Facts of the Case:

In this case, the petitioner challenged the action of the GST Officer, Ward-109, Delhi, seeking implementation of the portal-generated order dated 13.04.2024, which appeared to record that proceedings under Section 73 of the CGST Act for FY 2018-19 had been dropped. However, the Annexure forming part of the same order rejected the Petitioner’s explanation on one of the four issues raised in the SCN and confirmed a demand of tax, interest and penalty aggregating to ₹71,42,956.

The Department explained that an incorrect option had inadvertently been selected while generating the order on the GST portal. The Annexure, which was uploaded along with the portal order, actually contained the adjudication on the fourth issue and quantified the demand. Consequently, a Corrigendum dated 28.05.2024 clarified that proceedings had been dropped on three issues, while the demand relating to the fourth issue survived. The Petitioner challenged the Corrigendum, contending that the digitally signed portal order had conclusively dropped the proceedings and that an unsigned Annexure could not sustain a demand.

Issue:

Whether the digitally signed portal order recording that the proceedings were dropped prevailed over the accompanying Annexure which confirmed a demand, and whether the subsequent Corrigendum dated 28.05.2024 validly rectified the inconsistency under Section 161 of the CGST Act, without constituting a fresh adjudication or creating a new demand.

Held That:

The Delhi High Court held that the digitally signed order dated 13.04.2024 could not be read in isolation from the Annexure forming an integral part of that order. Although the portal-generated portion stated that the proceedings were dropped, the accompanying Annexure specifically rejected the petitioner’s explanation in respect of the fourth issue relating to ITC availed from M/s Sai Traders and M/s Jain Cement Udyog and quantified the corresponding tax, interest and penalty. Since the digitally signed order expressly incorporated the Annexure, the Court held that the two documents had to be read together. The Annexure could not be treated as an independent, unsigned order merely because it bore “Sd/-” rather than a separate digital signature. The Court distinguished Marg ERP Ltd., where the adjudication order itself was admittedly unsigned.

The Court further held that the Corrigendum dated 28.05.2024 was a permissible rectification under Section 161 of the CGST Act. The corrigendum did not constitute a fresh adjudication, introduce a new demand or alter the reasoning contained in the original order. It merely corrected the apparent inconsistency between the portal portion of the order and its Annexure by clarifying that the proceedings stood dropped on three issues while the demand relating to the fourth issue continued. Since the liability on the fourth issue had already been determined in the original order, the corrigendum only brought the electronic summary in conformity with the adjudication already undertaken.

The Court rejected the contention that a fresh opportunity of hearing was mandatory before issuance of the corrigendum. The third proviso to Section 161 requiring natural justice safeguards applies where rectification adversely affects the person concerned. In the present case, the petitioner’s liability on the fourth issue was already part of the original adjudication; the corrigendum did not impose any additional liability or otherwise worsen the petitioner’s position. Hence, there was no fresh adverse determination requiring another hearing.

On limitation, the Court held that the validity of the corrigendum was not dependent upon the original adjudication period. Since the corrigendum was issued in exercise of the rectification power under Section 161, the six-month period prescribed therein was relevant. The corrigendum dated 28.05.2024, having been issued within six months of the original order dated 13.04.2024, could not be invalidated merely because the statutory period for passing the original adjudication order had subsequently expired.

The Court also distinguished the adjudication order from the DRC-07 summary. DRC-07 is only a summary of the determination and does not itself constitute the adjudication. However, the Department is required to make the DRC-07 available within a reasonable time because its absence can prevent the taxpayer from effectively exercising the statutory right of appeal and may impede recovery proceedings. Accordingly, the Court directed the Department to furnish the certified order and relevant documents and, if necessary, upload the DRC-07 and the corresponding DRC-08 reflecting the rectification.

The Court ultimately left the merits of the fourth-issue ITC demand and the surviving limitation objection open for consideration by the appellate authority under Section 107. The petitioner was granted an opportunity to file the appeal within four weeks from the later of communication of the requisite documents or availability of the statutory summaries. Subject to payment of the prescribed pre-deposit, the appeal was directed to be entertained without rejecting it on limitation. Recovery was kept in abeyance during the period available for filing the appeal.

Case Name: KAPIL RAJ ANAND vs GST OFFICER, WARD 109, DELHI dated 08.09.2026

Citation No. 2026 Taxo.online 2849