Rectification Application to Be Mandatorily Disposed Within Six Months Under Section 161 of CGST Act

By: Admin | October 21, 2024
Category: Important Pronouncements
Read Time: 4 Minutes

In a key ruling, the Hon’ble Madras High Court in Manu Blue Metals and M. Sand v. State Tax Officer [W.P. No. 16407 of 2024] clarified the obligation of tax authorities to dispose of rectification applications within the prescribed time frame of six months as mandated by Section 161 of the Central Goods and Services Tax Act (CGST Act). The writ petition was filed because the rectification application remained undecided beyond the statutory limit.

Case Background:

The petitioner, Manu Blue Metals and M. Sand, received an assessment order on August 30, 2023, relating to alleged non-payment of tax on seigniorage fees under the reverse charge mechanism (RCM) and an alleged short payment of tax on outward supplies. Following this, the petitioner filed a rectification application under Section 161 of the CGST Act, seeking to rectify errors in the assessment order.

Despite the timely filing, the application was not resolved within the six-month period specified under the CGST Act, prompting the petitioner to approach the court.

Court’s Decision:

The Madras High Court, after considering the petitioner’s grievance, directed the State Tax Department to dispose of the rectification application within three months from the date of the court’s order. The court emphasized that applications under Section 161 must be resolved within six months from the issuance of the relevant order or notice, ensuring timely rectification.

Key Takeaways:

Section 161 of the CGST Act mandates that any rectification application must be filed within three months of the issuance of an order, notice, or any other relevant document.

Authorities must dispose of rectification applications within six months of issuance, unless the error is purely clerical or arithmetical in nature.

The ruling reinforces the need for tax authorities to adhere to statutory timelines to prevent unnecessary delays in resolving disputes.

This judgment reiterates the importance of adhering to statutory provisions for timely redressal of grievances in taxation matters.

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