Section 161 of the CGST Act, 2017 – Rectification Order –Principal of Natural Justice -- The petitioner sought directions for calling records of the Appellate Authority as also the proceedings of assessment dated 13.08.2020 and communication dated 27.08.2020 in the shape of Corrigendum-cum-Addendum and the impugned order of rectification dated 12.11.2020 issued under Section 161 by holding the impugned proceedings as illegal, without authority of law, without jurisdiction. An Assessment order came to be passed in exercise of power conferred under Section 62. On 27.08.2020, the very same authority, enlarged the order with certain additional liabilities by styling the said order as Corrigendum-cum-Addendum. This communication determined the penalty payable came to be made for the first time in terms of Section 122(2)(a). Thereafter, the very same authority issued another communication titling it as rectification order on 12.11.2020 under Section 161. The petitioner counsel submitted that the entire procedure followed by the authorities in imposing penalty without hearing the petitioner is illegal and incorrect. The court observed that Section 161 of the Act makes it very clear that where any rectification adversely affects any person, principles of natural justice shall be followed by the authority carrying out such rectification. Further, Section 62 does not anywhere speak about imposing penalty. It only speaks about liability for payment of interest. The authority can impose penalty after giving reasonable opportunity of hearing such person. Since the order impugned substantially affects the assessee as penalty is sought to be imposed, which demand did not form part of notice dated 13.08.2020, without giving an opportunity of hearing, the orders under challenge are set aside.

Held that:- The Hon’ble High Court allowed the petition and directed that the respondents are permitted to proceed further by issuing a fresh notice and pass orders in accordance with law.