Overlapping GST demands from DRC-01 notice and separate orders to be consolidated; remand ordered with 25% cash deposit

The dominant issue was whether overlapping GST demands, raised pursuant to a DRC-01 SCN and confirmed through separate orders, warranted interference. The HC held that, to prevent duplication and ensure a unified adjudication, the matter should be reconsidered through a consolidated order on merits by the proper officer; consequently, the impugned order was set aside to that extent and the proceedings were remitted subject to the taxpayer depositing an additional 25% of the disputed tax in cash and clearing the unpaid balance of the earlier confirmed demand within 30 days, with any amount already paid to be adjusted after verification.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, for the same tax period, two separate adjudication orders passed by different officers should be remitted and replaced by a consolidated order on merits to address the petitioner's contention of overlapping demands and to balance the interests of the assessee and the revenue.

(ii) Whether interim protection against recovery, including lifting of bank account attachment, should be granted conditionally upon the petitioner making specified deposits/payments and filing replies with documents within the time fixed by the Court.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Remittal for consolidated adjudication for the same tax period where two officers passed separate orders

Interpretation and reasoning: The Court noted that for the same tax period, two different officers (respondents in the respective petitions) had passed separate impugned orders. The petitioner asserted that there was an overlap in the demand confirmed under one of the orders and further stated that, regarding the other order, the tax liability including penalty had largely been paid (with only part of SGST remaining), while the respondents could not confirm the payments and disputed the overlap contention. In these circumstances, the Court considered it appropriate to balance the interests of the assessee and the revenue by avoiding parallel or duplicative adjudication for the same period and by ensuring a single decision on merits after hearing and verification.

Conclusions: The Court remitted the matter to the Deputy State Tax Officer to pass a consolidated order on merits. The petitioner was permitted to substantiate the plea that the demand under the earlier order had been subsumed into the later order and that there was overlap. The petitioner was directed to file replies to both show cause notices with supporting documents, treating the impugned orders as addenda to the respective show cause notices, and the authority was directed to pass the final order expeditiously, preferably within three months after such reply/pre-deposit.

Issue (ii): Conditional pre-deposit/payment directions and consequential vacation of bank attachment

Interpretation and reasoning: To protect revenue while enabling reconsideration on merits, the Court imposed conditions for remittal. It required the petitioner to deposit an additional 25% of the disputed tax in cash (from the electronic cash register) pertaining to the order dated 24.02.2025 and also to pay the balance amount remaining unpaid under the other order, within 30 days. The Court also directed that amounts already paid would be adjusted towards the ordered 25% pre-deposit, subject to verification by the respondents. For recovery measures, the Court linked the lifting of bank attachment to compliance with these stipulations and clarified that attachment would be lifted only if the petitioner was not in arrears of any other amount except the impugned demands.

Conclusions: Upon compliance with the deposit/payment and reply-filing stipulations, the bank account attachment would stand automatically vacated. If the petitioner failed to comply with any stipulation, the authority was given liberty to proceed to recover the tax in accordance with law as if the petitions had been dismissed at admission stage, with the further direction that due notice must be given before passing any such order.

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