LITIGATION MANAGEMENT IN GST REGIME (PART -6)

[Dr. Sanjiv Agarwal]

Scope of rectification under section 161 is very wide as it includes decisions, notice, certificate and other documents issued. Rectification of errors under section 161 of the act is alternate legal remedy available to the aggrieved taxable person to correct order or decision etc apart from an appeal under section 107 of the act. Generally, in respect of errors other apparent on the face of record involved in the order, aggrieved person may file appeal against said order and raise all grounds in appeal. However, where errors in the order which are apparent on the face of record are found, then aggrieved person may apply for rectification as per section 161 of CGST Act, 2017. In case an application is rejected on the ground that error is not apparent on the face of record or if the person is not satisfied with the rectification order issued by the authority, then an appeal can be filed against such order to the appellate authorities which is infact an additional alternate remedy to the aggrieved person. Similarly, it provides an additional corrective remedy, in addition to review and appeal, available to the authorities to remove error and correct the impugned order.

Statutory Provision

Rectification of errors apparent on the face of record (Section 161)

161. 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.

Salient features of Rectification of Errors under section 161 of CGST Act, 2017

• Rectification of errors which are apparent on the face of record are allowed under section 161 of the CGST Act, 2017.
• Section 161 operate without prejudice to the provisions of section 160 which stipulates that assessment proceedings etc. shall not be invalid on certain grounds.
• The authority who has issued any decision, order, summon, notice or any certificate may rectify any mistake apparent from record in such documents. Such rectification by such authority can be done:

1. Suo-moto by such authority
2. On bringing to notice of such authority by GST official (Centre / State / UT)
3. On bringing to notice by the affected person.

• Errors apparent on the face of record means an obvious mistake (not defined in GST). It may include:

1. Misreading a clear provision is a mistake,
2. Application of a wrong provision of Act,
3. Applying an inapplicable provision,
4. Overlooking a mandatory provision, and
5. Non-following of decision of jurisdictional High Court.

Rectification of Errors (What, how and when)

• Subject matter of rectification  under section 161 of CGST Act, 2017 can be any:
  1. Decision
  2. order
  3. Notice
  4. Certificate
  5. Any other document
• Application for rectification to be made within a period of 3 months from the date of issue of order etc.
• In case of suo-moto rectification, there is no time limit of 3 months
• Rectification order to be passed within a period of 6 months from the date of issue of order etc.
• No such rectification is permitted after 6 months from the date of issuance.
• Time limit of six months is not applicable where rectification is purely in the nature of correction of clerical or arithmetical error, arising from any accidental slip or omission.
• Where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification.
• While correcting any mistake under section 161, no rectification can be made in the substantive portion of the document.

Applicable Rule and Form

Applicable Rule [Rule 142(7)]

Where a rectification of the order has been passed in accordance with the provisions of section 161 or where an order uploaded on the system has been withdrawn, a summary of the rectification order or of the withdrawal order shall be uploaded electronically by the proper officer in FORM GST DRC-08.

This rule requires a summary of the rectification order passed under section 151 to be uploaded electronically by the Proper Officer in form GST DRC-08. The same form is used for withdrawal of order. It contains details of original order and rectification order and details of original demand and demand after rectification.

Applicable Form

Form GST DRC-08 is required to be issued under section 142(7) as a summary of rectification order. This form was substituted vide Notification No. 16/2019 –CT dated 29.03.2019 w.e.f. 01.04.2019.