Officer Barred from Relevying Covered Demand: Orissa HC Quashes GST Order as Double Taxation

The Orissa High Court has cancelled a GST demand issued by a state tax official, stating that it was unfair because it effectively taxed the same goods twice.

The order passed u/s 73 of the Central and Odisha GST Acts for the financial year 2021-22 has been contested by the applicant, Sai Sitaram Construction, a registered dealer.

The Joint Commissioner of State Tax, previously for the period April to September 2021, raised a demand of Rs 21,38,338 for an alleged mismatch in ITC claims vis-à-vis GSTR-2B, vide order dated 1st December 2022. From the applicant’s cash ledger, the same demand has been recovered in the pendency of the appeal.

In the following order dated 11th April 2025, covering April 2021 to March 2022, the same amount for April – September 2021 was included again, which results in duplication of the earlier demand.

Adv. Kajal Sahoo, the applicant’s counsel, claims that the same inclusion was without jurisdiction and in breach of the GST Act.

The GST department’s standing counsel, on hearing the case, acknowledged that the demand for April- September 2021 had also been included again in the April 2021 – March 2022 order.

The bench of Chief Justice Harish Tandon and Justice M.S. Raman held that the second demand was untenable in law as it led to double taxation. It expressed that “On the conceded position as aforesaid, this Court cannot, therefore, sustain the order dated 11th April, 2025 as tenable in the eye of law, as such a recourse would tantamount to double taxation. Hence, said order is, hereby, set aside.”

The court, while quashing the order, asked the GST officer to issue a fresh intimation restricted to the period October 2021 to March 2022.

The applicant was required to produce books of accounts, tax invoices, and other pertinent documents, after which the authority would pass a fresh order under section 73 within 6 weeks, following due opportunity of hearing.