The Delhi High Court addressed a case involving Kapil Raj Anand and the GST Department concerning proceedings under Section 73 of the CGST Act for the fiscal year 2018-19. The issue arose when the GST portal generated an order indicating that proceedings were dropped, while its annexure rejected Anand's Input Tax Credit (ITC) claims and quantified a tax demand. The Department later clarified this through a corrigendum, stating that three issues were resolved, but the demand on a fourth issue persisted.
Read more: Bombay High Court - Authorities cannot initiate direct recovery based solely on audit findings communicated in Form GST ADT-02 without first issuing a show-cause notice and conducting adjudication [Order attached]
Anand contested the corrigendum, arguing that the digitally signed portal order should take precedence over the unsigned annexure, which he claimed could not uphold the demand. He also raised concerns about the demand being time-barred and lacking the requisite FORM GST DRC-07.
The Court ruled that the portal order and its annexure must be read together, as the order incorporated the annexure's details. It dismissed the argument that the lack of a separate signature on the annexure invalidated the demand, as the annexure was part of the authenticated order. The Court found the corrigendum permissible under Section 161, as it merely corrected the portal's error without introducing new grounds.
The Court did not address the merits of the ITC demand or limitation issues but instructed the Department to provide necessary documents and allowed Anand four weeks to appeal under Section 107 without limitation concerns, suspending recovery during this period.
Order Date - 08 September 2026
Parties: Kapil Raj Anand Vs GST Officer, Ward 109, Delhi
Facts -
- Kapil Raj Anand, for FY 2018-19, faced proceedings under Section 73 of the CGST Act pursuant to an SCN dated 19 December 2023 concerning four GST issues, including GSTR reconciliations and ITC eligibility.
- On 13 April 2024, the GST portal generated an order stating that the proceedings were dropped. However, its attached Annexure rejected the ITC claim relating to M/s Sai Traders and M/s Jain Cement Udyog and quantified tax, interest and penalty of ₹71,42,956.
- The Department stated that the “dropped” option had been selected inadvertently on the portal. It subsequently issued a corrigendum on 28 May 2024 clarifying that the proceedings were dropped on three issues, while the demand on the fourth issue survived.
- Anand challenged the corrigendum, arguing that the digitally signed portal order should prevail, the unsigned Annexure could not sustain the demand, and the demand was also affected by limitation and non-availability of FORM GST DRC-07.
Issue -
- Whether the GST Department could rectify the contradictory portal order through a corrigendum under Section 161 and sustain the ITC-related demand reflected in the original Annexure.
Order -
- The Court held that the portal order could not be read separately from its Annexure because the order expressly incorporated the reasons and details contained in it. The two documents together showed an internal contradiction, rather than an unequivocal dropping of the entire proceedings.
- The Court rejected the argument that the demand was invalid merely because the Annexure did not bear a separate signature. Since the digitally signed portal order expressly adopted the Annexure, the Annexure formed part of the authenticated adjudication order.
- The corrigendum was held to be a permissible rectification under Section 161 of the CGST Act. It merely corrected the portal recital, preserved relief on the first three issues and repeated the demand already recorded for the fourth issue; it did not introduce a new ground or enlarge the demand.
- The Court did not decide the merits of the disputed ITC demand or surviving limitation issues. It directed the Department to provide the relevant documents and statutory summaries and allowed the taxpayer four weeks to pursue an appeal under Section 107 without rejection on limitation grounds. Recovery was kept in abeyance during the prescribed appeal period.
