Demand Order Set Aside; Overlapping Adjudication Requires Fresh Proceedings

Issue: Whether a demand order under Section 73 of the CGST Act, 2017, is valid when it results from overlapping adjudication, where a prior order for a portion of the same period was not considered.

Facts:

Impugned proceedings were initiated against the assessee for the financial year 2019-20.
The assessee pointed to a scrutiny report alleging overstatement of ITC.
The assessee submitted that a prior order under Section 73 was issued for the period July to September 2019.
The subsequent proceedings did not take into consideration the earlier adjudication, resulting in a re-assessment of an overlapping period.

Decision:

The court held that the impugned proceeding against the assessee, resulting in the demand order, was to be set aside.
The revenue was directed to proceed afresh in accordance with the law.

Key Takeaways:

Overlapping Adjudication: Conducting separate proceedings for overlapping periods without considering prior adjudications is improper.
Re-assessment of Same Period: A subsequent assessment that effectively re-assesses the same period already adjudicated is invalid.
Consideration of Prior Orders: Assessing authorities must consider prior orders relating to the same period to avoid overlapping adjudications.
Violation of Principles of Fairness: Overlapping adjudications violate principles of fairness and create confusion.
Remand for Fresh Proceedings: The matter was remanded to ensure that the revenue conducts fresh proceedings, considering all relevant factors and prior adjudications.
The court is reinforcing the need for efficient and consistent assessments, and preventing the tax payer from being assessed multiple times for the same issue.

HIGH COURT OF ORISSA

Kalishankar Sahoo

Chief Commissioner of CT and GST

Arindam Sinha, Actg CJ.
and M.S. Sahoo, J.

WP(C) No.27347 of 2024

JANUARY 27, 2025

Mrs. K. Roy Choudhury, Adv. for the Petitioner. S. Mishra, Adv. for Respondent.

ORDER

1. Mrs. Roy Choudhury, learned advocate appears on behalf of petitioner and submits, impugned is proceeding initiated against petitioner for financial year 2019-20. She draws attention to scrutiny report dated 23^rd March, 2021 to show allegation was overstatement of Input Tax Credit (ITC) at ?9,00,982/-

2. She submits, prior to impugned proceeding there was order dated 29^th January, 2021 for in between period July to September, 2019, made under section 73 of Odisha Goods and Services Tax Act, 2017. In the subsequent proceeding initiated as aforesaid, for financial year 2019-20, the earlier adjudication was not taken note of for being taken into consideration. Thus it was a reassessment in respect of the overlapping period.

3. She demonstrates, subsequent order dated 29^th July, 2021 was made on basis of said scrutiny report allegation of there having been overstatement of ITC at Rs 9,00,982/-. However, total tax reflected in the order is in excess of Rs 50,00,000/-Inlcrcsl and penalty are in addition to the same. She submits, it is clear on face of the order that there is apparent error. She seeks interference.

4. Mr. Mishra, learned advocate, Standing Counsel appears on behalf of Revenue and submits, he has instructions. He submits in fairness, impugned proceeding be interfered with on liberty to revenue to start afresh.

5. Impugned proceeding against petitioner for financial year 2019-20 resulting in demand order under annexure-6 are all set aside and quashed. Revenue may proceed afresh in accordance with law.

6. The writ petition is disposed of.