FACTS OF THE CASE

The Petitioner, Raman Enterprises, filed Writ Petition (Civil) 1349 of 2025 challenging an impugned order dated 30.12.2023 issued by the Respondent, Commissioner of SGST Delhi, which confirmed a demand of ₹15,39,686/‑ against the Petitioner under the Goods and Services Tax Act, 2017 (“the Act”). The Petitioner’s grievance was that the Show Cause Notice (SCN) dated 25.09.2023 did not fix a date for personal hearing. The Petitioner did file a reply to the SCN on 25.10.2023, but the impugned order was passed without hearing. Subsequently, the Petitioner also filed a Rectification Application on 27.03.2024, which was dismissed by the Department on 28.06.2024 as “unsatisfactory”. 

ISSUES INVOLVED

  1. Whether the Writ Petition was maintainable considering the delay in challenging the impugned order.
  2. Whether the impugned Rectification Order dated 28.06.2024 complied with the provisos to Section 161 of the CGST Act, 2017, especially regarding the principles of natural justice.
  3. Whether an opportunity of hearing ought to be afforded to the Petitioner when a rectification adversely affects the assessee.

PETITIONER’S ARGUMENTS

The Petitioner contended that:

  • The SCN was defective because no personal hearing date was fixed before passing the impugned order.
  • The impugned order was passed without affording an opportunity to be heard.
  • The Rectification Application ought to have been considered on its merits.
  • The Rectification Order was mechanical and did not accord with the natural justice mandate found in the third proviso to Section 161 of the CGST Act, 2017.
    Furthermore, the Petitioner explained the delay in filing the petition by stating that a dispute with its GST consultant resulted in unawareness of the impugned order and therefore a reasonable cause for delay.     

RESPONDENT’S ARGUMENTS

The Respondent maintained that:

  • The Petitioner had a full opportunity to file a reply to the SCN which it did on 25.10.2023, and hence there was no ground for challenging the impugned order.
  • The delay in filing the writ petition was not sufficiently explained.
  • The Rectification Order was rightly passed as no error apparent on the face of record was found.
    The Department rejected the Rectification Application on the ground that the reply filed by the Petitioner was found “not satisfactory” and thus no rectification error existed within the meaning of Section 161.     

COURT ORDER / FINDINGS

  1. Maintainability and Delay: The Court found that the Petitioner had adequate opportunity to submit a reply to the SCN, which was done. The delay in challenging the impugned order was not sufficiently explained; therefore, no grounds were made out to entertain the challenge to the impugned order of 30.12.2023.
  2. Rectification Order – Natural Justice: The Court examined the third proviso of Section 161 of the CGST Act, 2017 which mandates that if a rectification adversely affects a person, principles of natural justice must be followed.
  3. The Court held that the Rectification Order dated 28.06.2024 was mechanical and lacked reasons in the face of the Petitioner’s rectification application. Since the rejection of rectification adversely affected the Petitioner, a personal hearing ought to have been granted.
  4. Consequently, the Rectification Order dated 28.06.2024 was set aside, and the Petitioner was to be afforded a personal hearing for its Rectification Application. After hearing, the authority was directed to pass a reasoned order, preserving the Petitioner’s appellate remedy in law. 

IMPORTANT CLARIFICATION (KEY LEGAL TAKEAWAYS)

Rectification under Section 161: Natural justice applies where a rectification order adversely affects the assessee.
 Mere dismissal without reasons when a hearing should be provided is unsustainable in law.
 Delay in preference of writ petition must be reasonably explained to justify entertaining after limitation lapses.
 Opportunity of hearing is a fundamental procedural requirement when an adverse order is to be passed post‑rectification.

SECTIONS INVOLVED

• Section 161, Goods and Services Tax Act, 2017 – Rectification of Errors Apparent on the Face of Record (including third proviso).

Link to download the order - https://delhihighcourt.nic.in/app/showFileJudgment/PMS22082025CW13492025_145813.pdf

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