Madras HC held that taxing the same turnover by two separate GST units constitutes a rectifiable error under Section 161, allowing the taxpayer to present its computation.
Double Taxation of GST Turnover Is Rectifiable Error: Madras HC
The Madras High Court has ruled that subjecting the same turnover to tax by two separate GST units amounts to a rectifiable error under Section 161 of the Central Goods and Services Tax Act, 2017. The taxpayer was permitted to submit its detailed computation and representation before the department to correct the duplication.
The issue arose when two different jurisdictional authorities assessed the same outward supply under different registrations, resulting in double tax demand. The court emphasized that Section 161 empowers the tax officer to rectify such errors apparent from the record where the liability has been computed erroneously due to administrative overlap. The court directed the department to consider the taxpayer’s submissions afresh, stating
'Where identical turnover is taxed twice by separate wings, it defeats the very purpose of the GST regime.'
This decision underscores the administrative challenges in multi-state registration systems and clarifies that duplication across units is not mere departmental inefficiency but a legal error. Tax practitioners should invoke Section 161 proactively in cases of overlapping assessment proceedings, especially for businesses with operations across multiple states or GSTINs.
Citations
- Central Goods and Services Tax Act, 2017, Section 161
