Assessee got favourable ITC unblocking order, but Department issued rectification beyond 6 months; Karnataka High Court quashed rectification and SCN as time-barred and without jurisdiction.

Whether a rectification order under Section 161 of the CGST Act can be sustained when passed beyond the statutory limitation of six months from the date of the original order, and whether the consequential show cause notice is valid.

Section 161 permits rectification of errors apparent on record only within six months from the date of the original order. Any rectification beyond this prescribed limitation is without jurisdiction and void.

The Assessee had obtained an original order dated 12.09.2024 directing unblocking of ITC. Thereafter, the Department issued a show cause notice on 08.11.2024 and passed a rectification order on 27.03.2025. The Court noted that the rectification order was admittedly passed beyond six months from the original order. Hence, the exercise of power under Section 161 was not in accordance with statutory limitation.

Since the rectification was time-barred, both the rectification order and the related show cause notice were quashed, and the writ petition was allowed

IMPACT ANALYSIS ⚖️
This judgment firmly reiterates that limitation under Section 161 is mandatory, and any delayed rectification becomes void—protecting Assessees from endless reopening of concluded matters.

Title: Kunal Traders vs. State of Karnataka
Court: High Court of Karnataka (Dharwad Bench)
Citation: (2026) 100 TLC (GST) 132
Dated: 01.04.2026