Order Date – 14 July 2025

Parties:  M/s. Eminent Textiles Mills Pvt. Ltd. Vs State Tax Officer, The Assistant Commissioner (ST)-2, Audit Officer, & The Deputy Commissioner (Appeals)

Facts –

• The Appellant, M/s. Eminent Textiles Mills Pvt. Ltd., as subjected to a GST audit under Section 65 of the TNGST Act for AY 2019–20, resulting in a demand order.
• A rectification application under Section 161 was filed by the appellant, which was rejected on 21.01.2025 without hearing. The appellant filed a writ petition, which was dismissed by the Single Judge, leading to this writ appeal.

Issue –

• Whether dismissal of a rectification application without affording a personal hearing violates the principles of natural justice?

Order –

• The Division Bench of Hon’ble High Court held that the third proviso of section 161 talks of rectification which is a positive act. “Refusal to rectify” cannot be read into the expression “such rectification”. This situation is not envisaged by the third proviso.
• The third proviso to Section 161 will kick in only when there is rectification and the said rectification affects any person. In other words, these two elements must be present to trigger the application of the third proviso. When the rectification application is dismissed as such without there being anything more, the original order stands as such. When there is no rectification, there is no question of invoking the principles of natural justice.
• With utmost respect to the learned Judges, the division bench were unable to agree with their interpretation of the third proviso. There is no requirement that before dismissing the rectification application, the authority must hear the applicant. The order of the learned Single Judge is confirmed. The appellant is given two more weeks from today to file an appeal against the order impugned in the writ petition.
• The writ appeal is dismissed.