Facts of the Case

A. Johnson challenged Order-in-Original No.36/AC/GST/2024 dated 28.06.2024, issued by the Assistant Commissioner of CGST & Central Excise, Tirunelveli Division, confirming a demand of Rs.1,51,374/- in tax (CGST and SGST), along with matching interest and an equivalent penalty under Section 74(9) of the CGST Act, 2017 read with Sections 39, 50(1), 59 and 122(2)(b), for the period 2017-18 to 2020-21. The petitioner had not filed a statutory appeal against the order, but separately, the State GST authority had also inspected the petitioner's premises and issued its own show-cause notice for the assessment year 2019-20, pursuant to which the petitioner had deposited over Rs.19.7 lakh in tax to the State exchequer. The Madurai Bench of the Madras High Court, per Justice C. Saravanan, disposed of the writ petition at the admission stage on 23 June 2025.

Issues Involved

  1. Whether the Central GST order dated 28.06.2024 can stand where it does not account for payments the petitioner made to the State GST authority for an overlapping tax period.
  2. Whether the pending Division Bench reference in Varthaman Industries on Central-State GST jurisdictional overlap should affect disposal of this case.
  3. Whether the matter should be remanded for a fresh order rather than decided finally on the jurisdiction question.

Petitioner's Arguments

  • Sought quashing of Order-in-Original No.36/AC/GST/2024 dated 28.06.2024 as wholly without jurisdiction and in clear violation of statutory provisions, and a direction to the respondent to pass a fresh order after considering the petitioner's replies and affording an opportunity of personal hearing.
  • Pointed out that the impugned demand covered a period during which the State Authority had separately inspected the petitioner's premises and issued its own show-cause notice for the assessment year 2019-20, pursuant to which the petitioner had already deposited substantial CGST and SGST amounts to the State exchequer, none of which were factored into the impugned Central order.
  • Relied on the pendency of the jurisdictional overlap issue between Central and State GST authorities before the Division Bench of the High Court in Varthaman Industries.

Respondent's Arguments

  • The learned Senior Standing Counsel for the respondent Central authority appeared and contested the writ petition, though the order does not record a substantive rebuttal to the petitioner's specific grievance about the unconsidered State-authority payments.

Court Order / Findings

  • The Court noted that the petitioner, being assessed by the respondent Central authority, was within its jurisdiction to pass the impugned order, but that there was also a prima facie overlap in jurisdiction assumed by both the Central and State GST authorities over the same tax period, with the larger jurisdictional question itself pending before a Division Bench in Varthaman Industries.
  • Where Central and State GST authorities have concurrently proceeded against the same taxpayer for an overlapping tax period, and payments made to one authority have not been factored into the other's order, the appropriate course is to set aside the order and remand it for fresh adjudication considering those payments — not to enter a final ruling on the jurisdictional overlap itself.
  • The impugned Order-in-Original dated 28.06.2024 was set aside and the matter remitted to the respondent to pass a fresh order within two months, considering the payments made by the petitioner pursuant to the procedure dated 22.08.2024, treating the impugned order as a corrigendum to the original show-cause notice.
  • The respondent was directed to hear the petitioner before passing fresh orders on merits and in accordance with law.

Important Clarification

  • Concurrent Central and State GST proceedings against the same taxpayer for an overlapping tax period, without either authority accounting for payments made to the other, is a recognised and recurring jurisdictional friction point (flagged for larger consideration in Varthaman Industries), and can independently justify setting aside an assessment order for fresh adjudication.
  • Even where a taxpayer has not filed a statutory appeal and allowed an order to attain finality, a writ court can still intervene and remand the matter where unconsidered cross-payments to another GST authority make the confirmed demand demonstrably inaccurate.

Sections Involved

  • Section 74(9), CGST Act, 2017 — confirmation of demand for tax not paid by reason of fraud, wilful misstatement or suppression of facts.
  • Sections 39, 50(1), 59 and 122(2)(b), CGST Act, 2017 — return filing, interest, self-assessment and penalty provisions applied in computing the confirmed demand.
  • Cross-empowerment/single-interface principle, CGST Act, 2017 — underlying the Central-State jurisdictional overlap flagged for consideration in Varthaman Industries.

Decision – In Favour of

Disposed of with directions, in favour of the assessee to the extent of securing a fresh, more accurate order — the impugned order was set aside and remanded rather than upheld or finally quashed.

Case Details

Court: Madurai Bench of the Madras High Court. Case No.: W.P.(MD) No. 16747 of 2025 (with W.M.P.(MD) Nos. 12705 and 12707 of 2025). Coram: Hon'ble Mr. Justice C. Saravanan. Date of Order: 23 June 2025.

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