Mark Agencies Vs Department of Trade And Taxes & Anr. (Delhi High Court)
The petitioner challenged two orders passed by the Sales Tax Officer Class II/AVATO, including an order dated 20 March 2025 rejecting its rectification application filed under Section 161 of the Central Goods and Services Tax Act, 2017 (CGST Act).
The dispute originated from a Show Cause Notice dated 21 May 2024, through which a demand of ₹2,31,85,509 was raised against the petitioner on several grounds, including under-declaration of output tax, excess claim of Input Tax Credit (ITC), under-declaration of ineligible ITC, invalid ITC under Section 16(4) of the CGST Act, and ITC claimed from cancelled dealers, return defaulters, and tax non-payers. The petitioner submitted a reply to the notice; however, an order dated 25 August 2024 was passed confirming the demand.
Subsequently, the petitioner filed a rectification application on 30 October 2024 under Section 161 of the CGST Act. The application was rejected by order dated 20 March 2025. The petitioner contended that no hearing had been granted before rejection of the rectification application and that such action violated the principles of natural justice.
The respondent argued that the impugned order was appealable. However, the Court examined Section 161 of the CGST Act, particularly the third proviso, which provides that where a rectification adversely affects any person, the principles of natural justice must be followed.
