The Orissa High Court in the case of Orissa Stevedores Ltd. vs. Deputy Commissioner of CT and GST vide W.P.(C) No. 13696 of 2024 dated 07.08.2024, noted  noted that the impugned order rejecting the rectification did not disclose any reasons for the rejection. Under Section 161 of the CGST Act, 2017, if rectification adversely affects any person, the affected party is required to be provided an opportunity of hearing. Since the petitioner argued that the original order adversely affected them, the third proviso to Section 161 applied, and the petitioner should have been given a hearing.  Impugned order rejecting the rectification application set aside, and directed the authority to deal with the rectification application on restoration in accordance with the law.

Facts of the Case: The petitioner applied for rectification of an order dated 30th December 2023 under Section 161 of the Odisha Goods and Services Tax (OGST) Act, 2017. The rectification application was rejected on 8th April 2024 without providing the petitioner an opportunity of hearing. The rejection cited no error apparent on the face of the record. The petitioner argued that it should have been given a hearing before the application was rejected.

The department contended that no hearing was necessary as there was no mandate under the law for such an application, especially since the rejection was not adverse to the petitioner.

Held that:  The court reviewed the impugned order and observed that it did not disclose any reason for rejecting the rectification application. The court noted that Section 161 of the OGST Act allows an assessee to apply for rectification within the prescribed time. While the third proviso to Section 161 states that a hearing is required only if the rectification adversely affects the assessee (such as in cases of enhancement), the court emphasized that the statute provides for rectification when the assessee feels affected by the initial order.

The court set aside the impugned order, observing that the authority failed to provide a reasoned decision for rejecting the rectification application. Directed the authority to reconsider the rectification application in accordance with the law, implying that the petitioner must be given a fair opportunity for redressal.

To read the complete judgment 2024 Taxo.online 2099