Delhi High Court Upholds Corrigendum Correcting GST Portal Order That Showed Proceedings Dropped

The Delhi High Court has upheld a corrigendum issued by a GST officer to correct an inadvertent error on the GST portal, where the portal-generated order showed that proceedings against a taxpayer had been dropped even though the accompanying adjudication order had confirmed a tax, interest and penalty demand.

The Division Bench of Justices Anil Kshetarpal and Shail Jain held that the corrigendum merely corrected an inconsistent recital in the original order and did not create a fresh demand.

The demand against Petitioner concerned proceedings for the financial year 2018-19 under Section 73 of the Central Goods and Services Tax Act, 2017.

The show cause notice raised four issues, including reconciliation of outward supplies, discrepancies between GSTR-1 and GSTR-9, eligibility of Input Tax Credit (ITC), and ITC claimed in transactions involving suppliers whose registrations had been cancelled or who had defaulted in filing returns or paying tax.

On April 13, 2024, the GST portal generated an order titled “Order for dropping the proceedings under section 73/74”. Its operative portion stated that the proceedings were dropped for the reasons contained in the accompanying annexure.

The annexure, however, rejected the Petitioner's explanation on the fourth issue, held the ITC inadmissible and quantified tax of ₹17,00,704, an equal amount of interest and penalty of ₹1,70,070 under each of the CGST and SGST heads, aggregating to ₹71,42,956.

The Department attributed the discrepancy to an incorrect selection made while generating the order on the GST portal. It subsequently issued a corrigendum on May 28, 2024, clarifying that proceedings had been dropped on three issues while the demand on the fourth issue survived.

Petitioner argued that the digitally signed portal order should prevail over the unsigned annexure and that the demand could not subsequently be sustained through a corrigendum.

The High Court noted that the portal order expressly incorporated the annexure and that both had been uploaded together on April 13, 2024.

“In these circumstances, the Annexure cannot be treated as an independent unsigned order requiring separate authentication. It stood incorporated and adopted as part of the digitally authenticated Portal Order. The objection that the demand contained in the Annexure is unenforceable merely for want of a separate signature on that document is, therefore, rejected,” it held.

On the corrigendum, the Court explained that Section 161 of the CGST Act permits rectification of an error apparent on the face of the record, but cannot be used to reconsider the merits or create an adjudication that had not previously been made.

In the present case however, the Court said, original annexure had itself rejected Petitioner's case on the fourth issue and quantified the liability. Thus, the contradiction between the portal recital and the annexure was apparent from the original order itself.

“The Corrigendum neither withdraws any relief granted by that order nor enlarges the demand. It merely corrects the inconsistent portal statement. The rectification therefore did not adversely alter the Petitioner's position under the original adjudication so as to attract the third proviso to Section 161 of the CGST Act,” it added.

For Petitioner: Advocates Rajesh Mahna, Ramanand Roy and Mayank Kouts

For Respondent: Vaishali Gupta