Kamal Kumar Proprietor Of Ms Aastha Electricals vs. Assistant Commissioner

Held

The Court held that the impugned order dated 02.08.2025, rejecting the rectification application, should be set aside. The Court noted that the fact relating to the petitioner-firm having made deposits of the alleged amount due against it did not find mention in the order dated 02.08.2025. The Court reasoned that this fact would have a material bearing on the decision. Consequently, the Court permitted the petitioner to file a fresh application for rectification, along with evidence of the deposit made. The Court directed that this fresh application would be examined on merits without raising any objection regarding limitation and would be decided by a speaking order after affording an opportunity of hearing to the petitioner. The writ petition was allowed to this extent.

Facts

The petitioner, Kamal Kumar, filed a writ petition challenging an order dated 02.08.2025 by the Assistant Commissioner, State Goods and Service Tax, rejecting his application for rectification. The petitioner also challenged an order dated 14.12.2022 issued under Section 74 of the GST Act, along with a Summary of Order in Form GST DRC-07. The dispute arose from input tax credit availed by the petitioner, which the Department alleged was based on supplies from a non-existent entity. Show Cause Notices were issued, and the petitioner claims to have deposited Rs. 5,40,000/-. Subsequently, a Show Cause Notice for cancellation of GST registration was issued, leading to the rectification application, which was rejected as time-barred. The petitioner argued that the deposit made should have been considered on merits.

Key Issues

1. Whether the Court should quash the order dated 02.08.2025 rejecting the petitioner's application for rectification, considering the petitioner's submission that the entire alleged amount due has been deposited and the application should be decided on merits rather than technicalities, as per Section 161 of the GST Act? The petitioner argued that the deposit of Rs. 5,40,000/- under the IGST through its Cash Ledger should have been considered by the respondent authority while deciding the rectification application. The petitioner contended that the application should have been decided on merits, overlooking technicalities like limitation, given the deposit made. The petitioner relied on the principle that substantial justice should prevail over technical objections. The respondent did not record any specific arguments in the judgment.