Aries Interior Vs State Tax Officer (Madras High Court)
The petitioner challenged an order dated 26.05.2025 issued by the first respondent under Section 161 of the GST enactments. The impugned order rejected the petitioner’s rectification application dated 24.03.2025 in respect of a demand order dated 21.01.2025 for the tax period 2020–2021. The rejection was on the ground that there was no error apparent on the face of the record. The court found that the impugned order merely reproduced the statutory provision and concluded that no rectifiable error existed, without providing an opportunity of personal hearing.
The judgment refers to the third proviso to Section 161, noting that natural justice must be followed where rectification adversely affects a person. Although the proviso primarily applies to suo motu rectifications involving enhancement, the court held that this does not mean a party filing a rectification application need not be heard. Whether an error exists must be determined after affording a personal hearing.
Considering its consistent view in comparable matters, the court decided to set aside the impugned order, subject to certain conditions. The petitioner is required to deposit 25% of the disputed tax in cash from its electronic cash register within thirty days of receipt of the order. Upon compliance, the petitioner must file a consolidated reply to the Show Cause Notice (GST DRC-01 dated 04.11.2024), treating the impugned order as an addendum to that notice, along with supporting documents within the same period.
