Allahabad High Court: Discrepancy Between Detailed GST Order and DRC-07 Is an Error Apparent on the Face of Record — Ast Pipes Limited Vs Union of India And Another

Background and Context

The Allahabad High Court recently adjudicated a significant writ petition filed by Ast Pipes Limited challenging the rejection of its rectification application under Section 161 of the Central Goods and Services Tax Act, 2017. The case raises an important question about what constitutes an "error apparent on the face of record" for the purposes of rectification under GST law, and whether a mismatch between an Order-in-Original and its consequential Form GST DRC-07 qualifies as a rectifiable arithmetical or clerical error.

The judgment offers meaningful guidance to assessees who find themselves in situations where the demand summary issued through DRC-07 does not accurately reflect the figures confirmed in the underlying detailed order.

Facts of the Case

Ast Pipes Limited received an ex-parte Order-in-Original dated 10.11.2023, followed by Form GST DRC-07 dated 11.12.2023. Upon reviewing these documents, the assessee identified a discrepancy between the tax demand figures recorded in the detailed order and those reflected in the DRC-07.

The detailed Order-in-Original confirmed the following amounts:

  • Tax demand: ₹3,17,414
  • Penalty under Section 74(5) of the CGST Act: ₹47,612
  • Demand towards wrongful availment of transitional credit: ₹3,25,972
  • Equal penalty on transitional credit demand: ₹3,25,972
  • Interest: ₹57,878

In contrast, Form GST DRC-07 recorded a tax demand of ₹6,43,386 — a figure that did not align with what was confirmed in the detailed order.

The assessee further pointed out that the tax amount of ₹3,17,414 confirmed in the detailed order had itself been described as adjusted against deposits of ₹3,14,745 and ₹2,992 made by the petitioner under Section 74 of the CGST Act read with Section 121 of the said Act. Consequently, those deposited amounts ought never to have been included in the DRC-07 demand.

To seek correction of this arithmetical discrepancy — specifically, a reduction in the tax demand by ₹3,17,414 — the assessee filed a rectification application on 21.05.2026 under Section 161 of the CGST Act, 2017.

The Adjudicating Authority's Rejection

The adjudicating authority rejected the rectification application vide order dated 10.09.2026, along with a summary thereof dated 11.09.2026. The authority's reasoning, as recorded in the impugned order, was as follows:

"In this regard, I find that the applicant has not identified any specific clerical or arithmetical mistake, such as an incorrect totalling, transcription error, accidental omission of a figure or other patent mistake which can be corrected merely by reference to the undisputed record. The applicant has essentially alleged a discrepancy between the operative portion of the Order-in-Original and the consequential FORM GST DRC-07 and seeks consequential relief therefrom under sub-section 2 of Section 161 of the CGST Act, 2017."