Alliance Polychem Private Limited Vs Deputy Commissioner (Delhi High Court)
Summary: The Delhi High Court has quashed a duplicate demand of Rs. 10,62,000/- raised against Alliance Polychem Private Limited towards ineligible Input Tax Credit (ITC).
The Petitioner challenged the Order-in-Original dated 03 February 2025, which confirmed a demand of Rs. 10,62,000/-. The principal grievance was that the demand arising from the Show Cause Notice dated 02 August 2024 (“SCN-I”) overlapped with the demand raised pursuant to an earlier Show Cause Notice dated 01 August 2024 (“SCN-II”), which had already culminated in an Order-in-Original dated 14 January 2025.
The Court noted that both proceedings concerned a demand of Rs. 10,62,000/- for ineligible ITC availed from M/s Orchid Overseas. The earlier order dated 14 January 2025 had denied the ineligible ITC of Rs. 10,62,000/- under Section 16 of the CGST Act, 2017, confirmed recovery under Section 74(1), imposed interest under Section 50 and imposed a penalty of Rs. 10,62,000/- under Section 74(1). The Petitioner was already in appeal against that order.
The Respondent’s counsel also accepted before the Court that the demand was overlapping. In these circumstances, the Court held that the same demand could not have been raised again through SCN-I, as this would amount to duplicate demands.
