Rectification of errors under GST

To err is human and GST authorities are no exception. The adjudicating authority, while passing or issuing any decision or order or notice or certificate or any other document, it is expected to be free from errors. But errors may creep in inadvertently or unintentionally. It is the duty of the adjudicating authority, who has passed or issued any decision or order or notice or certificate or any other document, to rectify such unintended errors. According to the general principle of law, once the judgement/order etc. is passed the concerned authority becomes functus officio. But Section 161 of the CGST ACT’ 2017 provides an opportunity to correct the errors that do not convey the judicious decision of the authority.

Analysis

For ready reference section 161of the CGST ACT’17 is reproduced below

The section starts with prudence

i. “Without prejudice to the provisions of section 160” i.e. without affecting or causing harm to, or damaging, the provision of section 160 of the Act. It seeks to protect section 160 of the Act which in some way may be on the same subject.

ii. “Notwithstanding anything contained in any other provisions of this Act” i.e. an overruling provision that smoothens the actual operation of this section. This Non-obstante clause seeks to give this provision an overriding effect against any contrary provisions that may be found in the statute.

The power has been given to the same authority who has passed or issued any decision or order or notice or certificate or any other document.

This section will come into operation when it is brought to the notice of the concerned authority

i. 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

ii. By The aggrieved person ; or

iii. on its own motion of the same authority who has passed the order or decision etc.

The time limit is three months from the date of issue of such decision or order or notice or certificate or any other document for the aggrieved person, while this time restriction is six month for the SGST/UTGST Authorities to make the adjudicating officer informed or for the suo-motu rectification by the same authority. However, there is no time restriction in cases where the rectification is purely in the nature of correction of a clerical or arithmetical error, arising from any accidental slip or omission.

The proper authority is permitted to take action under this section when there is error or mistake apparent on the face of the records.

The adjudicating authority must follow the principle of natural justice when such rectification will affect any person adversely.

Further analysis

Generally any authority cannot assume any jurisdiction until and unless certain facts exist. The existence of fact which is sine qua non or condition precedent to the assumption of the jurisdiction, by the adjudicating authority is the ‘error apparent on the face of the record’ in such decision or order etc. There is a difference between ‘error’ and ‘error apparent on the face of the record’.

Error means mistake, fault, inaccuracy, aberration, incorrect belief etc. It may be defined as a true is false. It may also be defined as a ‘mistake of law or of fact in one’s judgement, opinion or order. But what is ‘error apparent on the face of the record’ cannot be described precisely or exhaustively. In simple language, it means a plain and fundamental error that goes to the foundation of the action irrespective of the evidence; an obvious misapprehension of the applicable law.

When does an error cease to be a mere error and become an error apparent on the face of the record? Precise, perfect and exhaustive parameters are not possible. Essentially the error is so patent that a bare perusal of the judgement/order/decision and the record would show that there was an error. It may be stated that if an authority takes into account irrelevant considerations or inadmissible evidence or refuse to admit admissible evidence or if the finding of the fact is based on no evidence, it can be said that there is such an error. In short the impugned conclusion by the authority is so plainly inconsistence with the relevant statutory provision that there will be no difficulty in holding that the said error of law is apparent on the face of the record. No error can be said to be apparent on the face of the record if it is not self-evident, and if it requires an examination or argument to establish it. But there may be cases where this test may break down. What is self-evident to one person may not be so to another person. “There is an element of indefiniteness inherent in its very nature and it must be left to be determined judicially on the fact of each case.” [ Maula Bux vs State of Vindhya Pradesh AIR 1956 Vin Pra 1]. But if on a question two views are possible and the authority adopts one, there is no ‘error apparent on the face of the record’. Thus in Ujjam Bai v. State of U.P. [AIR 1962 SC 1621:1963) I SCR 778], the question was one of interpretation of a notification. By wrongly interpreting the said notification, tax was imposed, which was challenged by the petitioner. The Hon’ble Supreme Court refused to interfere under Article 32 and observed:

Where a quasi-judicial authority has jurisdiction to decide matter, it does not lose its jurisdiction by coming to a wrong conclusion, whether it is wrong in law or in fact.

Error apparent on the face of the record, if proved justifies a review of the order/decision, because this error leads to ‘error of judgement’ by the concerned authority.

While exercise this jurisdiction, no subsequent event should be taken into consideration by the concerned authority.

The concerned authority is not competent to re appreciate the evidence already in record. But the authority is empowered to interfere if there has been a non-appreciation or non-consideration of the evidence on record.

Apart from clerical or arithmetical error, there may be

i. error of law – occurs when the authority errs in applying the law to the case

ii. error of fact – occurs when facts are in the record but due to mistake it has not been considered or appreciated or ignored.

There might be another error- error of discretion.

Rectification of error vis-à-vis Appeal

There is no explicit bar for simultaneous operation of rectification petition u/s 161 and appeal u/s 107. An application for rectification can be presented so long as no appeal is preferred against the order. However when appeal is already pending before the Appellate Authority, no rectification- petition should be entertained. But if the petition u/s 161 is filed first and subsequently appeal u/s 107 is filed, the jurisdiction of the adjudicating authority u/s 161 to deal with the application is not affected. If appeal is decided on the merits before an application of rectification is heard, such petition u/s 161 becomes infructuous and is liable to be dismissed.

Conclusion

The intention of the Parliament is clear. The order or decision etc. by the concerned authority should flawless and unblemished. But even any unintentional mistake arises, considering the normal human nature it should be rectified at once, when it is brought to the notice of the concerned person. All the errors are rectifiable if it is proved that the error is one on which there is no two opinions, error is incapable of argument or debate and most significantly error is conspicuous and obvious. But this power of rectification should not be confused with the appellate powers which enable an appellate authority to correct all errors committed by the subordinate authority.