M/s Nabati Food (India) Private Limited vs. Assistant Commissioner of Central Tax & Central Excise & Ors. (W.P. No. 42823 of 2025
High Court of Madras)

1. Brief Facts

The petitioner challenged:
- Order dated 27.02.2025 passed under Section 73 of the CGST/TNGST Act for FY 2020–21; and
- Rectification rejection order dated 26.08.2025 passed under Section 161.
The petitioner contended that:
- An earlier adjudication order dated 03.02.2025 had already covered the composite period 2017–2018 to 2021–2022
- The amount relating to alleged excess ITC (difference between GSTR-3B and GSTR-2A) forming part of the earlier order was again included in the impugned order dated 27.02.2025
- Specifically, excess ITC of ₹1,08,39,873/- in the earlier order was reflected again (with marginal variation ₹1,08,28,252/-) in the later proceedings
The petitioner filed a rectification application dated 27.05.2025 under Section 161, which was rejected on 26.08.2025.

The core issue was whether prima facie duplication of ITC demand required reconsideration under Section 161.

2. Important Key Takeaways

(A) Prima Facie Duplication Noted

The Court observed that on perusal of the earlier order dated 03.02.2025 and the impugned order dated 27.02.2025, there appeared to be prima facie duplication of demand relating to excess ITC availed vis-à-vis GSTR-2A data.

(B) Rectification Should Have Been Examined

The Court held that this aspect ought to have been examined under Section 161, especially when a specific rectification request had been made by the petitioner.

(C) Matter Remitted with Directions

The authority was directed to reconsider the rectification application dated 27.05.2025 within 30 days.
If an adverse order is passed, the petitioner may file a consolidated appeal within 30 days.

3. Author’s Comment – Business Impact

This judgment is significant for taxpayers facing overlapping or repeated ITC demands.

Practical Implications:

Authorities must carefully examine duplication allegations before rejecting rectification applications.
Section 161 can be invoked where there is apparent overlapping demand between multiple adjudication orders.
Businesses should closely reconcile multi-year adjudication orders to identify overlapping ITC demands.
The ruling prevents mechanical confirmation of repeated demands and reinforces procedural fairness.

This decision strengthens safeguards against double taxation through administrative oversight.

The Madras High Court held that prima facie duplication of ITC demand across multiple adjudication orders warrants reconsideration under Section 161 of the GST Act. The rectification rejection order was set aside and the matter remitted for fresh examination.