April 16, 2024

Instructions regarding rectification of assessment orders under GST| Department of Trade and Taxes, Delhi

GST Assessments, u/s 73, are already closed for FY 2017-18 and the due date of issuance of order for FY 2018-19 is 30th April, 2024. In many of the Assessment orders, the taxpayers have faced genuine hardship such as as the Assessment orders passed are not the speaking one or assessment orders contain clerical mistakes causing unnecessary increase in demand amount.

Also, there are several cases where the taxpayer has furnished the reply, however, the proper officer has confirmed the demand mentioned that no reply has been furnished or without considering such reply.

As per representations received from the industry, in assessment orders issued in form GST DRC-03, there are many errors, including clerical/ arithmetical, which can be simply resolved by invoking rectification provisions and can prevent the taxpayers from genuine hardship. Therefore, the Government of NCT of Delhi has come up with instructions regarding rectification of assessment orders to correct the error apparent on the face vide Instructions No. Instruction No. F. No.3(543)/GST/POLICY/2024/1312-18 dated 1st March, 2024. In furtherance of the same, the department has come with certain further instructions vide instructions No. F. No.3(543)/GST/POLICY/2024/1355-60 dated 21st March, 2024.

This article elaborates instructions issued with respect to rectification under GST:

1. Provisions related to rectification of errors apparent on the face of records:

Provisions related to rectification of errors apparent from records are given under Section 161 of CGST Act.
As per Section 161 of CGST Act, any authority, who has passed or issued any decision or order or notice, may rectify any error which is apparent on the face of record in such order or decision or notice.
Such rectification can be made by the authority:
- on his own motion or
- on an application received from any other officer or the taxpayer.

However, such communication about rectification should be received within 3 months from the date of issuance of decision.
Further, no such rectification shall be made after a period of 6 months from the date of issuance of such decision.
Further, such a period of 6 months shall not apply where the rectification is purely in the nature of correction of a clerical or arithmetical error arising from any accidental slip or omission.

2. Rectification Order

As per Rule 142(7) of DGST Rules, 2017, where any rectification order has been passed in accordance with Section 161 of CGST Act or where an order uploaded on the system has been withdrawn then the proper officer shall issue the rectification order or withdrawal order in Form GST DRC-08.

3. Points to be considered while invoking provisions of rectification

As per instructions, the government has directed the proper officer shall take care of the following points while invoking provisions of rectification:

In case of suo-moto rectification, reasons for initiating rectification should be recorded in writing before initiating proceedings.
Where rectification is initiated on the application of registered person then proper has to ensure that:
- Such application for rectification is received within a period of 3 months from the date of order; and
- Rectification order is issued within 6 months, in form GST DRC-08, from date of original order.

The power of rectification is limited only to the mistakes which are apparent on the face of record. The application for rectification can be made if the mistake is ex-facie and the matter does not require any further argument or presentation.
Rectification can’t be requested when appeal has already been filed by the taxpayers

4. Cases where rectification provisions can be invoked

As per Instructions No. F. No.3(543)/GST/POLICY/2024/1312-18 dated 1st March, 2024, rectification request can be invoked in following cases (cases from point c. onwards are added through instructions No.3(543)/GST/POLICY/2024/1355-60 dated 21st March, 2024) :

Demand already deposited through DRC-03: Where the taxpayer has already paid the demand amount through DRC-03 and informed the GST officer about the same. However, proper officer failed to consider the same while issuing the demand order.

Arithmetic/ Clerical Error: Where demand order contains a arithmetic or clerical error, i.e., calculation error or head error, i.e., IGST, CGST and SGST.

Reply filed but not considered by Assessing Authority: As per representation received, there are various cases where the registered person has filed the reply against show cause Notice. However, while issuing order in Form GST DRC-07, the proper stated that no reply has been filed by the taxpayer. However, as a matter of fact, the proper officer has failed to consider the same.

Multiple Show Cause Notice and Demand orders are issued for same year and same matter: There are instances where a proper officer has issued multiple show cause notice for the same matter and same financial year and consequently issued multiple assessment orders. Therefore, if a proper officer arrives at a conclusion that the subject-matter of multiple orders are the same, Proper Officer may invoke the provisions of Section 161 of the DGST Act after the due verification and examination.

However if the subject-matter of the SCNs/Orders are different, then the case would not fall under the ambit/scope of Rectification.

Annexures to SCN are not attached or attached of some other taxpayer: where either the Annexure to the Show Cause Notices was not attached or Annexure is attached of some other taxpayer and the taxpayer had furnished the reply according to such annexure and the proper officer did not considered such reply before passing the order.

Further, the above-mentioned list is indicative in nature and is not an exhaustive one. Therefore, if a proper officer comes across a similar case, a decision may be taken on the same in accordance with law. However, the timeline of filing applications for rectification and rectification order should be strictly adhered to.

DISCLAIMER: The views expressed are strictly of the author and VJM & Associates LLP. The contents of this article are solely for informational purpose. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.

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