Facts of the Case: M/s Doon Iron Store challenged an assessment order dated 14.02.2025 and a consequent recovery citation dated 27.09.2025 issued by the Deputy Commissioner, State Tax, Dehradun, before the Uttarakhand High Court. The petitioner's case was that a discrepancy had arisen because certain GSTR-3B entries and tax already paid under the reverse charge mechanism, though correctly reflected in its GSTR-3B returns, had not been captured while computing the demand — resulting in a tax demand that exceeded even the taxable value of the petitioner's turnover for the period.

Issues Involved:

  1. Whether the discrepancy arising from non-capturing of GSTR-3B entries and reverse-charge tax payments warrants a direction for reconsideration under Section 161 of the GST Act.
  2. Whether such rectification can be pursued without being defeated by the limitation prescribed under the first proviso to Section 161.

Petitioner's Arguments:

  • The tax demand raised was arithmetically impossible, being higher than the value of taxable turnover, on account of the authorities' failure to account for GSTR-3B entries and RCM tax already paid.
  • A direction ought to be issued permitting the petitioner to seek rectification of this apparent error under Section 161 of the GST Act.

Respondent's Arguments:

  • The State's counsel fairly submitted that, in the event of a miscalculation or arithmetical error caused by an additional numerical figure being introduced, the Department was always open to reconsidering the matter, and had no objection to the matter being remitted.

Court Order / Findings:

  • In view of the State's fair concession, the Court granted the petitioner liberty to file an application under the second proviso to Section 161 of the GST Act, 2017.
  • Such an application, if made within two weeks, was directed to be considered without reference to the limitation imposed under the first proviso to Section 161, and disposed of on merits by the Assessing Officer.
  • Till disposal of the rectification application, the Court restrained the Department from taking any coercive action against the petitioner.

Important Clarification:

  • Where a demand arises purely from a computational error — such as the omission of GSTR-3B entries or reverse-charge tax already discharged — the second proviso to Section 161 permits rectification of such patent errors without being time-barred by the general limitation under the first proviso, particularly where the Department itself concedes the possibility of an arithmetical mistake.

Sections Involved:

  • Section 161, CGST/SGST Act, 2017 — rectification of errors apparent on the face of record, including its second proviso permitting rectification beyond the ordinary limitation in specified circumstances.

Decision – In Favour of: Assessee.

Case Details: High Court of Uttarakhand at Nainital; Writ Petition (M/B) No. 981 of 2025; Neutral Citation 2025:UHC:10524-DB; Coram: Hon'ble The Chief Justice Sri G. Narendar and Hon'ble Sri Justice Subhash Upadhyay; Date of Judgment: 26th November, 2025.

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