Multiple Tax Assessment Orders Issued for the Same Period Cannot Stand Concurrently Under GST

Multiple Tax Assessment Orders Issued for the Same Period Cannot Stand Concurrently Under GST

Issue

Whether the tax department can validly sustain two separate assessment orders for the same assessee covering identical tax discrepancies for the exact same tax period, and whether an ex parte assessment order should be set aside if the taxpayer missed the notices due to a cancelled registration and restricted portal updates.

Facts

• The petitioner-assessee challenged two distinct GST assessment orders issued for the same tax period (2021-2022): the first dated October 9, 2025, and the second dated December 18, 2025.

• Both assessment orders addressed the exact same tax discrepancies for the petitioner, though the later order dated December 18, 2025, also incorporated one additional discrepancy.

• The assessment order dated December 18, 2025, was passed ex parte due to the petitioner’s non-participation in the adjudication process.

• The petitioner explained that the non-participation happened because their GST registration had been cancelled, and the department had only uploaded the Show Cause Notice (SCN) and reminders on the online portal without using alternative communication modes.

• On merits, the petitioner contended that the alleged turnover mismatches between GSTR-3B and GSTR-1, and the excess Input Tax Credit (ITC) over GSTR-2A, were clerical errors caused by wrong reporting by their consultant.

• Prior to filing the writ petition, the tax department had already recovered approximately 46% of the total disputed tax amount from the petitioner.

Decision

• The High Court ruled that issuing two concurrent assessment orders covering the same discrepancies for the same assessee within the same tax period is legally unsustainable.

• The Court quashed the earlier assessment order dated October 9, 2025, since the subsequent order dated December 18, 2025, comprehensively covered all the original issues plus the newly identified discrepancy.

• The Court left the department free to legally pursue the discrepancies and determine the final tax liability solely under the later December 18, 2025 order.

• Regarding the ex parte order, the Court held that given the technical nature of the mismatches, the petitioner’s explanation, and the lack of proper notice visibility due to registration cancellation, a fresh opportunity of being heard must be granted on equitable grounds.

• The Court set aside the second assessment order dated December 18, 2025, and remanded the matter back to the tax authority for a fresh decision after providing the petitioner an effective personal hearing.

Key Takeaways

• No Duplicative Adjudication: The tax department cannot maintain multiple active assessment orders for the same taxpayer for the same assessment period. If a later, more comprehensive order is passed, the earlier order on the same issues is liable to be quashed.

• Portal Notices vs. Cancelled Registration: Merely uploading notices on the GST portal may not constitute sufficient or fair service of notice if the taxpayer’s registration has been cancelled, as they are unlikely to log in regularly.

• Remand on Equitable Grounds: Courts will lean toward restoring natural justice and remanding ex parte orders for a fresh look if the taxpayer demonstrates a bonafide reason for non-appearance and has already suffered substantial tax recovery.