Overlapping GST assessment and ex parte demand for same tax period; order set aside and remanded for fresh decision on DRC-01 reply.

The dominant issue was whether the ex parte GST demand for the relevant tax period suffered from overlapping assessment/demand. The HC found, on a prima facie reading of the impugned order and the parallel assessment order, that the confirmed demand appeared to overlap, warranting reconsideration on merits consistent with principles of natural justice. Consequently, the HC set aside the impugned order and remitted the matter to the tax authority for a fresh determination after permitting the assessee to file a reply to the DRC-01 notice within the stipulated time, treating the impugned order as an addendum; the writ petition was disposed of by remand.

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The writ petition challenged an order in DRC-07 dated 22.08.2024 for tax period 2019-2020, preceded by notice in Form DRC-01 dated 27.05.2024, to which no reply was filed. The order confirmed demand on "Excess claim ITC" (CGST ?94,244; SGST ?94,244), "Penalty due U/S.73(9)" (?10,000 each), "Interest due U/S.50(3) (from 20.04.2020 to 22.08.2024) 1584 days delay" (?73,619 each), and "Penalty due U/S.123" (?5,000 each), totalling ?1,82,863 each under CGST and SGST, with NIL paid. The petitioner relied on an earlier DRC-01 dated 13.12.2023 and a subsequent assessment order dated 31.08.2024 for the same tax period, where the demand was dropped. On comparison, the Court found "prima facie, there is an overlapping in the demand" confirmed in the impugned order. The matter was remitted to the respondent "to pass a fresh order on merits," and the petitioner was directed to file a reply to DRC-01 dated 27.05.2024 by treating the impugned order "as an addendum" within 30 days.

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