Rectification application rejected due to non-cooperation by assessee during assessment

The Hon'ble Madras High Court in Seoyon E-Hwa Summit Automotive India (P.) Ltd. v. Deputy Commissioner (ST)-I [W.P. Nos. 16535 & 16538 of 2023 dated June 6, 2023] held that rejection of rectification application filed under section 161 of the Central Goods and Services Tax Act, 2017 ("the CGST Act") is justified as the assessee has not cooperated with the Assessing Officer during the assessment.

Facts

Seoyon E-Hwa Summit Automotive India (P.) Ltd. ("the Petitioner") was issued various noticesincludingASMT-10, Form GST DRC-01A and a Show Cause Notice ("the SCN") datedDecember 6, 2021, June 29, 2022 and November 18, 2022 respectively by the Revenue Department, all pertaining to issues related to Input Tax Credit ("ITC"). 

The revenue department contended that the Petitioner was given sufficient opportunities prior to finalisation of assessment to justify its claim of ITC, and the SCN has clearly set out the claim of ITC calling upon the Petitioner to furnish the details of ITC category wise/tax type wise and to explain the variations that he has noticed and the Petitioner has not cooperated in the proceedings for assessment.

The Petitioner responded to the notices furnish the break-up of the ITC claimed under GSTR 3B as sought for by the officer and attempt to reconcile its claim of ITC in the GSTR 3B return with the ITC reflected in GSTR 2A and GSTR 9 as GSTR 2A is auto populated based on the input set out in GSTR 9, which is filed by the supplier.

The Petitioner filed an application under Section 161 of the CGST Act seeking rectification of errors allegedly apparent on record.

Issue

Whether the Petitioner can file rectification application even in case where he has not co-operated with Assessing officer for assessment? 

Held

The Hon'ble Madras High Court in W.P. Nos. 16535 & 16538 of 2023 held as under:

• Observed that, the revenue department enumerates various opportunities to the Petitioner to supply the break-up of the ITC claimed and the reconciliation and notes non-compliance with those directions and the Petitioner had not cooperated in proceedings for assessment leaving the revenue department no choice but to complete assessment on basis of available materials and without any explanations for his benefit.
• Held that, it is not for the Petitioner who has not made even a solitary attempt to cooperate or assist in the assessment proceedings to lay the blame at the doorstep of the revenue.
• Writ Petitions are dismissed.

Relevant Provision

Section 161 of the CGST Act

"Rectification of errors apparent on the face of record

161. Without prejudice to the provisions of section 160, and notwithstanding anything contained in any other provisions of this Act, any authority, who has passed or issued any decision or order or notice or certificate or any other document, may rectify any error which is apparent on the face of record in such decision or order or notice or certificate or any other document, either on its own motion or where such error is brought to its notice by any officer appointed under this Act or an officer appointed under the State Goods and Services Tax Act or an officer appointed under the Union Territory Goods and Services Tax Act or by the affected person within a period of three months from the date of issue of such decision or order or notice or certificate or any other document, as the case may be:

Provided that no such rectification shall be done after a period of six months from the date of issue of such decision or order or notice or certificate or any other document:

Provided further that the said period of six months shall not apply in such cases where the rectification is purely in the nature of correction of a clerical or arithmetical error, arising from any accidental slip or omission:

Provided also that where such rectification adversely affects any person, the principles of natural justice shall be followed by the authority carrying out such rectification."