GST rectification application rejection under Section 161 violates natural justice principles despite prior payment

The Madras HC through Justice C. Saravanan allowed a writ petition challenging GST assessment and rectification rejection orders. The petitioner had paid Rs. 14,71,418/- before responding to show cause notice but faced confirmed demand of Rs. 6,82,488/-. The rectification application under Section 161 of TNGST Act, 2017 was rejected as the alleged error was deemed not "apparent on record." The Court found violation of natural justice principles in the rejection order, set aside the order dated 05.06.2025, and remitted the matter for fresh consideration with proper hearing opportunity. Petition allowed without costs.

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The Madras High Court, through Justice C. Saravanan, allowed the writ petition challenging the assessment order dated 24.01.2025 and the subsequent rejection dated 05.06.2025 of the rectification application under Section 161 of the TNGST Act, 2017. The petitioner contended that despite having paid Rs. 14,71,418/- prior to responding to the show cause notice (DRC 01 dated 26.11.2024), the respondent confirmed a demand of Rs. 6,82,488/-. The rectification application was rejected on the ground that the alleged error did not constitute an "error apparent on the face of the record," as Section 161 limits rectification to clerical or arithmetical mistakes not requiring substantive examination.The Court found a violation of the principles of natural justice in the rejection order and set aside the order dated 05.06.2025. It remitted the matter back to the respondent to pass a fresh order under Section 161 after affording the petitioner an opportunity of hearing. The petition was allowed with no costs, and connected miscellaneous petitions were closed.

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