Facts of the Case

The petitioners challenged an assessment order dated 04.03.2022 passed under Section 73 of the Gujarat Goods and Services Tax Act, 2017 (GGST Act) on the ground that the adjudicating authority had passed the order without granting them an opportunity of being heard. The petitioners also pointed out that there was a substantial calculation error in determining their GST liability and had already submitted a rectification application dated 20.04.2022 before the concerned authority.

During the pendency of the writ petition, the High Court had issued notice while observing that the grievance regarding tax calculation required consideration by the authority. At the final hearing, both parties agreed regarding the correct tax computation. However, the respondents informed the Court that the rectification order could not be uploaded on the GST portal due to technical limitations.

 

Issues Involved

  1. Whether an order passed under Section 73 of the GGST Act without granting an opportunity of personal hearing violates Section 75(4) of the Act.
  2. Whether a genuine tax calculation error can be rectified when both parties agree on the correct tax liability.
  3. Whether manual payment and manual rectification are permissible where the GST portal does not facilitate online rectification.

 

Petitioner’s Arguments

  • The assessment order under Section 73 was passed without providing any opportunity of hearing, contrary to the mandatory requirement under Section 75(4) of the GGST Act.
  • The petitioners had already filed a rectification application dated 20.04.2022, highlighting an error in the computation of GST liability.
  • The calculation mistake directly affected the merits of the assessment order and required correction.
  • Since the tax demand itself was based on an incorrect computation, the assessment deserved reconsideration and rectification.

 

Respondent’s Arguments

  • During the final hearing, the respondents accepted the revised tax calculation and agreed with the corrected tax liability.
  • However, due to technical limitations of the GST portal, the rectification order could not be uploaded electronically.
  • The respondents sought permission to complete the rectification manually so that the petitioner could discharge the revised tax liability accordingly.

 

Court Order / Findings

The Gujarat High Court observed that both parties had reached a consensus regarding the correct computation of taxes.

Accordingly, the Court directed:

  • For Assessment Year 2018-19, the petitioner shall pay ₹1,50,000 manually.
  • The GST authorities shall issue the manual rectification order and make it available electronically within two weeks.
  • After the rectification order is made available, the petitioner shall make the payment within one week.
  • The writ petition was accordingly disposed of.

 

Important Clarification

  • Section 75(4) of the GST Act mandates that an opportunity of hearing must be granted where an adverse order is proposed against a taxpayer.
  • Genuine computational or mathematical errors affecting tax liability deserve appropriate rectification.
  • Technical deficiencies of the GST portal cannot prevent authorities from granting lawful relief.
  • Courts may permit manual rectification and manual payment where the electronic system does not support necessary corrections.
  • Administrative and technological limitations cannot override substantive justice under GST law.

 

Sections Involved

  • Section 73 – Determination of tax not paid, short paid, erroneously refunded or wrongly availed/utilized without fraud or wilful misstatement.
  • Section 75(4) – Mandatory opportunity of hearing before passing an adverse adjudication order.
  • Relevant provisions of the Gujarat Goods and Services Tax Act, 2017.


Link to Download the Order https://www.mytaxexpert.co.in/uploads/1782891837_61.pdf

 

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