Allahabad High Court rules that Section 161 GST Act cannot be used to recall appellate orders merely because SLP filed before Supreme Court

The Hon'ble High Court of Judicature at Allahabad in M/s Opasil Pigments And Chemicals (P) Ltd. vs. State Of U.P. And 2 Others [Writ Tax No. 613 of 2020] dated September 4, 2025 held that Section 161 of the GST Act cannot be used as a mechanism for recalling an appellate order merely on the basis of filing of a Special Leave Petition before the Apex Court when no interim order has been granted. The Court held that rectification under Section 161 is permissible only for errors apparent on the face of the record, which must be self-evident and not require a long drawn process of reasoning, and cannot be used for review or revision of orders decided on merit.

FACTS OF THE CASE

The goods of the Petitioner, M/s Opasil Pigments and Chemicals (P) Ltd., were seized by the tax authorities. For the release of the same, an order under Section 129(1) of the UP GST/CGST Act was passed against the Petitioner. Aggrieved by this order, the Petitioner filed Writ Tax No. 865 of 2019 before the High Court.

On August 1, 2019, the High Court passed an interim order directing the seizing authority to release the goods of the Petitioner along with the vehicle forthwith subject to deposit of security other than cash or bank guarantee or in alternative accept an indemnity bond, equal to the value of tax and penalty to the satisfaction of the seizing authority. However, the Respondents, instead of complying with the said order, insisted on deposit of security. Against this non-compliance, the Petitioner filed Contempt Application (Civil) No. 5428 of 2019, in which no interim order was passed.

In the meantime, the Petitioner filed an appeal under Section 107 of the GST Act before the appellate authority. The appellate authority, vide order dated February 8, 2020, allowed the appeal of the Petitioner on its merit and quashed the penalty under Section 129(3) of the GST Act.

Thereafter, Respondent No. 3 moved an application under Section 161 of the GST Act before the appellate authority. By a letter sent by Respondent No. 3, it was mentioned that a Special Leave Petition No. 21569 of 2019 had been preferred before the Apex Court. Based on this application under Section 161, the impugned order dated August 4, 2020 was passed by Respondent No. 2, whereby the order dated February 8, 2020 allowing the appeal was recalled.

The Petitioner was aggrieved by the impugned order dated August 4, 2020 passed by Respondent No. 2, which recalled the appellate order on the ground that a Special Leave Petition had been filed before the Apex Court, despite the fact that no interim order had been granted by the Apex Court and no prohibition was laid staying the proceedings before the appellate authority.

ISSUE

Whether Section 161 of the GST Act can be invoked to recall an appellate order passed on merits merely on the basis that a Special Leave Petition has been filed before the Apex Court, when no interim order has been granted by the Apex Court?

HELD BY THE COURT

The Hon'ble High Court of Judicature at Allahabad in Writ Tax No. 613 of 2020 held that:

1. The Court observed that the record clearly shows that the order allowing the appeal of the Petitioner cannot be recalled merely on the basis of filing of Special Leave to Appeal before the Apex Court in which neither any interim order has been granted nor any prohibition was laid staying the proceedings for passing of the order by the appellate Court, which is a statutory remedy provided under the Act. The Court held that Section 161 cannot be used as a mechanism for recalling the order of appeal, which has been decided on its own merit in favour of the assessee.

   
   

2. The Court opined that the rectification of error apparent on the face of record must be reflected at a glance. In other words, if no long drawn process of reasoning is required then only rectification application can be allowed. The Court held that the case in hand does not fall within the purview of Section 161 of the Act. The Court observed that Respondent No. 3, if at all was aggrieved, ought to have taken legal remedy available under the Act instead of filing of rectification application.

   
   

3. The Court relied upon the judgment of the Hon'ble Apex Court in the case of M/s Deva Metal Powders Pvt. Ltd. vs. Commissioner of Trade Tax, UP, 2008 NTN (Vol. 36)-4, wherein it was held that an error apparent on the face of the record for acquiring jurisdiction to effect rectification must be such an error which may strike one on a mere looking at the record and would not require any long drawn process of reasoning. The Court noted the observations made in Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tiruymale [AIR 1960 SC 137] that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record, and where an alleged error is far from self-evident and if it can be established, it has to be established by lengthy and complicated arguments, such an error cannot be cured by a writ of certiorari according to the rule governing the powers of the superior Court to issue such a writ.

   
   

4. The Court further observed that a mistake apparent from the record is rectifiable under Section 161, but the mistake must exist and the same must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. The Court held that a mistake which can be rectified is one which is patent, which is obvious and whose discovery is not dependent on argument or elaboration. Rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order.

   
   

5. The Court opined that in order to bring an application under Section 161, the mistake must be "apparent" from the record. Section 161 does not enable an order to be reversed by revision or by review, but permits only some error which is apparent on the face of the record to be corrected. Where an error is far from self-evident, it ceases to be an apparent error. The Court held that a mistake capable of being rectified under Section 161 is not confined to clerical or arithmetical mistake, but on the other hand, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. An error which is apparent from record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law.

   
   

6. In view of the above, the Court held that the rectification order/impugned orders passed in both the writ petitions cannot be sustained in the eyes of law and the same were hereby quashed. The order allowing the appeal was restored. Both the writ petitions were allowed accordingly.

RELEVANT SECTIONS

Section 129(1) of the UP GST/CGST Act - Detention, seizure and release of goods and conveyances in transit

Section 129(3) of the GST Act - Penalty provisions for detention and seizure of goods

Section 107 of the GST Act - Appeals to Appellate Authority

Section 161 of the GST Act - "Rectification of errors apparent on the face of record"

PARI MATERIA / CASES REFERRED

1. M/s Deva Metal Powders Pvt. Ltd. vs. Commissioner of Trade Tax, UP, 2008 NTN (Vol. 36)-4

The Hon'ble Supreme Court held that an error apparent on the face of the record for acquiring jurisdiction to effect rectification must be such an error which may strike one on a mere looking at the record and would not require any long drawn process of reasoning. The power to rectify mistakes does not cover cases where a revision or review of the order is intended. Rectification of an order does not mean obliteration of the order originally passed and its substitution by a new order.

2. Satyanarayan Laxminarayan Hegde v. Mallikarjun Bhavanappa Tiruymale [AIR 1960 SC 137]

The Hon'ble Supreme Court observed that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Where an alleged error is far from self-evident and if it can be established, it has to be established by lengthy and complicated arguments, such an error cannot be cured by a writ of certiorari according to the rule governing the powers of the superior Court to issue such a writ.

3. Master Construction Co. (P) Ltd. v. State of Orissa [1966] 17 STC 360

The Hon'ble Supreme Court observed that an error which is apparent from record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law.

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