M/S Gmj Paper And Boards Private Limited vs. The Commercial Tax Officer

Facts

The petitioner, M/s.GMJ Paper and Boards Private Limited, filed a writ petition challenging an order of rectification dated 30.04.2024 issued by the Commercial Tax Officer, Palani – II Assessment Circle. The petitioner is a dealer engaged in the manufacture and supply of paper. For the assessment year 2018-2019, an order of assessment was passed on 30.04.2024, accepting the petitioner's returns. On the same day, the respondent issued an order of rectification, purportedly under Section 161 of the Central Goods and Services Tax Act, citing a mismatch between GSTR 3B and GSTR 1. The petitioner contended that the rectification order was passed without notice and arbitrarily, especially since it was issued on the same day as the original assessment order.

Held

The Court held that the order of rectification passed by the respondent on 30.04.2024 was set aside. The reasoning was based on the respondent's inability to explain how an order of rectification could be passed on the same day as the order of adjudication. The Court found this to be an arbitrary exercise of power. The principle derived is that statutory authorities must be able to justify their actions, especially when rectification orders are passed on the same day as original assessments, and that procedural fairness, including providing notice for adverse orders, is paramount. The operative direction was to set aside the impugned order of rectification.

Key Issues

1. Whether the order of rectification dated 30.04.2024, issued by the respondent, is without jurisdiction and in clear violation of statutory provisions, specifically Section 161 of the Central Goods and Services Tax Act, 2017? Petitioner's arguments: The petitioner argued that the rectification order was passed arbitrarily and without jurisdiction. A key contention was that the rectification order was issued on the very same day as the original assessment order, which was accepted. Furthermore, the petitioner asserted that any rectification having an adverse effect, as per Section 161 of the Act, must be preceded by putting the petitioner on notice. Respondent's arguments: The learned Government Advocate for the respondent was unable to explain how the respondent authorities passed an order of rectification on the same day the order of adjudication was made.