Rectification application u/s161 TNVAT: 90-day filing limit and COVID limitation extension; rejection order quashed, remitted

The dominant issue was whether the rectification application under s.161 TNVAT was time-barred. The HC held that the computation of the 90-day limitation had to exclude the period covered by the SC's suo motu extension of limitation, with the balance period recommencing thereafter; on this basis, the rectification application filed within the extended period was within limitation, and the rejection as barred by time was legally unsustainable, leading to quashing of the impugned rejection order. The HC further held that reconsideration must comply with principles of natural justice; accordingly, the matter was remitted for fresh consideration with a personal hearing, to be completed within eight weeks.

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Issues involved:
The writ petition challenges the Assessment order based on the petitioner's entitlement to transition credits under section 140 of GST enactments and the rectification application filed under section 161.

Challenge to Assessment Order:
The petitioner claimed entitlement to transition credits under section 140 of GST enactments, but inadvertently specified the CENVAT credit under TNVAT Act in the wrong column of Form TRAN-1. The respondent issued a notice stating no ITC was available under TNVAT, leading to the rejection of the credit in TRAN-1. The petitioner filed a rectification application under section 161, which was rejected on grounds of limitation and error not being self-evident. The respondent rectified the assessment order, reducing the penalty to Rs.10,000 without a personal hearing for the rectification application.

Rectification Application under Section 161:
The petitioner argued that the rectification application was filed within the extended time period as per the order of the Hon'ble Supreme Court, making it within the limitation period. Citing a previous judgment, the petitioner contended that the limitation issue was saved by the Supreme Court's orders, and the rectification application should be considered independently. The Court agreed, setting aside the impugned order and remitting the matter back to the respondent for reconsideration, emphasizing the independent nature of the decision-making process and granting a personal hearing to the petitioner.

Judgment Outcome:
The Court allowed the writ petition, quashed the impugned order dated 09.03.2023, and directed the respondent to reconsider the petitioner's case in light of Section 161 of the GST Enactments and the Hon'ble Supreme Court's judgment. The respondent was instructed to provide a personal hearing and complete the reconsideration process within eight weeks. The writ petition was allowed with no costs incurred.

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