Rectification Must Be Heard if Order Goes Against Party | HC
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- Last Updated on 28 August, 2025
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Case Details: Mark Agencies vs. Department of Trade and Taxes - [2025] 177 taxmann.com 497 (Delhi)
Judiciary and Counsel Details
- Pratibha M. Singh & Shail Jain, JJ.
- Jayant Kumar & Ms Hemlata Rawat, Advs. for the Petitioner
- Ms Vaishali Gupta, Adv. for the Respondent
Facts of the Case
The petitioner-assessee was issued a show cause notice under GST raising demand on multiple counts. A reply was filed by the assessee, but an order was subsequently passed confirming the demand. Thereafter, the assessee filed a rectification application under Section 161, which was rejected by the authority through the impugned order. The assessee contended that under the statutory framework, and particularly in terms of the third proviso to Section 161, principles of natural justice are required to be observed before passing an order adverse to the assessee. The assessee submitted that no opportunity of hearing had been provided before rejecting the rectification application. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the rejection of the rectification application without affording a hearing to the assessee was contrary to the mandate of Section 161. It observed that the third proviso to Section 161 expressly incorporates the requirement of following principles of natural justice, particularly when an order entails adverse consequences. The Court held that denial of hearing rendered the impugned order unsustainable in law. Accordingly, the order rejecting the rectification application was set aside, and the matter was remanded to the adjudicating authority to decide the rectification application afresh after providing an opportunity of hearing.
List of Cases Reviewed
- HVR Solar Private Limited v. Sales Tax Officer Class II AVATO [2025] 173 taxmann.com 526/98 GSTL 131 (Delhi) (para 11). followed
List of Cases Referred to
- HVR Solar Private Limited v. Sales Tax Officer Class II AVATO [2025] 173 taxmann.com 526/98 GSTL 131 (Delhi) (para 11).
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