Facts of the Case:
In this case, the petitioner challenged order passed under Section 73 of the GST Act and the subsequent order dated 26.08.2025, whereby the petitioner’s rectification application dated 27.05.2025 was rejected. The petitioner contended that for the same period, an earlier order dated 03.02.2025 covering FY 2017–18 to 2021–22 had already determined a demand towards excess Input Tax Credit (ITC) availed in GSTR-3B vis-à-vis GSTR-2A amounting to ₹1,08,39,873.
It was alleged that the impugned order dated 27.02.2025 again included the same issue and amount, showing duplication of demand. Despite bringing this to the authority’s notice through a rectification application under Section 161, the same was rejected by order dated 26.08.2025.
The respondent argued that the adjudication order dated 27.02.2025 was detailed and did not warrant rectification, and that the petitioner could avail the appellate remedy under Section 107 of the GST Act.
Issue:
Whether rejection of rectification under Section 161 of the GST Act was valid when there was a prima facie duplication of tax demand for the same period in two separate orders.
Held that:
The Court observed that a prima facie duplication of demand existed, as both orders—dated 03.02.2025 and 27.02.2025—appeared to address the same issue of excess ITC reflected in GSTR-3B over GSTR-2A. It was held that this aspect ought to have been examined by the authority under Section 161, particularly when a specific rectification request was made. The rejection of rectification without such examination was not sustainable.
Accordingly, the Court set aside the order rejecting the rectification application, remitting the matter back to the respondent authority for fresh consideration in accordance with law; and directed that, if an adverse order is passed upon reconsideration, the petitioner shall be entitled to file a consolidated appeal within 30 days.
Where a taxpayer demonstrates duplication of demand across two adjudication orders for the same period and issue, the proper officer is duty-bound to examine the claim under Section 161. The rectification mechanism must be exercised to correct such apparent errors rather than compelling the assessee to seek appellate relief.
Case Name: M/s. Nabati Food (India) Private Limited, Represented by its Managing Director Mr. Justin Samuel Versus The Assistant Commissioner of Central Tax & Central Excise, Audit I, Chennai, The Assistant Commissioner of GST & Central Excise, Chennai dated 06.11.2025
To read the complete judgement 2025 Taxo.online 2901
