Sanchayita Lahkar

The High Court of Kerala Single Bench of Justice Ziyad Rahman A.A. held that the issuance of two conflicting tax assessment orders on the same subject matter constituted an error apparent on the face of the record. The Court quashed the second assessment order, which was passed contrary to an earlier order dropping proceedings on identical grounds. It also quashed the rejection of the rectification application filed by the petitioner, observing that the authority had a legal duty to invoke rectification powers under Section 161 of the Goods and Services Tax Act, 2017. The writ petition was accordingly disposed of.

The petitioner, a private limited company registered under the Central and Kerala State Goods and Services Tax Acts, challenged two orders—Ext.P8, an adverse tax assessment order dated 30 December 2023, and Ext.P14, an order dated 27 January 2025 rejecting the petitioner’s request for rectification of the earlier order.

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The origin of the dispute lay in a set of show-cause notices issued for the financial year 2017–2018. The petitioner first received a notice dated 18 October 2021 pointing out discrepancies in the return filings. A reply was submitted, and proceedings were finalized in the petitioner’s favour by way of Ext.P7, dated 8 December 2023, under Sections 73 and 74 of the CGST Act, accepting the explanation and dropping the proposed demand.

Simultaneously, another officer issued a second show-cause notice dated 28 September 2023 based on the same discrepancies. This notice culminated in the issuance of Ext.P8 order on 30 December 2023, which rejected the petitioner’s explanations and finalized proceedings against the company. Notably, Ext.P8 was passed after Ext.P7 had already concluded the issue in the petitioner’s favour.

Upon receiving Ext.P8, the petitioner immediately submitted a request for rectification via email (Ext.P9) on 1 February 2024 to the second respondent—the same officer who issued Ext.P8. Additional representations followed in the form of Ext.P12 and Ext.P13 after there was no response to earlier submissions.

In Ext.P14, the second respondent acknowledged the duplication and existence of conflicting conclusions in Ext.P7 and Ext.P8. However, the request was declined on the ground that the rectification application had not been uploaded via the GST Portal and was not submitted within the six-month period prescribed under Section 161 of the GST Act.

The petitioner challenged this rejection on the ground that the email submission of Ext.P9 was within the prescribed time limit and that the authority had the power to act suo motu in the face of an error apparent on the record.

The State opposed the petition, contending that the procedural requirement under Section 161 had not been met, and hence the authority could not act upon the rectification request.

The judgment recorded that by the time the Ext.P8 order was issued against the petitioner, an earlier order, Ext.P7, had already been passed in which the petitioner’s explanation was accepted and the proceedings were dropped.

In light of this, the Court stated that the second order could not have been issued, leading to the conclusion that Ext.P8 contained an error apparent on the face of the record.

Regarding the powers conferred under Section 161 of the GST Act, the Court noted that their invocation is not limited solely to situations where an aggrieved party submits a formal rectification application.

It was stated that if an error is either brought to the notice of the officer or otherwise comes to the officer’s attention, and such error is apparent on the face of the record, the officer has the authority to initiate rectification proceedings on their own motion.

Since both orders were based on proceedings alleging the same irregularities, the Court recorded that there was a clear duplication, which constituted an error apparent on the record in respect of Ext.P8.

The existence of two mutually conflicting orders passed on the same issue by officers of the same department was, according to the Court, a matter that should have been rectified.

The Court further noted that Ext.P7, being the first order that accepted the petitioner’s explanation, rendered the later and contradictory Ext.P8 order impermissible.

When such a material error had been clearly brought to the authority’s attention within the statutory timeframe provided under Section 161, the authority was not justified in failing to invoke its power of rectification.

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Given that the receipt of Ext.P9 was admitted and that it was filed within the statutory period, the Court held that the second respondent’s failure to exercise rectification powers under Section 161 was improper.

Consequently, it was concluded that the basis on which Ext.P14 was issued to decline the rectification request could not be regarded as legally sustainable.

The High Court concluded that Ext.P8 and Ext.P14 could not be sustained in law. It stated: “In such circumstances, this writ petition is disposed of, quashing Exts.P8 and P14, as the adjudication on the discrepancies highlighted in the show cause notices for the assessment year 2017–2018 stood concluded by way of Ext.P7 order.”

Advocates Representing the Parties

For the Petitioners: Shri K.S. Hariharan Nair, Smt. G. Remadevi, Smt. Harima Hariharan, Shri Rajath R. Nath, Shri Dheeraj Sasidharan
For the Respondents: Shri Arun Ajay Sankar, Government Pleader

Case Title: M/s Winter Wood Designers & Contractors India Pvt. Ltd. v. The State Tax Officer & Others
Neutral Citation: 2025:KER:40345
Case Number: WP(C) No. 9086 of 2025
Bench: Justice Ziyad Rahman A.A.