Facts of the Case:

In this case, the petitioner was subjected to adjudication proceedings pursuant to a show cause notice dated 25.09.2023 issued under Sections 73(1), 50 and 122 of the CGST Act, alleging short payment of tax for the period July 2017 to March 2018 and wrongful availment of ITC. An Order-in-Original dated 26.12.2023 confirmed tax demand of ₹3,09,084/- along with interest and penalty.

Subsequently, recovery proceedings were initiated through a bank attachment notice in Form GST DRC-13 dated 14.10.2025. The petitioner contended that a substantial portion of the demand (₹2,67,300/-) had already been paid on 30.07.2018, much prior to issuance of the show cause notice, and therefore, the demand resulted in double taxation. It was also urged that the petitioner could not effectively participate in the adjudication due to improper service of notice and that representations made to the department remained unaddressed.

Issue:

Whether recovery of tax already paid prior to issuance of show cause notice is sustainable, and whether the petitioner should be granted an opportunity to seek rectification of the adjudication order?

Held That:

The Court observed that prima facie, the payment receipt dated 30.07.2018 indicated that the petitioner had already discharged the tax liability to the extent of ₹2,67,300/-, which formed part of the demand raised in the show cause notice. Acknowledging the possibility of double taxation, the Court held that the petitioner deserved an opportunity to place relevant material before the proper officer.

 Accordingly, liberty was granted to the petitioner to file a rectification application in the prescribed form along with proof of prior payment. The proper officer was directed to consider such application in accordance with law within a stipulated time. The writ petition was disposed of without adjudicating on merits, safeguarding the petitioner’s right to seek correction of the demand.

Case Name: M/s. Sri Sai Krishna Enterprises Versus The Superintendent of Central Tax, Medchal CGST Commissionerate Miyapur, Hyderabad and 4 others. dated 06.04.2026

To read the complete judgement 2026 Taxo.online 859