decisions or certificate or notice, which may affect tax liability. In order to correct such orders and remove errors legal remedy has been provided in section 161 of the act, for rectification of errors which are apparent on the face of record.

Provisions of section 161 of CGST Act, 2017

Without prejudice to the provisions of section 160, and notwithstanding anything contained in any other provisions of this Act, any authority, who has passed or issued any decision or order or notice or certificate or any other document, may rectify any error which is apparent on the face of record in such decision or order or notice or certificate or any other document, either on its own motion or where such error is brought to its notice by any officer appointed under this Act or an officer appointed under the State Goods and Services Tax Act or an officer appointed under the Union Territory Goods and Services Tax Act or by the affected person within a period of three months from the date of issue of such decision or order or notice or certificate or any other document, as the case may be.

Provided that no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other document:

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:

Provided also that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification.

Rectification of Error under GST

Scope of Rectification under GST

As per section 161 of the act authorities which have passed or issued any orders or decisions or notice or certificate or any other documents have powers to rectify errors which are apparent on the face of record and brought to his notice by person within three months from the date of issue of such order etc or by any officers appointed under the act. Thus, every appropriate authorities including adjudicating authorities, appellate authorities, reviewing authorities etc may rectify errors. It is important to note that scope of rectification is not confined to the orders. However, decisions, certificate, notice and any documents issued under the act also comes within ambit and scope of rectification subject to error apparent on the face of record in such decision or certificate or notice or other documents. Under existing law only orders passed and issued under the act could be rectified. Now scope of rectification has widened. This is significant change under GST act. Both parties have right to request to initiate rectification proceeding after satisfying essential condition of presence of error apparent on the face of record in such order etc.

Meaning of Error Apparent on the Face of Record under GST

No definition has been provided in the act for the term error apparent on the face of record. Error means mistake, fault, inaccuracy, incorrect belief etc. It is setted legal position that errors of law and errors of law both can be rectified.Generally, there are three types of errors such as errors of law, errors of facts and clerical, arithmetical errors. Errors which are patent, obvious, visible and evident from the face of record can be said as errors apparent on the face of record and could be covered under section 161 of the act. Errors which involved debatable, arguable points, involving interpretation, long and elaborate arguments and required additional evidences can not covered scope of apparent errors. Failure to consider documents submitted by person while passing order or decision is error of fact and apparent on the face of record. Similarly, failure to consider provision of law is error of law and amount to error apparent on the face of record.

In the case of M/s Deva Metal powder vs Commissioner of Trade Tax UP decided on 04-12-2007 Supreme Court had an occasion to deal with rectification provision under existing law. Observation and guidelines of Apex court, regarding mistake apparent on the face of record may be applicable under CGST act for deciding whether error is apparent on the face of record or not. Relevant paras are reproduced hereunder.

9. An error apparent on the face of the record for acquiring jurisdiction to effect rectification must be such an error which may strike one on a mere looking at the record and would not require any long drawn process of reasoning. The following observations in connection with an error apparent on the face of the record in the case of Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tiruymale [ AIR 1960 SC 137] need to be noted:

“An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Where an alleged error is far from self-evident and if it can be established, it has to be established, by lengthy and complicated arguments, such an error cannot be cured by a writ of certiorari according to the rule governing the powers of the superior Court to issue such a writ.”

10. A bare look at Section 22 of the Act makes it clear that a mistake apparent from the record is rectifiable. In order to attract the application of Section 22, the mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. “Mistake” means to take or understand wrongly or inaccurately; to make an error in interpreting; it is an error, a fault, a misunderstanding, a misconception. “Apparent” means visible; capable of being seen, obvious; plain. It means “open to view, visible, evident, appears, appearing as real and true, conspicuous, manifest, obvious, seeming.” A mistake which can be rectified under Section 22 is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. In our view rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order. What the Revenue intends to do in the present case is precisely the substitution of the order which according to us is not permissible under the provisions of Section 22 and, therefore, the High Court was not justified in holding that there was mistake apparent on the face of the record. In order to bring an application under Section 22, the mistake must be “apparent” from the record. Section 22 does not enable an order to be reversed by revision or by review, but permits only some error which is apparent on the face of the record to be corrected. Where an error is far from self-evident, it ceases to be an apparent error. It is, no doubt, true that a mistake capable of being rectified under Section 22 is not confined to clerical or arithmetical mistake. On the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by this Court in Master Construction Co. (P) Ltd. v. State of Orissa [1966] 17 STC 360, an error which is apparent from record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law.

