M/S Areca Indocorp LLP vs. Principal Commissioner Of Central Goods And Service & Anr.

Facts

The petitioner, M/s Areca Indocorp LLP, filed a writ petition challenging a Show Cause Notice (SCN) dated 01.08.2024 and subsequent summary SCNs dated 03.08.2024, along with an impugned order dated 25.01.2025 and summary orders dated 25.01.2025. These were issued by the Respondent No. 2 department and Respondent No. 1 department, respectively. The SCNs and orders pertained to alleged fraudulent availment of Input Tax Credit (ITC) based on "goodless invoices." The respondents admitted in their counter-affidavit that there was an inadvertent error in the electronically generated Form OST DRC-01, where the period and amount reflected were for another noticee, Rajdhani Industries, due to a human and typographical error during manual data entry. The total disputed amount for a separate SCN was Rs. 1,14,47,208/-.

Held

The Court acknowledged that the petitioner has a remedy of appeal against the impugned order dated 25.01.2025. The Court noted the respondent's admission of an inadvertent error in the electronically generated Form OST DRC-01, where the period and amount were mistakenly reflected for another noticee due to human and typographical error during manual data entry. However, the respondent argued that this was a curable clerical discrepancy with no nexus to the merits of the adjudication, and that the substantive contents of the SCN and the Order-in-Original correctly identified the demand against the petitioner, thus causing no prejudice. The Court did not decide on the merits of the alleged fraudulent availment of ITC or the validity of the proceedings. Instead, it directed the petitioner to avail the alternative remedy of appeal. The Court also stated that if the petitioner files an application under Section 14 of the Limitation Act, 1963, for excluding the period during which the writ petition remained pending, the Appellate Authority shall consider it in accordance with the law. The writ petition was disposed of with these observations.

Key Issues

1. Whether the inadvertent error in the period and amount reflected in the electronically generated Form OST DRC-01, as admitted by the respondent, invalidates the proceedings against the petitioner? The petitioner argued that the arbitrary and illegal actions of the respondents, including the alleged errors in the SCN and orders, caused them mental harassment and inconvenience, seeking compensation. The petitioner sought to set aside the impugned SCNs and orders. The respondent contended that the error in the electronically generated form was a curable clerical discrepancy, a mere portal-level typographical error, and that the substantive contents of the SCN and the Order-in-Original correctly identified the demand against the petitioner. They argued that the petitioner suffered no prejudice and the proceedings could not be invalidated on this basis. The respondent relied on the fact that the SCN and Order-in-Original consistently and correctly mentioned the demand confirmed against the petitioner.