Section 161 of the CGST Act, 2017—Rectification of Errors - The petitioner challenged the impugned orders, whereby the Respondent Department has issued Form GST DRC-07, levying tax, interest and penalty, on the purported allegation of the petitioner having claimed excess ITC, without affording any opportunity of hearing to the petitioner company. The petitioner filed an application for rectification on 28th September, 2019 under Section 161 of the Act and also submitted reconciliation statements for the period of 1st July 2017 to 30th September 2018, according to that, there is no difference or mismatch or excess availment of ITC. No order has been passed on the rectification application till date while an amount of Rs. 74.20 lacs of ITC remains blocked in its Electronic Credit Ledger since 16th February 2020 till date much beyond the one year period prescribed under rule 86A . Further, in the absence of a proper show cause notice alleging the contravention committed by the petitioner as stipulated under Section 73 of the Act no proceedings could have been initiated. The counsel for the respondent submitted that application for rectification is not maintainable and the same is filed beyond six months period. A review of the order passed under Section 73 cannot be undertaken under Section 161 which the petitioner is actually seeking. It is only for correction of errors apparent on the record. The court observed that the respondents should take a decision on the application for rectification dated 28th September, 2019 pending before them in accordance with law as expeditiously as possible and also taking note of the orders passed by the Apex Court in this regard.

Held that:- The Hon’ble High Court directed that the petitioner if aggrieved by the order passed in rectification application, may have the liberty to avail the statutory remedy under the Act, 2017. The respondents would also take a decision on the issue of unblocking of the Electronic Credit Ledger of the petitioner preferably within a period of six weeks, as the same has remained blocked for more than 2 years since 16.02.2020.