Tvl. Palepu Pharma Private Limited Vs State Tax Officer (Madras High Court)
Madras High Court Quashes GST Assessment, Orders Fresh Adjudication on 50% Pre-Deposit; Grants Relief Where Duplicate ITC Demand Already Dropped
In the case before the Madras High Court, the petitioner challenged an assessment order dated 23.08.2024 for the assessment year 2019–2020, which confirmed a total demand of ₹42,32,944 comprising tax, interest, and penalty. A portion of this demand, amounting to ₹3,97,983, related to an alleged excess claim of Input Tax Credit (ITC).
The petitioner submitted that the same ITC-related issue had already been addressed in collateral proceedings through a separate assessment order dated 19.12.2024. In those proceedings, the demand relating to the disputed ITC was initially confirmed but was subsequently challenged before the Appellate Authority. By order dated 16.12.2025, the Appellate Authority allowed the appeal and dropped the demand, holding that the disputed ITC was admissible as it was within the permissible limit and supported by required certificates.
It was also noted that the impugned order dated 23.08.2024 had been passed without considering any reply from the petitioner to the show cause notice issued in Form GST DRC-01 dated 20.05.2024.
During the hearing, the petitioner expressed willingness to deposit 50% of the disputed tax (after adjusting the amount already addressed in the appellate order) for the purpose of fresh adjudication. The Court observed that in similar cases, orders had been quashed and matters remitted for reconsideration subject to partial pre-deposit, depending on the circumstances.
