The Delhi High Court has upheld a GST officer’s corrigendum correcting a portal-generated order that stated proceedings had been dropped, even though the speaking order attached to it had confirmed a demand on one of four issues.
The bench of Justices Anil Kshetarpal and Shail Jain has observed 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 corrigendum corrected an apparent contradiction rather than creating a fresh demand.
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The show cause notice raised four issues: reconciliation of outward supplies reported in GSTR-9, differences between GSTR-1 and GSTR-9, eligibility of input tax credit, and ITC claimed on transactions with suppliers whose registrations had been cancelled or who had defaulted in filing returns or paying tax. After considering the taxpayer’s reply, the officer issued a digitally signed portal order on April 13, 2024, titled “Order for dropping the proceedings under section 73/74”. It stated that the proceedings were dropped for the reasons and details in the attached annexure.
That annexure told a different story on the fourth issue. It rejected ITC claimed on transactions with Sai Traders and Jain Cement Udyog and quantified tax, interest and penalty totalling ₹71,42,956 under the CGST and SGST heads. It also directed payment within one month and referred to recovery proceedings in the event of non-payment. On May 28, 2024, the officer issued a corrigendum explaining that the portal order had been generated by selecting the wrong option: proceedings had been dropped on three issues, while the demand on the fourth had been confirmed.
The taxpayer approached the High Court seeking implementation of the portal order as an unconditional closure of the proceedings. He argued that its digital signature should prevail over the annexure, which lacked a separate physical or digital signature. He also contended that a corrigendum could not revive a demand after the adjudication deadline, and said that the prescribed demand summary in Form GST DRC-07 had not been made available on the portal.
The court rejected the attempt to read the portal order in isolation. Its operative text expressly referred to the annexure, which contained reasons for rejecting the taxpayer’s explanation and quantified the liability. The two documents therefore disclosed an internal contradiction; together, they did not establish that the taxpayer had succeeded on all four issues. The court accepted that the annexure accompanied the original order, noting both the taxpayer’s production of the documents together and the department’s statement on affidavit that they were uploaded together on April 13.
The bench also rejected the separate-signature objection. The digitally signed portal order identified the issuing officer and adopted the reasons and details in the annexure. In those circumstances, the annexure formed part of the authenticated order rather than an independent, unsigned adjudication order. The court distinguished Marg ERP Limited, on which the taxpayer relied, because the order in that case was concededly unsigned.
On rectification, the court said Section 161 permits an authority to correct an error apparent on the face of the record, but cannot be used to reconsider the merits or make an adjudication that was never made earlier. Here, the error was visible in the original composite order: the portal recital dropped the proceedings, while its incorporated annexure confirmed a demand on the fourth issue. The corrigendum preserved relief on the other three issues and repeated the existing findings and amounts. It did not add reasons or increase the demand.
The court noted that the record did not show a further hearing before the corrigendum was issued. It held that the rectification did not adversely change the taxpayer’s position under the original composite order, which had already quantified the disputed liability. The proviso to Section 161 requiring observance of natural justice for an adverse rectification was therefore not attracted on these facts.
The corrigendum was issued 45 days after the original order, within the period prescribed by Section 161. Its issuance after the asserted April 30, 2024 adjudication deadline did not invalidate it, because it was a rectification rather than a fresh adjudication. The taxpayer also raised, in a rejoinder, a challenge concerning Notification No. 56/2023-Central Tax and an earlier limitation date. The court declined to examine the notification’s validity in this petition, while leaving any surviving limitation objection within the appellate authority’s jurisdiction open.
The bench kept the validity of the adjudication distinct from the availability of its statutory summaries. It could not conclusively determine from the record whether DRC-07 was currently available to the taxpayer, but directed the department to make it available if it had not already done so. The corresponding rectification summary in Form GST DRC-08 must likewise be uploaded and made available if absent.
The department has been directed to furnish certified copies of the April 13 order, its annexure and the May 28 corrigendum within two weeks of the judgment, along with any additional document on which it proposes to rely. The taxpayer may file an appeal under Section 107 within four weeks from the later of receiving those documents and obtaining access to the applicable statutory summaries. If the appeal is filed within that period with the required pre-deposit, it must be heard on its merits without rejection on limitation grounds.
The appellate authority must independently examine the merits of the disputed ITC demand and any surviving limitation issue within its jurisdiction. Recovery is to remain in abeyance until the appeal-filing period expires; if an appeal is filed in time with the statutory pre-deposit, further recovery will be governed by Section 107(7). The High Court dismissed the writ petition subject to these directions.
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