GST Rectification Order must be Passed by Same Authority that passed Original Order: Delhi HC [Read Order]

The Delhi High Court has clarified that rectification of a GST (Goods and Services Tax) order must be carried out by the same authority that passed the original order.

A petition was filed by Ganpati International challenging an order-in-original (OIO) dated 31 January 2025, which had raised a demand of ₹6,65,415 against the petitioner in relation to alleged availment of Input Tax Credit (ITC) from M/s Swagat Enterprises, accused of issuing goods-less invoices.

The case originated from a show cause notice dated 23 July 2024, issued to more than 100 noticees, including the petitioner. Following adjudication, the CGST Department, Delhi North, passed the OIO against the petitioner.

Dissatisfied by this, the petitioner sought rectification, arguing that the tax had been incorrectly computed and the demand wrongly included the entire value of goods. However, instead of the CGST Department, the Delhi GST Department adjudicated the rectification application and passed a rectification order dated 24 June 2025.

The petitioner challenged this rectification order before the High Court, contending that it was legally impermissible for a different department to adjudicate a rectification when the original order was passed by CGST.

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The counsel for Delhi GST Department, conceded that rectification applications must ordinarily be dealt with by the same authority that issued the original order.

Therefore, Justice Prathiba M. Singh and Justice Shail Jain noted two critical lapses that (1) the petitioner was not granted a personal hearing in the rectification proceedings, contrary to the third proviso to Section 161 of the CGST Act, 2017 and (2) the rectification order was admittedly passed by the wrong department, making it legally unsustainable.

Accordingly, the High Court set aside the rectification order dated 24 June 2025 and directed that the rectification application be reheard afresh by the CGST Department, which had originally passed the OIO. The Court further directed that the petitioner be given a personal hearing before a fresh decision is taken.

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