The Allahabad High Court has held that a discrepancy between a detailed GST adjudication order and the consequential demand summary in Form GST DRC-07 constitutes an error apparent on the face of the record that can be corrected under Section 161 of the Central Goods and Services Tax Act, 2017. 

The bench of Justice Saumitra Dayal Singh and Justice Swarupama Chaturvedi has observed that the six-month restriction on rectification does not apply where the correction concerns a purely clerical or arithmetical error arising from an accidental slip or omission.

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The bench set aside the order rejecting rectification and its accompanying summary, and directed the adjudicating authority to reconsider the matter in light of its observations.

The company had challenged an order dated September 10, 2026, passed under Section 161, along with its summary dated September 11, 2026. It had also sought the quashing of the ex parte order-in-original dated November 10, 2023, and Form GST DRC-07 dated December 11, 2023.

The rectification application, filed on May 21, 2026, sought a limited correction of the demand summary. According to the company, an arithmetical mistake in Form GST DRC-07 had resulted in an excess tax demand of ₹3,17,414, and correcting the mistake would reduce the demand by that amount.

During an earlier hearing, the Court had recorded the company’s submission that its application was within limitation because the second proviso to Section 161 exempts specified clerical and arithmetical corrections from the six-month restriction. The Court had asked counsel for the Revenue to obtain clear written instructions on the applicability of that proviso.

At the subsequent hearing, no contrary fact was pointed out. The bench concluded that the company’s claim fell within the scope of the statutory exception.

The second proviso to Section 161 provides that the six-month period does not apply where rectification is purely in the nature of correcting a clerical or arithmetical error arising from an accidental slip or omission. Applying that provision, the Court found that the correction sought by the company could be considered under the rectification mechanism despite the time elapsed since issuance of the demand summary.

The adjudicating authority had rejected the application on the ground that the company had not identified a specific clerical or arithmetical mistake, such as incorrect totalling, a transcription error, an accidental omission of a figure, or another patent mistake capable of correction by reference to undisputed records.

The authority had characterised the company’s grievance as an alleged discrepancy between the operative portion of the order-in-original and the consequential Form GST DRC-07. It nevertheless concluded that the company had failed to establish any obvious, self-evident and undisputed error that could be rectified under Section 161.

The High Court found this reasoning erroneous in the facts of the case. It explained that once a discrepancy between the operative portion of the detailed order and the consequential demand summary had been noted, that discrepancy fell within the description of an error apparent on the face of the record.

The bench examined the amounts recorded in the detailed adjudication order. That order confirmed tax of ₹3,17,414 and a penalty of ₹47,612 under Section 74(5). It also recorded a demand of ₹3,25,972 towards wrongful availment of transitional credit, an equal penalty of ₹3,25,972, and interest of ₹57,878.

In contrast, Form GST DRC-07 reflected a tax demand of ₹6,43,386.

The decisive issue was that the detailed order also recorded adjustment of the tax amount of ₹3,17,414 against deposits of ₹3,14,745 and ₹2,992 made by the company. The Court held that, to the extent the tax had been described as adjusted against those deposits, the corresponding amounts should not have been included in Form GST DRC-07.

The ruling therefore addresses the consistency required between a detailed GST adjudication order and its consequential demand summary. On the facts before the Court, the summary could not include tax that the underlying order itself recorded as adjusted against payments.

Allowing the petition, the bench specifically set aside the rectification rejection order dated September 10, 2026, and its summary dated September 11, 2026. It remitted the matter to the adjudicating authority to pass a fresh order under Section 161, keeping the Court’s observations in mind, and directed that the exercise be completed within one month.

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