Substantive changes cannot be introduced in the Order by way of rectification of errors under Section 161 of the CGST Act

The Calcutta High Court has ruled that substantive changes cannot be introduced into an order through the process of rectifying apparent errors under Section 161 of the CGST Act. The court found that the Revenue Department Appellate Authority had effectively rewritten an order, exceeding the powers granted by this section. Consequently, the impugned order was quashed, allowing the writ petition.

The Hon'ble Calcutta High Court in the case of Sajal Kumar Das v. State of West Bengal [M.A.T. No. 2475 of 2023 dated January 09, 2024] allowed the writ petition and set aside the Order thereby holding that substantive changes cannot be introduced in the Order by way of rectification of errors under Section 161 of the Central Goods and Services Tax Act, 2017 ("the CGST Act").

Facts

Sajal Kumar Das ("the Appellant") filed a writ petition against the order dated August 23, 2023 ("the Impugned Order"), passed by the Revenue Department Appellate Authority ("the Respondent") with respect to the powers enumerated under Section 161 of the CGST Act for rectification of errors. The Appellant contended that the Respondent Original Authority cannot make substantive changes by way of filing rectification application. However, the Hon'ble High Court denied to pass any interim orders. 
Aggrieved, the Appellant filed an intra-court appeal before the Hon'ble Calcutta High Court. 

Issue

Whether substantive changes can be introduced in the Order under Section 161 of the CGST Act?

Held

The Hon'ble Calcutta High Court in the case of M.A.T. No. 2475 of 2023held as under:

• Noted that, as per Section 161 of the CGST Act the Respondent Authority should be able to point out the error which is apparent on the face of record, for rectification.  However, the Respondent failed to point out the error in the Impugned Order which is apparent on the face of record. 
• Opined that, the order suffers illegality as the Impugned Order has essentially been rewritten which is beyond the powers exercised under Section 161 of the CGST Act. 
• Held that, the Impugned Order is quashed. Hence, the writ petition is allowed.  

Relevant Provision

Section 161 of the CGST Act:

"161. Rectification of errors apparent on the face of record:-

Without prejudice to the provisions of section 160, and notwithstanding anything contained in any other provisions of this Act, any authority, who has passed or issued any decision or order or notice or certificate or any other document, may rectify any error which is apparent on the face of record in such decision or order or notice or certificate or any other document, either on its own motion or where such error is brought to its notice by any officer appointed under this Act or an officer appointed under the State Goods and Services Tax Act or an officer appointed under the Union Territory Goods and Services Tax Act or by the affected person within a period of three months from the date of issue of such decision or order or notice or certificate or any other document, as the case may be: 

Provided that no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other document: 

Provided further that the said period of six months shall not apply in such cases where the rectification is purely in the nature of correction of a clerical or arithmetical error, arising from any accidental slip or omission: 

Provided also that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification."