JSW Techno Projects Management Limited And Anr Vs Union of India And Ors (Bombay High Court)
Date: October 8, 2025
Subject Matter
Resorting to Section 161 to correct an SCN figure is deemed inappropriate and a "tactic to delay the adjudication process."
Summary
The petitioner challenged two actions: (1) the rejection letter dated August 21, 2025, denying their application under Section 161 of the CGST Act to rectify an alleged error in the Show Cause Notice (SCN) dated June 30, 2025; and (2) the SCN itself, arguing it was issued without jurisdiction in violation of Section 6(2)(b) of the CGST Act (dual jurisdiction issue, citing Armour Security).
The petitioner claimed the SCN contained an error apparent on the face of the record because it failed to account for taxes already paid. The Revenue argued that an SCN is not an appealable instrument, and any perceived error should be addressed in the response to the SCN, not via rectification.
The High Court dismissed the petition, finding it premature and perceiving the actions as a stratagem to delay adjudication. The Court refrained from imposing costs at the counsel's request but suggested the petitioner contribute to a hospital.
1. On Rectification of Show Cause Notice (Section 161):
SCN Does Not Impose Liability: The Court held that an SCN, by itself, imposes no binding liability or raises a finalized demand. It is issued precisely to allow the noticee to present their defense and point out errors in the allegations.
Rectification Inappropriate: The reference to "notice" in Section 161 must be construed in the context of finalized instruments (like orders or finalized adjudications) that immediately cause prejudice. Resorting to Section 161 to correct an SCN figure is deemed inappropriate and a "tactic to delay the adjudication process."
Disputed Issues Cannot Be Rectified: The claims raised (e.g., proper accounting of payments, interpretation of Section 15(2)(b) regarding free-of-cost supplies) involve contested and disputable issues that cannot be examined under the limited scope of correcting an error apparent on the face of the record. These issues require full adjudication.
No Prejudice/Natural Justice: No prejudice was established. The Court concluded there was "no such thing as a technical breach of natural justice" in this context.
2. On Jurisdictional Challenge (Section 6(2)(b)):
Factual Issues Remain: The Court held that applying the principle of dual jurisdiction, as established in Armour Security (India) Ltd., requires an in-depth examination of factual aspects, the scope of the two proceedings, and verification of overlapping periods.
Petition Premature: Since the petitioner has not exhausted the normal process of responding to the SCN and presenting the facts to the adjudicating authority, the petition is "quite premature" and deviates from the normal practice of requiring exhaustion of alternate remedies.
Conclusion:
The Court declined to entertain the petition, finding that the petitioners failed to make out an exceptional case for intervention.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Heard learned counsel for the parties.
2. The challenge in this Petition is to the impugned Rejection Letter dated 21 August 2025, by which the Petitioners’ Application under Section 161 of the Central Goods and Services Tax Act, 2017 (“CGST Act”), for correcting, what the Petitioners described as an error apparent on the face of the record in the show cause notice dated 30 June 2025, was rejected.
3. The Petitioners have also independently challenged the show cause notice dated 30 June 2025, on the ground that it violates the provision of Section 6(2)(b) of the CGST Act, as interpreted by the Hon’ble Supreme Court in the case of Armour Security (India) Ltd. Vs. Commissioner, CGST, Delhi East Commissionerate And Anr.1
4. Mr Jain submitted that the impugned show cause notice dated 30 June 2025 does not give credence to the taxes already paid by the Petitioner. This, according to him, constitutes an error apparent on the face of the record in the impugned show cause notice dated 30 June 2025, and therefore, this error was required to be corrected by the authority which had issued the impugned show cause notice by exercising the powers under Section 161 of the CGST Act. He submitted that in any event, a hearing should have been granted before rejecting the Petitioner’s Application for Rectification.
5. We have considered the above submission, but we find no merit in the same. Section 161 no doubt refers to rectification of errors apparent on the face of record in any decision, order, notice, certificate, or any other document to rectify any error which is apparent on the face of record.
6. However, the reference to “notice”, must be construed in the context of the other documents or instruments referred to under Section 161. So construed, that would include a notice, which has some immediate effect of occasioning any serious prejudice to the Petitioner or demanding from the Petitioner some amount based upon an adjudication or finalized adjudication.
7. In this case, we are only concerned with a show-cause notice. Apart from the fact that no case of an error apparent on the face of the record has been established, we believe that any error, if any, in the show cause notice can always be pointed out by the Petitioner by submitting a response to the show cause notice. If a response is submitted, supported by documentary evidence of payments as claimed, we see no reason to doubt that the adjudicating authority would not consider it. This approach of seeking rectification of a show-cause notice seems to be a tactic to delay the adjudication process related to the show-cause notice for as long as possible.
8. The show-cause notice, by itself, imposes no liability or raises no binding demands upon the petitioner. If the petitioners believe that figures stated therein are excessive or erroneous, they can always point out the alleged errors in the show-cause notice in their response. The adjudicating authority would then consider such a cause or contention. But, resorting to Section 161 simply to correct what the petitioners perceive is an error, is inappropriate, and an attempt to unnecessarily delay the adjudication proceedings by adopting such a stratagem.
