R K Electricals vs. The Assistant Commissioner

A perusal of the material on record will indicate that pursuant to proceedings initiated by the respondent under Section 73 of the Karnataka Goods and Services Tax Act, 2017 (for short “KGST Act”), the respondent passed an Adjudication Order dated 28.02.2025, calling upon the petitioner to pay a sum of HC-KAR NC: 2025:KHC:49284 Rs.2,20,502/- towards tax, interest and penalty for the period from April 2020 to March 2021. However, subsequently, the respondent initiated rectification proceedings under Section 161 of the KGST Act, to which the petitioner submitted a reply, but did not participate in the proceedings thereafter, pursuant to which, the respondent passed the impugned rectification order dated 02.04.2025, enhancing the amount payable by the petitioner to Rs.85,75,228/- towards tax, interest and penalty for the period from April 2020 to March 2021, which is assailed in the present petition.

Learned High Court Government Pleader for the respondent submits that in view of availability of alternative remedy by way of an appeal under Section 107 of the KGST Act, there is no merit in this petition and the same is liable to be dismissed.

A perusal of the Adjudication Order dated 28.02.2025 and the impugned Rectification Order will indicate that the same is not in conformity with the limited/narrow/restricted scope and ambit of the provisions contained in Section 161 of the KGST Act which reads as under:- HC-KAR NC: 2025:KHC:49284 “161. Rectification of errors apparent on the face of record. - 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 Central 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.” HC-KAR NC: 2025:KHC:49284

As stated supra, perusal of the impugned Rectification Order will indicate that the same is not in conformity with the limited/narrow/restricted scope and ambit of Section 161 of the KGST Act and the impugned rectification order which purports/seeks to redo/reconsider the entire order on merits is illegal and arbitrary and the same deserves to be set aside.

Insofar as the contention urged by the respondent that there is availability of equally efficacious and alternative remedy by way of an appeal is concerned, having regard to my finding above that the impugned Rectification Order is contrary to the provisions contained in Section 161 of the KGST Act, coupled with the lack/want of juri iction on the part of the respondent to reopen/revisit the entire proceedings which is impermissible in law, mere availability of a remedy by way of an appeal would not come in the way of this Court exercising its juri iction under Article 226 of the Constitution of India.

Accordingly, I proceed to pass the following:- ORDER i) The Writ Petition is allowed. HC-KAR NC: 2025:KHC:49284 ii) The impugned Rectification Order dated 02.04.2025 at Annexure-A passed by the Assistant Commissioner of Commercial Taxes (Audit), Bhadravathi / respondent is hereby set aside. iii) The matter is remitted back to the respondent for reconsideration afresh in accordance with law. iv) Petitioner is directed to appear before the respondent on 18.12.2025. v) Liberty is reserved in favour of the petitioner to file pleadings, documents etc., which shall be considered by the respondent, who shall provide sufficient and reasonable opportunity to the petitioner and proceed further in accordance with law. (S.R.KRISHNA KUMAR) JUDGE BSS List No.: 2 Sl No.: 4