Facts of the Case:
In this case, the petitioner was subjected to two separate adjudication orders passed by different GST authorities for the same tax period, i.e., 2020–2021. The petitioner challenged the order dated 24.02.2025, which followed a Show Cause Notice in GST DRC-01 dated 25.11.2024 and confirmed a demand of ₹10,55,282 towards alleged under-declaration of output tax, excess availment of ITC, interest and penalty. Also, the petitioner challenged another order dated 12.02.2025, preceded by a Show Cause Notice dated 22.11.2024, also pertaining to the same tax period. The petitioner contended that the demands under the two orders overlapped and resulted in duplication. It was further submitted that, in respect of the order dated 12.02.2025, the petitioner had already discharged the entire IGST and CGST liability along with penalty and only a part of the SGST remained unpaid. The respondents disputed the allegation of overlap and sought verification of the payments claimed by the petitioner.
Issue:
Whether two separate adjudication orders passed by different officers for the same tax period, allegedly resulting in overlapping demands, could be sustained, or whether the matter required consolidation and fresh adjudication after verification of payments already made by the petitioner.
Held that:
The High Court observed that both the impugned adjudication orders had been passed for the same tax period, viz., 2020–2021, though by two different officers and pursuant to two separate show cause notices. The Court noted that such parallel proceedings, even if initiated under distinct notices, give rise to a serious apprehension of overlapping and duplicated demands, which is impermissible in law and contrary to the scheme of adjudication under the GST enactments.
The Court held that where an assessee demonstrates prima facie that demands confirmed under different orders relate to the same period and possibly to the same transactions, the matter cannot be allowed to stand without a holistic re-examination. In such circumstances, the proper course is to remit the matter for consolidated adjudication by one authority, rather than allowing multiple orders to operate simultaneously.
Balancing the interest of the Revenue with the need to protect the assessee from multiplicity of proceedings, the Court adopted a conditional remand approach.
The Court specifically permitted the petitioner to substantiate its plea that the demand confirmed under the order dated 12.02.2025 stood subsumed in the demand confirmed under the order dated 24.02.2025 and that there was an overlap. The Court clarified that any amount already paid by the petitioner shall be adjusted towards the pre-deposit, subject to verification by the department.
The Court further held that, upon compliance with the stipulated conditions, the respondent authority shall pass a fresh adjudication order on merits and in accordance with law within a period of three months. Pending such adjudication, and subject to compliance, the attachment of the petitioner’s bank account shall stand automatically vacated.
Case Name: Tvl. Baqir Brothers, Represented by its Partners, Taher Hiranwala and Shabbir Hiranwala Versus The Deputy State Tax Officer – II, Chennai, The Deputy State Tax Officer – I, Chennai dated 19.12.2025
To read the complete judgement 2025 Taxo.online 3535
