The Aurangabad Bench of the Bombay High Court on Thursday dismissed a petition filed by a Parbhani-based road contractor who sought to nullify a tax order issued by central GST authorities. The matter, which had been reserved earlier this month, saw a somewhat tense courtroom exchange as the bench questioned why the contractor skipped the regular appeal route and tried to reshape the case through a rectification plea.
Background
M/s Suman Construction, represented by partner Kishor Potdar, had challenged a 2023 order of the Additional Commissioner, CGST & Central Excise, Nagpur-1. That order had imposed service tax for two assessment years-2015-16 and 2016-17.
Potdar argued that his firm only builds roads for government departments, mostly through the Public Works Department. He reminded the court that a 2012 Finance Ministry notification exempts such road construction work from service tax. Because of this, he said, he never even needed a service-tax registration.
The dispute began years later when the department, using MAHAVAT data, claimed he owed tax and issued a show-cause notice. Even after the contractor submitted income tax returns, government certificates, and balance sheets, the department confirmed a demand for certain periods. An appeal partially reduced the tax, but the Additional Commissioner later passed another order covering the same earlier period plus an extra year.
Feeling that the 2015–16 issue had already been "settled" in the earlier appeal, the contractor tried a different route — a rectification application under Section 74 of the Finance Act, which allows correction of obvious mistakes.
Court’s Observations
During the hearing, the bench-Justices Vibha Kankanwadi and Hiten Venegavkar-repeatedly pressed counsel on why Section 74 was invoked at all. The judges noted that rectification is only for errors that shout at you from the record, such as wrong calculations, clerical slips, or self-evident legal mistakes.
"The bench observed, 'Section 74 is not a doorway for re-arguing the entire case. A rectification request cannot become a disguised appeal,'" one advocate remarked after the hearing.
The court noted that the contractor wasn't pointing out any simple correction. Instead, he was challenging the very basis of the tax demand: whether his services were exempt, whether there was double adjudication, and whether the earlier appellate order covered the same period.
"These issues," the judges said, "require evidence, reasoning, and interpretation. That is the domain of appeals, not rectification."
The bench also found a basic jurisdictional flaw. The rectification request was decided by the Joint Commissioner in Aurangabad, whereas the original tax order had been issued by the Additional Commissioner in Nagpur-1. Under Section 74, only the authority that passed the original order can modify it.
"The bench observed, 'An officer cannot correct the mistakes of another officer. That would defeat the structure of the Act.'"
The contractor’s reliance on the legal doctrine of merger also failed, as the appellate order he cited dealt only with an earlier case, not the later proceedings that included an additional year.
Decision
In the end, the High Court held that the entire rectification plea was "misconceived," noting that it was essentially an attempt to reopen issues through an improper channel. The judges said the correct remedy was to file a statutory appeal against the March 2023 order - something the contractor did not do within time.
Finding no illegality or breach of natural justice, the court dismissed the writ petition and allowed the contractor to pursue whatever alternate remedies the law still permits.
Case Title: M/s. Suman Construction Through its Partner Kishor Nilkanth Potdar vs. Union of India & Others
Case Number: Writ Petition No. 6467 of 2025