Madras High Court Clarifies GST Amnesty Scheme Waiver Cannot Be Denied Due to Human Error in Assessment Order Classification

In a significant ruling, the Madras High Court addressed the scope of eligibility for waiver under the GST Amnesty Scheme, 2025, particularly in cases where clerical errors in assessment orders have led to misclassification of tax components.

The petitioner, an exporter, challenged the rejection of its application for waiver of interest and penalties under Section 128A of the CGST Act, 2017. The rejection was based on the ground that the entire demand, as per the summary assessment order, pertained only to penalty, rendering the petitioner ineligible under the Amnesty Scheme. The petitioner contended that this was a result of a human error in the summary assessment proceedings, which incorrectly recorded the entire demand under the penalty column, while the original order clearly included tax, interest, and penalty components.

The Court examined the original assessment order and found that it indeed specified amounts for CGST, SGST, IGST, interest, and penalty, contrary to the summary assessment’s depiction. The Court observed that such a clerical mistake should not be perpetuated when considering an application under Section 128A. The first respondent, while deciding the waiver application, was expected to ascertain the correctness of the summary proceedings and consider the application on its merits, rather than relying solely on the erroneous classification.

The respondents argued that the petitioner should have sought rectification of the summary assessment order before challenging the waiver rejection. However, the Court held that when the error is apparent and ascertainable from the records, the authority considering the waiver application must address the substance of the demand rather than its erroneous classification.

Accordingly, the Court set aside the impugned order rejecting the waiver application and remanded the matter to the first respondent for fresh consideration. The Court directed that the amounts be treated as tax, interest, and penalty, and that the petitioner’s eligibility under the Amnesty Scheme be assessed on its merits, after affording an opportunity of hearing. The entire process is to be completed within twelve weeks.

This decision clarifies that authorities must look beyond clerical errors in assessment orders when determining eligibility for statutory relief schemes, ensuring that substantive rights are not defeated by procedural mistakes.