The Uttarakhand High Court has ruled that a GST rectification application filed within the prescribed limitation period cannot be rejected merely because the competent authority failed to decide it within three months.
The Bench of Justice Manoj Kumar Tiwari and Justice Siddhartha Sah observed that the three-month timeline under Notification No. 22/2024-Central Tax dated October 8, 2024, is directory in nature. The expiry of that period does not render the adjudicating authority functus officio or extinguish its power to decide the rectification application on merits.
Buy Now: E-Magazine: 1000+ Landmark GST Judgments (2017–2026)
The bench quashed the order passed by the Assistant Commissioner, Central Goods and Services Tax Division, Rudrapur, rejecting the taxpayer’s rectification application as time-barred. The matter was remitted to the Assistant Commissioner with a direction to decide the application on merits within three months.
The petitioner had applied for rectification of an Order-in-Original dated August 29, 2024, passed by the Assistant Commissioner, CGST Division, Rudrapur.
The Order-in-Original was uploaded on the GST portal on August 30, 2024. The petitioner submitted the rectification application on January 17, 2025, within the time permitted under Notification No. 22/2024-Central Tax.
Since the authority did not decide the application for a considerable period, the petitioner approached the High Court by filing an earlier writ petition. On May 5, 2026, a coordinate Bench disposed of that petition by directing the competent authority to decide the rectification application within eight weeks from the date on which a certified copy of the order was presented.
Following the High Court’s direction, the Assistant Commissioner passed an order on June 30, 2026, but rejected the rectification application without considering its grounds on merits.
The Assistant Commissioner referred to Section 161 of the Central Goods and Services Tax Act, 2017, and concluded that the rectification order ought to have been passed within three months from the date of issuance of the original order.
The authority noted that the Order-in-Original was uploaded on August 30, 2024, and reasoned that the rectification order should have been passed by November 30, 2024. It further referred to the six-month period under Section 161 and observed that rectification could not have been undertaken beyond February 28, 2025.
The Assistant Commissioner also concluded that, under Notification No. 22/2024-Central Tax, the last date for deciding the petitioner’s application was April 17, 2025.
According to the rejection order, the officer presently holding the jurisdictional post had joined only on May 26, 2025, by which time the period for passing the rectification order had already expired. The authority also recorded that, owing to issues with the back-office portal, the rectification application was not visible to the concerned officer.
On this basis, the Assistant Commissioner held that rectification could no longer be undertaken under Section 161 or the notification and disposed of the application without examining the grounds raised by the petitioner.
The petitioner challenged the rejection order before the High Court, contending that the authority had incorrectly treated the three-month period as an absolute limitation on its power.
Rohit Arora, Counsel for the petitioner argued that Clause 4 of Notification No. 22/2024-Central Tax did not provide that an application would become incapable of being decided after three months. The provision only stated that the authority should, “as far as possible,” decide the application within three months from the date on which it was filed.
It was further submitted that the Assistant Commissioner had expressly admitted in the rejection order that the rectification application was filed within the prescribed time. Consequently, the application could not be rejected merely because the department failed to decide it within three months.
The petitioner also argued that the rejection order was contrary to the High Court’s earlier direction requiring the competent authority to decide the rectification application on merits.
The High Court held that the competent authority could not refuse to decide a timely rectification application merely because more than three months had elapsed since its filing.
The Bench noted that Clause 4 of the notification undoubtedly fixes a three-month timeline. However, the language used in the provision shows that the timeline is not mandatory.
The expression “as far as possible,” the Court explained, requires the authority to make an endeavour to decide the application within three months. It does not impose an inflexible deadline after which the officer loses jurisdiction over the application.
“Once three months’ period has expired, the competent authority [does not become] functus officio or lose the power to decide the application on merits,” the Court observed.
The delay attributable to the department, including the subsequent officer’s date of joining and the application not appearing on the back-office portal, could therefore not justify denying the petitioner a decision on the merits of a rectification application that had admittedly been filed within time.
The High Court quashed the rejection order and remanded the proceedings to the Assistant Commissioner, CGST Division, Rudrapur. The authority was directed to decide the rectification application on merits within three months.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
