Appeal against the rectified order, Goods and Services Tax - GST

[HNA CharteredAccountants]

Can appeal be filed against the rectification order? The time limit to file appeal against the original order has expired.

Posts / Replies

[YAGAY andSUN]

Your query is of General nature, be specific for enabling us to revert, e.g. Appeal under the provisions of GST Laws, IT Laws or Customs Law.

[YAGAY andSUN]

Filing of an Appeal against Rectification Orders under GST Law when Limitation Period for Original Order Has Expired.

I. Legal Framework

Under the provisions of the Central Goods and Services Tax Act, 2017, the rectification of errors and the right to appeal are governed respectively by:

• Section 161 – Rectification of errors apparent on the face of the record
• Section 107 – Appeal to the Appellate Authority

II. Rectification under Section 161

Section 161 permits any authority who has passed a decision or order under the Act to rectify any error apparent on the face of the record, either:

• Suo motu, or
• Upon being brought to its notice by the taxpayer or other stakeholders.

Such rectification must be carried out within six months from the date of the original order, unless the rectification is purely clerical or arithmetical in nature, which may be made at any time.

III. Appealability under Section 107

Section 107 confers the right to appeal to any person aggrieved by any decision or order passed under the Act by an adjudicating authority. An appeal must ordinarily be filed within three months from the date of communication of the impugned order (with a permissible extension of one additional month upon showing sufficient cause).

IV. Whether a Rectification Order Is Appealable Where the Limitation for the Original Order Has Expired

It is a well-settled principle of law that:

1. A rectification order passed under Section 161 which modifies or alters the original order in any manner prejudicial to the assessee, constitutes a fresh cause of action, giving rise to an independent right to appeal under Section 107.
2. The expiry of the limitation period for preferring an appeal against the original order does not bar the assessee from challenging the subsequent rectification order, but only to the extent of the modifications or changes introduced by such rectification.
3. However, the rectification order does not reopen or extend the right to challenge the original order in toto. The assessee cannot agitate issues which remained unmodified or untouched by the rectification, if the limitation period for appealing against the original order has already lapsed.

This position finds indirect support in judicial precedents interpreting analogous provisions under other tax laws, and is consistent with principles of natural justice and statutory construction.

V. Practical Implications

Scenario	Right to Appeal	Remarks
Rectification order adversely modifies the original order	✅ Yes	Appeal maintainable against modified portion
Rectification is clerical/arithmetical and non-prejudicial	❌ No	No grievance, hence no appeal
Time limit to appeal against the original order has expired, but rectification introduces new liability	✅ Yes	Fresh limitation period arises in respect of modified content only
Attempt to use rectification appeal to reopen original grounds	❌ Not permissible	Appeal limited to rectification only

VI. Conclusion

A rectification order passed under Section 161 of the CGST Act, 2017, which results in a modification of the original order adversely affecting the taxpayer, is appealable under Section 107, notwithstanding that the limitation period to challenge the original order may have expired. However, such appeal shall be confined strictly to the extent of the rectified portion, and shall not reopen matters conclusively decided in the original order that remain unaltered.

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