Dismissal of Rectification Application under GST Law: No
Personal Hearing Required - Eminent Textiles Mills Pvt. Ltd. v. State Tax
Officer & Others
Summary of
the Case
The Madras High Court
held that no opportunity of personal hearing is required when a
rectification application under Section 161 of the GST Act is rejected, as
there is no "rectification" that adversely affects the applicant.
Dismissing the writ appeal filed by M/s. Eminent Textiles Mills Pvt. Ltd., the
Court upheld the single judge’s decision and clarified that the principles
of natural justice are not automatically triggered when the rectification is
refused.
· M/s.
Eminent Textiles Mills Pvt. Ltd. v. State Tax Officer & Others
·
Court:
Madurai Bench of Madras High Court
·
Order No.:
W.A(MD) No.1821 of 2025
·
Date of Order:
14.07.2025
Brief Facts
of the Case
- The appellant is a registered
taxpayer engaged in manufacturing cotton textiles.
- A GST audit under Section 65
of the TNGST Act, 2017 was conducted for the financial year 2019-20.
- Discrepancies were found; an order
dated 30.08.2024 was passed determining tax, interest, and
penalty of ₹5.96 crore under Sections 9(3), 16(1), 16(2), 39, and 50.
- The petitioner filed a rectification
application on 29.11.2024 under Section 161 of the TNGST Act.
- The rectification application was rejected
on 21.01.2025 without granting a hearing.
- The petitioner filed WP(MD) No. 11150
of 2025, which was dismissed by the Single Judge on 23.04.2025.
- Hence, the present writ appeal was
filed against the order of the learned Single Judge.
Submissions
by the Petitioner
Counsel: Mr. S.
Renganathan
- Argued that Section 161 mandates
adherence to principles of natural justice when an adverse order is
passed.
- Cited judicial precedents:
- Suriya Cement Agency v. State Tax
Officer [2024 (12) TMI 57] – held that adverse
decisions on rectification must follow due process.
- HVR Solar Pvt. Ltd. v. Sales Tax
Officer [2025 SCC OnLine Del 2300]
- Pinstar Automotive India Pvt. Ltd.
v. Commissioner of GST [2023 (3) TMI
1168]
- Emphasized that the rejection of
rectification application is an adverse decision, and hence, a hearing
was mandatory.
Submissions
by the Respondents
Counsel: Mr. R.
Sureshkumar, Additional Government Pleader
- Supported the decision of the Single
Judge.
- Asserted that Section 161’s third
proviso applies only when actual rectification is carried out, not
when the application is dismissed without any change to the order.
- Dismissal of rectification request does
not amount to "rectification"; therefore, no hearing is
required.
Court's
View and Reasoning
Key Points from the
Judgment:
- Rectification under Section 161
refers to actual alteration or correction of an existing order.
- The third proviso to Section 161
only applies when such rectification "adversely affects any
person".
- In this case, no rectification was
carried out — the application was rejected, and the original order
remained untouched.
- Therefore, the requirement for
personal hearing does not arise.
- The Court distinguished between:
- Refusal to rectify
(which leaves the order unchanged)
- Rectification that affects a party
(which mandates natural justice)
- The Court disagreed with the earlier
interpretations (in Suriya Cement Agency, HVR Solar, and Pinstar
Automotive), holding that:
“Refusal to rectify”
cannot be read into the expression “such rectification”.
Final
Judgment
- Writ Appeal Dismissed.
- The order of the learned Single
Judge was confirmed.
- The appellant was granted two more
weeks from the date of judgment (14.07.2025) to file a statutory
appeal against the original assessment order.
- The appellate authority was directed
to entertain the appeal without reference to limitation, if filed
within the extended time.
Conclusion
This decision affirms
that a personal hearing is not required for rejection of rectification
applications under Section 161 of the GST Act, as such rejection does not
amount to "rectification". It sets a clear precedent limiting the
scope of natural justice under this provision and emphasizes the strict
interpretation of statutory language.
Businesses challenging
adverse GST orders through rectification must now consider filing appeals
instead, especially where no clerical or apparent error exists.
Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.
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