11. “Mistake” is an ordinary word but in taxation laws, it has a special significance. It is not an arithmetical error which, after a judicious probe into the record from which it is supposed to emanate is discerned. The word “mistake” is inherently indefinite in scope, as to what may be a mistake for one may not be one for another. It is mostly subjective and the dividing line in border areas is thin and indiscernible. It is something which a duly and judiciously instructed mind can find out from the record. In order to attract the power to rectify under Section 22, it is not sufficient if there is merely a mistake in the order sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on a debatable point of law or a disputed question of fact is not a mistake apparent from the record. The plain meaning of the word “apparent” is that it must be something which appears to be so ex facie and it is incapable of argument or debate. It, therefore, follows that a decision on a debatable point of law or fact or failure to apply the law to a set of facts which remains to be investigated cannot be corrected by way of rectifications.

Time Limit to File Application for Rectification under GST

Taxable person and Officers appointed under the act both parties may request to the authority for initiation of rectification proceeding. Taxable person is required to file application for rectification within three month from the date of issue of such order or decision or notice or certificate. However, no such time limit has been prescribed to Officers for sending report to concerned authority, for initiation of rectification proceeding, on the ground of error apparent on the face of record. Similarly, no such time limit is also applicable to the authority for initiation of proceeding on his own motion. Therefore, if error is apparent on the face of record and person desire to rectify it, then it is necessary to file an application within three month from date of issue of such order etc. This time limit can not be extended nor delay be condoned on any ground.

Time Limit to Pass Rectification Order under GST

It is provided in section that rectification order should be passed within six months from the date of such order or decision or notice or certificate or any other documents. However, said time limit of six months is not applicable where rectification is purely in the nature of correction of clerical or arithmetical error, arising from any accidental slip or omission. It is seen that in such case authority may issue notice and rectify error on his own motion on or on the basis of report of any officer appointed under the act within two years.

Opportunity of Hearing

If authority is of opinion that there is error in the order, or decision or notice or certificate or other documents and rectification of same may adversely affect any person, then said authority should follow principle of natural justice and should give opportunity of hearing on the proposed errors to such person. In such if no opportunity of hearing given then order may not be sustainable in the appeal. However, if rectification of error does not adversely affect the person then no need to give opportunity of hearing before passing such order under section 161.

Conclusion

Scope of rectification under this section has widened by including decisions, notice, certificate and other documents issued under the GST act. Rectification of error u/s 161 of the act is alternate legal remedy available to the aggrieved taxable person to correct order or decision etc apart from an appeal u/s 107 of the act. Generally, in respect of errors other apparent on the face of record involved in the order, aggrieved person may file appeal against said order and raise all grounds in appeal. However, where errors in the order which are apparent on the face of record, then aggrieved person may apply for rectification if he desire. Where, an application is rejected on the ground that error is not apparent on the face of record or If he is not satisfied with the rectification order of the authority, then an appeal can be filed against such order to the appellate authorities. Thus, this is an additional alternate remedy to the aggrieved person. Similarly it is an additional corrective action, in addition to review and appeal, available to the authorities to remove error and correct the order.

M M Kanadje Ex. Joint Commissioner of State Tax

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2 Comments

  1. Prakash Kochar says:

    Refusal of rectification is received on the ground that mistake is not covered under rectification, but is debatable point of law, in such cases whether appeal is tenable for grievance of main issue?

    1. motiram kanadje says:

      facts are incomplete. Prima facie it appears in such situation better to file appeal against original order if time limit permit . Decision to refuse rectification is also appelable .

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