Rectification in GST for Contradictory Orders Know Your Rights
Rectification is warranted under GST law when the same taxpayer receives contradictory orders from different GST authorities on the same matter. This creates confusion, compliance issues, and often financial hardship. In this blog, we explain when rectification applies, legal references, and the step-by-step remedy available to taxpayers.
What is Rectification Under GST?
Rectification means correcting a mistake or error in an order or decision issued by a GST authority. This is governed by Section 161 of the CGST Act, 2017, which allows any authority to rectify any error apparent on the face of the record, either on its own or on an application by the taxpayer.
When is Rectification Warranted?
Rectification becomes necessary when:
- Contradictory orders are issued on the same subject matter (e.g., classification, refund eligibility, ITC denial).
- Orders passed by different jurisdictions (state vs. central GST authorities) conflict with each other.
- Same issue has been decided differently across two adjudication levels.
- GST system error causes incorrect demand or liability, which is acknowledged by the department.
Key Legal Provision: Section 161 of CGST Act
“The proper officer may rectify any error apparent on the face of the record…”
— Section 161, CGST Act, 2017
- Time Limit: Rectification must be done within 3 months from the date of issue of the order.
- Exception: No time limit if the rectification is due to a Supreme Court or High Court direction or departmental clarification.
Legal Case Reference
🧾 Case: Indian Oil Corporation Ltd. v. Union of India [2024]
The Delhi High Court observed that conflicting orders by two tax authorities on the same transaction violate principles of natural justice, and ordered rectification.
🧾 CBIC Instruction No. 01/2022-GST dated 07.01.2022
Advises uniformity in assessment orders. Acknowledges that contradictory orders cause unnecessary litigation and suggests suo-motu rectification in such cases.
👉 View on CBIC site
Step-by-Step: How to Seek Rectification
- Identify the contradiction (example: two different orders on the same invoice or period).
- File a rectification application in Form GST ASMT-18 (if related to assessment orders).
- Attach both orders with explanation and summary of contradiction.
- If no response, approach Appellate Authority under Section 107 quoting natural justice violation.
- In urgent cases, file a writ petition in High Court citing Article 226 for equitable remedy.
Expert View: Practical Tip
“Always raise a grievance via GST portal first. If you have contradictory orders, document the timeline carefully. Courts usually favour taxpayers when administrative inconsistency is evident.”
— CA Dinesh Rao, Indirect Tax Consultant
When Department Must Act Suo Motu
- If an officer realizes a contradictory or incorrect order is passed, they must initiate rectification on their own, even without taxpayer request.
- Internal audit or GSTN flags often trigger such cases.
Common Examples of Contradictory Orders
| Issue | Order 1 Says | Order 2 Says |
|---|---|---|
| ITC on construction services | Not allowed | Allowed under Rule 42 |
| GST on employee secondment | Taxable supply | Not a supply (per CBIC FAQ) |
| Export refund | Approved | Denied (reason: non-submission) |
Why Rectification Matters
- Prevents double taxation
- Avoids penalty for same issue
- Saves time and cost of litigation
- Reinforces trust in tax administration
Internal Link
📘 Also Read: GST Appeal Process Explained – Section 107 & Beyond
Optional FAQs
Q1: What is the timeline for rectification under GST?
A: Within 3 months of the order, unless it’s a result of court ruling or systemic error.
Q2: Can I challenge contradictory GST orders directly in High Court?
A: Yes, if the contradiction leads to violation of natural justice or affects fundamental rights.
Q3: Is ASMT-18 the only form for rectification?
A: Mostly for assessment-related orders. For other cases, use appropriate rectification request through portal or letter.
Summary (Google Snippet Optimized)
Rectification is warranted under GST when contradictory orders are passed on the same issue. Section 161 of the CGST Act empowers rectification to correct such errors. Taxpayers can apply via ASMT-18 or seek court remedy if needed.
Final Note: Use Efiletax for Professional GST Support
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