Facts of the Case:

In this case, the petitioner challenged an Assessment Order passed for the tax period 2021–2022. The impugned order was preceded by a Show Cause Notice in Form DRC-01 dated 10.06.2025, to which the petitioner had not filed any reply. Consequently, the assessment order was passed ex parte. By the impugned order, a total demand of ₹1,61,84,127/- was confirmed comprising tax, interest, penalty, and late fee under the heads of under-declaration of output tax, excess claim of ITC, excess ITC claimed in GSTR-3B vis-à-vis GSTR-9, ineligible ITC under Section 17(5), ITC claimed from cancelled dealers/return defaulters/non-payers, and interest on late reporting of invoices.

The petitioner contended that on the very same day, the same officer had passed another order pursuant to a separate Show Cause Notice dated 23.09.2025, wherein demands relating to certain defects, particularly under-declaration of tax and excess ITC had already been dropped. Therefore, confirmation of those very demands again in the impugned order amounted to duplication. It was further submitted that the impugned order was not directly communicated to the petitioner and came to their knowledge only when recovery proceedings were initiated. The petitioner also claimed to have taken steps to rectify the discrepancies in light of the earlier proceedings.

Issue:

Whether the impugned assessment order confirming demand under certain heads was sustainable when similar demands had already been dropped in parallel proceedings initiated by a different Show Cause Notice.  Whether the ex parte assessment warranted interference on the ground of lack of opportunity and possible duplication of demand.

Held that:

The Court observed that part of the demand confirmed in the impugned order pursuant to DRC-01 dated 10.06.2025 overlapped with the subject matter of another order passed on the same day pursuant to DRC-01 dated 23.09.2025.

With respect to defect No.(i) (under-declaration of tax payable), the Court noted that the demand had already been dropped in the earlier proceedings. Therefore, there could not be duplication on that count.

Similarly, regarding defect No.(ii) (excess claim of ITC), the Court observed that it had been dropped in the parallel order dated 28.10.2025 passed pursuant to the Show Cause Notice dated 23.09.2025. However, since the petitioner had failed to respond to the Show Cause Notice dated 10.06.2025, the impugned order had been passed ex parte.

Considering the circumstances, the Court remitted the matter to the State Tax Officer for fresh adjudication on merits. 

Case Name: M/s. S&S Power Switchgear Equipment Limited Versus The State Tax Commissioner, The Deputy Commissioner (ST), The Bank Manager, Kotak Bank Ltd., Chennai, The Bank Manager, ICICI Bank Ltd., Chennai dated 10.02.2026