M/S Ast Pipes Limited vs. Union Of INDIA And Another

Held

The Court held that the petitioner's claim clearly fell within the scope of the second proviso of Section 161 of the CGST Act, 2017, which exempts purely clerical or arithmetical errors from the six-month limitation period. The Court found the adjudicating authority's reasoning to be erroneous. It noted that the adjudicating authority itself recorded a discrepancy between the operative portion of the Order-in-Original and the consequential Form GST DRC-07. The Court reasoned that such a discrepancy would clearly fall within the description of an 'error apparent on the face of record' as contemplated under Section 161 of the CGST Act. The detailed order confirmed a tax demand of Rs. 317414/-, penalty Rs. 47,612/-, a demand of Rs. 3,25,972/- for wrongful availment of transitional credit, an equal penalty of Rs. 3,25,972/-, and interest of Rs. 57,878/-. However, the DRC-07 narrated a total tax demand of Rs. 6,43,386/-. The Court observed that the discrepancy of Rs. 317414/- confirmed by the detailed order was also described as adjusted against deposits made by the petitioner, which might not have been included in the DRC-07. Accordingly, the writ petition was allowed, and the impugned orders were set aside. The matter was remitted to the adjudicating authority for a fresh order under Section 161 of the Act within one month.

Facts

The petitioner, M/S Ast Pipes Limited, filed a writ petition challenging an order dated 10.09.2026 and its summary dated 11.09.2026, passed under Section 161 of the CGST Act, 2017, by the adjudicating authority. The petitioner had previously sought correction of an arithmetical mistake in Form GST DRC-07 dated 11.12.2023, aiming to reduce the tax demand by Rs. 3,17,414. This application was filed on 21.05.2026, which the petitioner contended was within the limitation period prescribed by the second proviso to Section 161 of the CGST Act, 2017. The adjudicating authority, however, found that the petitioner had not identified a specific clerical or arithmetical mistake and failed to establish that the discrepancy was merely a clerical or arithmetical error.

Key Issues

1. Whether the application for correction of the arithmetical mistake in Form GST DRC-07 dated 11.12.2023, filed on 21.05.2026, was within the limitation period prescribed by the second proviso of Section 161 of the CGST Act, 2017. Petitioner's contention: The petitioner argued that the application was filed within the limitation period as it pertained to the correction of a clerical or arithmetical mistake, which is exempted from the six-month period under the second proviso of Section 161 of the CGST Act, 2017. They sought a reduction in tax demand by Rs. 3,17,414. Revenue's contention: The revenue, through its counsel, was asked to obtain clear written instructions regarding the applicability of the second proviso of Section 161 of the CGST Act, 2017. No contrary fact was pointed out by the revenue on the subsequent date.