9. We get the impression that the Petitioner is intent on delaying the adjudication in the show cause notice at all costs. Therefore, an application was filed to amend the show cause notice itself so that a significant amount of time would pass before a decision is made on such an application. Further time is spent prosecuting a challenge against the decision.
10. The petitioners, aware of the heavy pressure on the Court’s dockets, tend to see if any notice, or even interim relief, can be wriggled out. Even with a notice, proceedings are invariably delayed by citing pendency. As a writ Court exercising equitable and discretionary jurisdiction, we do not believe we should assist the petitioners in hindering or delaying the adjudication, especially since they have ample opportunity to respond to the show-cause notice and present their grievances.
11. The rectification application, in any event, proceeds upon some complicated claim of discharging GST on the entirety of job charges received from JSW Steel. There is also an issue of interpretation of section 15(2)(b) and Circular dated 26.03.2018 involved in determining whether the value of the free of cost supplies, such as water or power, is includable. These contested and disputable issues can hardly qualify as any errors apparent on the face of the record. All these matters could not have been examined under section 161 of the CGST Act. These matters will need to be examined during the adjudication proceedings if the petitioners raise such issues in response to the show-cause notice. The writ Court also cannot be expected to examine such disputed issues, particularly when the purpose of raising such disputed issues in this manner appears to be a ploy to take a chance and see if some interim relief could be wriggled out to stall or at least delay the adjudication proceedings as long as possible.
12. Regarding the hearing, we observe that the impugned rejection does not dismiss the petitioners’ claims on the merits but solely because of the absence of an apparent error on the face of the record. In any case, we have heard the learned Counsel for the Petitioners thoroughly, and we are also convinced that there was no need to seek rectification in the show-cause notice when all arguments about the alleged non-accounting of payments could have been raised in response to it. There is no such thing as a technical breach of natural justice. No prejudice has been established whatsoever. No decision regarding rectification in a show-cause notice was cited before us, possibly because a show-cause notice is issued precisely to give the opportunity for the notice to present its side or even point out errors in the allegations contained within the notice.
13. Regarding the argument based upon the provision of Section 6(2)(b) of the CGST Act, again, we note that there are factual issues that will have to be gone into before such an argument is accepted. The scope of the proceedings initiated by the third respondent and the present proceedings would have to be examined in depth to see if the provisions of Section 6(2)(b) are indeed attracted to the facts of this case. Only if a clear case not admitting of any such disputed issues is involved, could we have entertained a petition. Armour Security (Supra) was one such case.
14. As observed earlier, before applying the decision in the case of Armour Security (India) Ltd. (supra), the factual aspects that need to be examined, the scope and import of the two proceedings need to be examined, and some reference to factual issues now raised in this petition would also need to be verified. All these matters need not be examined in these proceedings when the petitioners have not made out any exceptional case to deviate from the normal practice of not entertaining writ petitions unless all alternate remedies are exhausted.
15. The Petitioner should at least place such facts by responding to the show cause notice. Apart from some overlap, even the periods for which the impugned show-cause notice is issued, at least prima facie, appear to be different. A mere assertion that the issue is common is not sufficient to make out a case that the impugned show-cause notice is wholly without jurisdiction to attract the principle in the case of Whirlpool Corporation Vs Registrar of Trade Marks, Mumbai and Ors2.
16. To that extent, we find that this Petition is quite premature and has been filed merely to take a chance. The filing of such Petitions is on the rise in this Court, and we have addressed such issues in the case of Oberoi Constructions Ltd. Vs. Union of India and Ors.3 By adopting the reasoning in the said decision and the precedents of the Hon’ble Supreme Court referred to therein, we decline to entertain this petition.
17. Nonetheless, we have intentionally refrained from making any detailed observations on the two pleas now presented by the petitioner because we do not wish to even remotely prejudice the petitioner in its defence during the adjudication proceedings.
18. However, we clarify that it would be open to the Petitioners to respond to the show cause notice and place all facts and circumstances necessary to sustain an argument based on Section 6(2)(b) of the CGST Act. Again, there is no reason to believe that such a contention or for that matter, the decision of the Hon’ble Supreme Court in the case of Armour Security (India) Ltd. (supra), will not be considered by the authority that has issued the show cause notice.
19. For the above reasons, we decline to entertain this Petition. For taking the chance, we were inclined to impose costs payable to the Government KEM Hospital, within four weeks from the date of uploading this order. However, at the persuasion of Mr Jain, we refrain from imposing any costs.Still, we feel that the Petitioner should, on its own, consider offering an amount of at least Rs. One lakh to the Government KEM Hospital as a part of its corporate social responsibility. Again, we clarify that this is not a direction.
20. The Petition is dismissed in the above terms.
Notes:
1 (2025) 145 GSTR 385
2 (1998) 8 SCC 1
3 2024 SCC OnLine 3508