Even when the error is committed by tax officer, taxpayers bear the burden.

1. It is really very strange to note that whenever any taxpayer commits an error due to ignorance or lack of clarity on legal provision  or it happens to be  an inadvertent error with no intention to evade payment of tax, the facts are not truly appreciated by tax officials and section 74 is applied with maximum possible penalties whereas whenever any error,  even when it is grave when committed by a tax official, the same is taken very leniently by the jurisdictional high courts and the officer,  who did injustice to the taxpayer is very safe as no strictures are passed for the grave error in almost all such cases. Almost in all cases, even cost is not imposed as the counsel for petitioner, normally do not insist on cost.

2. Yesterday, I had an occasion to go through the order passed by one of the high courts in India. The order is dated 22/01/2026. The issue involved is a small taxpayer at a remote location failed to file the GSTR 3B in time during the year 2020-21. Accordingly, interest was demanded on 26/08/2022 which was duly paid by the taxpayer. Ideally, issues should have been closed here but it did not happen.

3. On 16/01/2023, a demand was raised on the taxpayer again for the same tax period and also for the very same reason for which applicable dues were already paid based on the first demand.

4. Though it was possible to apply for rectification as this is an error apparent on record, as the taxpayer was aware that the same is most likely not to be entertained, preferred writ before the jurisdictional high court.

5. The court, vide para 7 of the order observed that there is duplication of proceedings which leads to double taxation.  As the second order was not legally sustainable, the same was quashed.

6. Vide para 8, writ petition was allowed, and no cost was imposed on the erring official.

7. While it is the prerogative of the jurisdictional court to decide on cost as well as passing strictures against the erring official, leniency was shown.

8. It is not my case that cost is required  to be imposed in each and every case where the officer has committed error but it is definitely a case that wherever the error is grave like the one in this case, imposing cost is a necessity.

9. This is so because, in the instant case, the taxpayer paid a major portion of the demand which was subsequently quashed for preferring the writ. It has to be kept in mind that the taxpayer is a small firm.

10. Having crossed this stage, at least the CBIC should develop a mechanism to do root cause analysis in all the cases wherever the orders passed by the tax officer is later quashed by the competent court.

11. The taxpayer is suggested to forward a copy of the High Court order to the concerned commissioner who is in charge of review of orders passed under GST to enlighten him on this happenings.

12. A copy of the High Court order deserves to be shared with the Member handling GST at CBIC.

13. While the author of this article is no way connected with petitioner or respondent in whatever manner, he is prompted to write this article as injustice has been done to the taxpayer.

14. The moot question that needs answer is that why the taxpayer should suffer for an error committed by the tax officer.

15. This article is written not to criticize anyone but to create awareness amongst all connected with GST on this kind of happenings.

16. Taxpayers and tax professionals are requested to examine each and every demand raised critically and compare those issues with the recent high court rulings for better clarity. All demands which are legally not sustainable must be challenged appropriately.

17. The order passed by the high court is binding on all tax officials working under the jurisdictions of the High Court and in case any other officer, who is in the same State that of the High Court which passed the order on 22/01/2026, also pass similar second order, resulting in duplication of proceedings,  a case of contempt of court may be possible.

18. All tax officials are expected to raise only genuine demands in future and  not any infructuous ones to save justice.