The Orissa High Court has set aside a GST authority’s order rejecting an application for rectification under Section 161 of the Central Goods and Services Tax Act, 2017 and the Odisha Goods and Services Tax Act, 2017, after finding serious inconsistencies in the record concerning the rejection order and its communication to the taxpayer.
The Bench of Justice Manash Ranjan Pathak and Justice Murahari Sri Raman held that the impugned rejection order could not be sustained in law and remanded the matter to the Assistant Commissioner of State Tax, CT & GST Circle, Barbil, for fresh consideration.
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The bench directed the authority to provide the petitioner an opportunity of hearing and to consider the supporting records and documents before passing a reasoned order.
The case arose from proceedings initiated pursuant to a show cause notice dated December 22, 2023, issued under Section 73 of the GST Acts.
Following the show cause notice, the Assistant Commissioner of State Tax, Barbil Circle, passed an order on April 29, 2024. The petitioner subsequently challenged the order by filing an appeal under Section 107 of the GST Act.
However, the appeal was rejected on July 17, 2025, on the ground that it had been filed beyond the prescribed limitation period.
The petitioner thereafter pursued another statutory remedy by filing an application for rectification of the original order on May 14, 2024 under Section 161 of the GST Act.
The principal grievance before the High Court was that the petitioner was never communicated with the order rejecting its rectification application.
According to the petitioner, while pursuing the rectification application, it discovered that the application had already been rejected. The petitioner then obtained certified copies of the order-sheets maintained in the case.
Those records revealed that Order recorded the proceedings concerning the rectification application. However, the petitioner contended that the rejection order under Section 161 had never actually been communicated to it.
The issue assumed greater significance because the petitioner maintained that the absence of communication prevented it from taking appropriate legal steps against the rejection.
The record before the High Court contained a further anomaly.
The rejection order stated that the rectification application had been rejected for safeguarding Government revenue. It also recorded that the rejection order could not be generated through the Back Office of the GSTN portal because of a technical problem.
The order ultimately bore the handwritten signature of the Assistant Commissioner of State Tax.
The petitioner argued that the record was internally inconsistent. While the order-sheet dated May 30, 2024 indicated that the rejection could not be generated through the portal because of technical glitches, the copy of the rejection order placed on record was shown as having been signed on May 30, 2025—almost a year later.
The petitioner therefore questioned the validity and provenance of the rejection order.
During the hearing, the State’s Standing Counsel did not dispute the certified copies of the order-sheets relied upon by the petitioner.
The High Court examined the material and found that the order-sheet dated May 30, 2024 recorded that the rejection order could not be generated through the portal because of technical glitches. At the same time, the concluding portion of the rejection order placed before the Court showed that the Assistant Commissioner had signed it on May 30, 2025.
The discrepancy was therefore not merely a procedural technicality. It went to the reliability of the record concerning the rectification proceedings and the manner in which the taxpayer’s statutory application had been dealt with.
Taking note of these circumstances, the Division Bench held that the impugned order could not be sustained.
The Court specifically quashed and set aside the order dated May 30, 2025 passed by the Assistant Commissioner of State Tax, CT & GST Circle, Barbil, rejecting the petitioner’s rectification application under Section 161 of the GST Act.
The Court thereafter remanded the matter to the same authority for fresh consideration.
The High Court directed the Assistant Commissioner to reconsider the rectification application dated May 14, 2024 after taking into account the grounds raised by the petitioner and the supporting documents and records available on the GST portal or otherwise produced before the authority.
Importantly, the Court noted that the petitioner had not been afforded an adequate opportunity to present its case during the original proceedings under Section 73 of the GST Act.
The petitioner has been directed to appear before the Assistant Commissioner within 15 working days from receipt of the High Court’s order. The authority will thereafter hear the petitioner on the date or dates considered appropriate. The Court also directed the petitioner to cooperate with the proceedings and not seek unnecessary adjournments.
The Court further directed the GST authority to consider the petitioner’s explanation along with the records and documents produced in support of its claim.
After such consideration, the authority has been directed to pass an appropriate reasoned order, rectifying the earlier order if warranted under Section 161 of the GST Act, and to communicate the decision to the petitioner forthwith.
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