The Delhi High Court has ruled that a rectification order issued under Section 161 of the Central Goods and Services Tax (CGST) Act is invalid if it is made without granting a hearing to the affected party. This decision stemmed from the case involving Raman Enterprises and the Commissioner of SGST, Delhi. The issue arose when an ex parte order dated December 30, 2023, demanded ₹15.39 lakh from the petitioner, following a show cause notice and a reply filed without a subsequent personal hearing. The petitioner later sought rectification of this order, citing issues with their consultant, but the application was dismissed on June 28, 2024, again without a hearing.

The core issue was whether the rejection of the rectification application without a hearing was valid under the CGST Act. The High Court determined that the rectification order was invalid as it was passed without a hearing, which contravened the third proviso to Section 161. This provision requires that any rectification order that adversely affects the assessee must include a personal hearing to uphold the principles of natural justice. Consequently, the court quashed the rectification order and remanded the matter for fresh proceedings, ensuring the petitioner is given proper notice and the opportunity for a personal hearing. The original demand order's challenge was not entertained due to a delay in filing. This ruling underscores the importance of procedural fairness in tax-related rectifications.