In a significant ruling, the Orissa High Court has clarified that only one valid GST assessment order can exist for the same financial year. The decision came in the case of Palem Ashok Reddy vs. Commissioner, GST & CX Commissionerate, Rourkela (W.P.(C) No. 15481 of 2025).
Background of the Case
The case involved two separate assessment orders issued for the same tax period, creating legal confusion. The first order, an ex parte assessment, was passed by the Rourkela Commissionerate on July 2, 2024, demanding service tax amounting to over ₹5.76 crore for the financial years 2015-16 and 2016-17.
However, the taxpayer, Palem Ashok Reddy, challenged this order, stating that he never received any notice regarding the assessment proceedings. His claim was supported by records from the postal department confirming that the notice could not be delivered as the addressee was untraceable.
Interestingly, a second assessment order for the same period was passed by the Nashik Commissionerate on July 12, 2024, after the taxpayer duly participated in the assessment process and presented his case.
Key Observations by the Orissa High Court
The Orissa High Court, after thoroughly examining the facts and hearing both parties, ruled that:
- Only one valid and operative assessment order can legally exist for the same tax period and subject matter.
- An assessment order passed on merits, after giving the taxpayer an opportunity to present evidence and arguments, shall take precedence.
- The ex parte order from Rourkela was issued without proper service of notice, violating the principles of natural justice.
- Such an order, issued in the absence of notice and opportunity to be heard, is deemed without jurisdiction and a nullity in the eyes of law.
Court’s Final Verdict
The Orissa High Court quashed the ex parte order dated July 2, 2024, passed by the Rourkela Commissionerate. The Court upheld the validity of the subsequent order dated July 12, 2024, issued by the Nashik Commissionerate, as it followed due process and considered the submissions made by the taxpayer.
Conclusion
This ruling reinforces that tax authorities cannot issue multiple assessment orders for the same period and subject matter. If such orders exist, only the one passed following proper legal procedures and after granting the taxpayer an opportunity to be heard will be considered valid.
Implications for Taxpayers
Taxpayers facing multiple assessment orders for the same period should be aware of their rights and can challenge any ex parte orders passed without proper notice. The ruling upholds the importance of natural justice, ensuring fair hearing and due process in tax assessment proceedings.