S.161 DGST Act | Personal Hearing Can Be Dispensed Only If Assessee's Rectification Application Is Allowed, Not Rejected: Delhi HC
The Delhi High Court has held that in terms of proviso 3 to Section 161 of the Delhi Goods and Service Tax Act, 2017, an order rejecting the rectification application filed by an assessee cannot be passed without first hearing the assessee.A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta further said that the hearing can be dispensed with only where the...
The Delhi High Court has held that in terms of proviso 3 to Section 161 of the Delhi Goods and Service Tax Act, 2017, an order rejecting the rectification application filed by an assessee cannot be passed without first hearing the assessee.
A division bench of Justices Prathiba M. Singh and Rajneesh Kumar Gupta further said that the hearing can be dispensed with only where the rectification application is allowed. It observed,
“As per proviso 3 to Section 161, the rectification order, if allowed in favour of the Petitioner seeking rectification, hearing can be dispensed with. However, if the rectification is to be decided adversely affecting the right of the applicant, the principles of natural justice have to be followed and a hearing ought to be given, if sought.”
In the case at hand, a show cause notice was issued to the Petitioner for wrongful availment of Input Tax Credit in respect of certain purchases made by it and a final order rarsing demand of Rs.1,18,98,415/- was passed.
Petitioner had then moved an application seeking rectification of the final order citing calculation errors. It had submitted that it never claimed ITC for the amount of Rs.24,43,640/- in respect of one M/s Arun Sales and if this amount is deducted, the demand would be much lesser.
The said application was however rejected vide impugned order.
Before the High Court, Petitioner contended that while deciding the rectification application, the Petitioner ought to have been afforded a hearing in terms of the proviso 3 to Section 161 of the DGST Act.
Respondent submitted that the Petitioner was awarded full opportunity in the main proceedings and the rectification was dismissed as the GST Department had not found error apparent on the face of the record.
High Court said since an adverse order was passed against the Petitioner, “the personal hearing ought to have been afforded”.
Accordingly, the order in rectification application was set aside with a direction to the Department to decide it afresh after affording a hearing to the Petitioner.
Appearance: Mr. Pulkit Verma and Mr. Peyush Pruthi, Advs for Petitioner; Ms. Vaishali Gupta, Panel Counsel (Civil), GNCTD
Case title: HVR Solar Private Limited v. Sales Tax Officer Class Ii Avato Ward 67 & Anr
Citation: 2025 LiveLaw (Del) 434
Case no.: W.P.(C) 4506/2025
