Section 161 of the CGST Act — Filing of an SLP Does Not Justify Recall of Appellate Orders By G. Jayaprakash, Advocate & Former Central Excise Officer

1. Introduction

Section 161 of the Central Goods and Services Tax Act, 2017, permits rectification of “errors apparent on the face of the record.” It is a limited power, confined to correction of patent mistakes.

In Opasil Pigments And Chemicals (P) Ltd., M/s Shyam Enterprises Versus State Of U.P. And 2 Others - 2025 (9) TMI 467 - ALLAHABAD HIGH COURT , the Allahabad High Court clarified that Section 161 cannot be invoked to recall an appellate order merely because a Special Leave Petition (SLP) has been filed before the Supreme Court. Pendency of an SLP—without stay—does not render an order erroneous or recallable.

2. Legislative Intent and Scope of Section 161

The provision reads:

“Without prejudice to the provisions of section 160, any authority who has passed or issued any decision or order or notice or certificate may rectify any error apparent on the face of record…”

The phrase “error apparent” has received settled judicial interpretation. It refers to a mistake so evident that it leaves no room for debate. Section 161 parallels Section 154 of the Income-tax Act and Section 35C(2) of the Central Excise Act—each meant to allow correction of obvious mistakes, not reconsideration of law or fact.

Importantly, the section does not confer any power of review. Its narrow scope ensures finality of adjudication and prevents an endless appellate loop disguised as “rectification.”

3. The Facts and the Controversy

In Opasil Pigments, the assessee succeeded before the appellate authority. The department challenged the order by filing an SLP before the Supreme Court. Without any stay from the apex court, the department moved an application under Section 161 seeking recall of the same order, contending that pendency of the SLP made the earlier order “erroneous.”

The appellate authority entertained this plea. The assessee then invoked Article 226 jurisdiction of the High Court.

4. The High Court’s Findings

The Allahabad High Court quashed the recall order and laid down four vital propositions:

1. Rectification is not review. Section 161 cannot be employed to reopen or re-adjudicate issues already decided.
2. SLP pendency does not suspend an appellate order. Without a stay, the order continues to bind both parties.
3. No mistake apparent on record. Filing of an SLP is a subsequent event, not an error visible in the record of proceedings.
4. Judicial discipline demands finality. Once an appellate authority disposes of an appeal, it becomes functus officio except for correcting obvious errors.

Accordingly, the Court held that the rectification order was ultra vires the statute and struck it down.

5. Judicial Reasoning and Precedent

The Court’s reasoning aligns with TS Balaram, Income-Tax Officer, Company Circle IV, Bombay Versus Volkart Brothers And Others - 1971 (8) TMI 3 - Supreme Court and ASSISTANT COMMISSIONER, INCOME TAX, RAJKOT Versus SAURASHTRA KUTCH STOCK EXCHANGE LTD - 2008 (9) TMI 11 - Supreme Court, where the Supreme Court explained that a “mistake apparent on record” must be manifest and not one that requires argument or investigation.

By this standard, the mere act of filing an SLP cannot constitute an error; it is an external, later-arising circumstance.

The decision thus re-establishes the crucial distinction between rectification (correction of self-evident mistakes) and review (re-examination on merits). Conflating the two would destabilise the appellate hierarchy and erode certainty in tax adjudication.

1. Implications

For taxpayers:

This ruling assures that favourable appellate orders cannot be withdrawn at will. It enhances trust in the appellate mechanism and guards against administrative overreach.

For revenue authorities:

It serves as a caution that Section 161 cannot be wielded as a tool for re-litigation. Officers must act strictly within its textual limits.

For practitioners:

The decision provides a ready precedent to challenge improper “rectification” notices and to remind quasi-judicial authorities that finality is a principle of justice, not a procedural inconvenience.

7. Analytical Note

Section 161 was never designed to reopen the merits of adjudication. It is a mechanism for minor corrections—clerical, computational or patent legal slips.

The Allahabad High Court’s approach restores legislative balance:

• It upholds the taxpayer’s right to repose;
• It restrains the executive from enlarging its jurisdiction by implication; and
• It safeguards judicial hierarchy by recognising that appellate orders are final unless stayed or overturned by a higher forum.

8. Conclusion

The judgment in Opasil Pigments & Chemicals (P) Ltd. underscores a fundamental truth: rectification under Section 161 cannot be used as review in disguise. The mere filing of an SLP, without a stay, offers no ground to recall or modify a valid appellate order.

By reaffirming this boundary, the High Court strengthens judicial discipline under GST and reinforces the constitutional promise of fairness in fiscal administration.