Rejection of GST S.161 Application for ‘No Apparent Error’ Set Aside by Madras HC, Orders Fresh Consideration [Read Order]

The Madurai Bench of the Madras High Court has set aside an order passed by the Deputy State Tax Officer rejecting an application filed under Section 161 of the Tamil Nadu Goods and Services Tax ( TNGST ) Act, 2017, on the ground that there was "no error apparent on the face of the record."

The Court directed the authority to pass a fresh order after affording the petitioner an opportunity of hearing.

The petitioner, Tvl. Monikandan (represented by its proprietor), challenged the assessment order dated 24.01.2025 for the tax period April 2020 to March 2021.

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It was contended that even before the reply to the show cause notice, the petitioner had already deposited a substantial amount ₹14,71,418 against a demand of ₹14,88,446. However, without considering this payment, the respondent passed a final order confirming a demand of ₹6,82,488.

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Aggrieved by the oversight, the petitioner sought rectification under Section 161 of the TNGST Act. However, the rectification application was rejected through an order dated 05.06.2025, with the authority stating that the issue raised was not a clerical or arithmetical error and thus did not fall within the limited scope of Section 161.

Justice C. Saravanan, after considering submissions, observed that there is a violation of the principles of natural justice. Accordingly, the Court quashed the impugned order dated 05.06.2025 and remanded the matter to the respondent authority with instructions to pass a fresh order in accordance with law, after granting an opportunity of hearing to the petitioner.

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