The Court held that the State officer must examine whether its Rs. 2.31 crore ITC demand overlaps with earlier notices issued by DGGI and the CGST authorities for the same period.
The Bombay High Court has set aside an order disallowing ITC of Rs. 2,31,32,804 for FY 2021-22 with a penalty of Rs. 23,14,806, because the State tax officer did not deal with the taxpayer’s contention that the demand overlapped with proceedings already initiated by central authorities [Kairav Chemofarbe Industries Ltd. v. State of Maharashtra & Ors.].
The bench of Justices M.S. Karnik and Sandesh D. Patil noted that the DGGI had issued a notice on 07.12.2023 proposing to deny ITC of about Rs. 2.04 crore for October 2017 to March 2021, and the CGST Assistant Commissioner had issued another on 11.08.2025 proposing denial of Rs. 37.51 lakh for April 2021 to March 2022. The State notice dated 10.09.2025 then covered the same April 2021 to March 2022 period.
The petitioner argued that the State proceedings were barred under Section 6(2)(b) of the CGST/MGST Act and were inconsistent with the guidelines in paragraph 97 of the Supreme Court’s decision in Armour Security (India) Ltd. v. Commissioner, CGST, Delhi East.
Finding that the order dated 18.12.2025 did not examine the overlap contention at all, the Court remanded the matter for fresh adjudication, permitting the petitioner to file additional submissions and keeping all contentions on merits open.
2026-juristway.com-3118-HC(Bombay)-GST
