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Upholds Correcting GST Portal Order That Showed Proceedings Dropped
The has upheld a issued by a GST officer to correct an inadvertent error on the GST portal, where the portal-generated order stated proceedings had been dropped even though the accompanying adjudication order confirmed a tax, interest and penalty demand on one of four issues.
A Division Bench of Justice Anil Kshetarpal and Justice Shail Jain held that the portal document and its annexure had to be read together. Since the annexure was uploaded with the original order and expressly incorporated into it, the corrected an apparent contradiction rather than creating a fresh demand.
A Tale of Two Documents: Portal Order vs. Annexure
The dispute arose from proceedings for the financial year 2018-19 under . A show cause notice dated raised four issues: reconciliation of outward supplies reported in GSTR-9, differences between GSTR-1 and GSTR-9, eligibility of Input Tax Credit (ITC), and ITC claimed in transactions with suppliers whose registrations had been cancelled or who had defaulted in filing returns or paying tax.
, the petitioner, submitted his reply and furnished explanations on each issue. On
, the GST portal generated an order titled
"Order for dropping the proceedings under section 73/74"
. Its operative portion stated that the proceedings were dropped
"for the reasons and other details stated in the Annexure attached herewith"
.
The annexure, however, told a different story on the fourth issue. It rejected the petitioner's explanation, held the ITC claimed in transactions with and as inadmissible, and quantified tax of ₹17,00,704, an equal amount of interest, and penalty of ₹1,70,070 under each of the CGST and SGST heads, aggregating to ₹71,42,956. It also directed payment within one month and referred to under .
The Department attributed the discrepancy to an incorrect selection made while generating the order on the GST portal. It subsequently issued a on , clarifying that relief had been granted on three issues while the demand on the fourth issue had been confirmed in the uploaded as an annexure.
Reading Between the Lines: Why the Annexure Couldn't Be Ignored
The petitioner argued that the digitally signed portal order should prevail over the unsigned annexure, and that the demand could not be sustained through a . Reliance was placed on , where an unsigned adjudication order was held unsustainable.
The court rejected this argument, noting that the portal order expressly referred to the annexure and that both documents had been uploaded together on
.
"In these circumstances, the Annexure cannot be treated as an independent unsigned order requiring separate authentication. It stood incorporated and adopted as part of the digitally authenticated Portal Order,"
the court observed.
The bench distinguished
Marg ERP Limited
on the ground that the order in that case was concededly unsigned, whereas here the digitally signed portal order incorporated the annexure.
"The objection that the demand contained in the Annexure is unenforceable merely for want of a separate signature on that document is, therefore, rejected,"
it added.
Rectification, Not Reconsideration: The Court's View on the
Examining the , the court explained that permits rectification of an , but cannot be used to reconsider the merits or create an adjudication that had not previously been made.
The error was apparent from the original composite order: the portal recital dropped the proceedings, while its incorporated annexure confirmed a demand on the fourth issue. The
preserved relief on the other three issues and repeated the existing findings and amounts.
"The
neither withdraws any relief granted by that order nor enlarges the demand,"
the court noted.
The court also rejected the petitioner's objection regarding
, holding that the rectification did not adversely change the petitioner's position under the original composite order, which had already quantified the disputed liability.
"The rectification therefore did not adversely alter the Petitioner's position under the original adjudication so as to attract the third proviso to
,"
it said.
The was issued 45 days after the original order, well within the six-month period prescribed by Section 161. Its issuance after the asserted adjudication deadline did not invalidate it, since it was a rectification rather than a fresh adjudication.
A Second Chance: Directions for Appeal and Recovery
While upholding the , the court directed the Department to furnish certified copies of the April 13 order, its annexure and the May 28 within two weeks, along with any additional document on which it proposes to rely. The corresponding statutory summaries in Form GST DRC-07 and DRC-08 must also be made available if not already uploaded.
The petitioner may file an appeal under within four weeks from the later of receiving those documents and obtaining access to the applicable statutory summaries. If filed within that period with the requisite , the appeal must be heard on its merits without being rejected on the ground of .
Recovery of the disputed demand shall remain in abeyance until the expiry of the appeal-filing period. If an appeal is filed in time with the , further recovery will be governed by .
The writ petition was dismissed subject to these directions. The court clarified that the merits of the disputed ITC demand and any surviving issue within the appellate authority's jurisdiction remain open for independent examination in the statutory appeal.
