Demand of tax after voluntary ITC reversal, amounts to double taxation; no interest where sufficient balance exists in E-Credit Ledger

Last updated: 09 June 2026

Save Share

Quick Summary

The Orissa High Court has ruled that demanding tax on input tax credit (ITC) that was already voluntarily reversed by a taxpayer amounts to double taxation and is unlawful. The court also stated that interest under Section 50 of the CGST Act is not payable if there is a sufficient balance in the Electronic Credit Ledger. Furthermore, penalties under Section 74 are deemed unsustainable if there's no evidence of fraud or wilful misstatement.

Court :
Orissa High Court

Brief :
The Hon’ble Orissa High Court in the case of Manoja Kumar Nayak &Anr. v. Commissioner, GST & Central Excise & Ors. [W.P.(C) No. 12682 of 2025 & W.P.(C) No. 12686 of 2025, order dated April 08, 2026] held that raising demand of tax equivalent to input tax credit already voluntarily reversed prior to issuance of show cause notice amounts to double taxation and is without authority of law; further, no interest under Section 50 is payable where sufficient balance exists in the Electronic Credit Ledger, and penalty under Section 74 is unsustainable in absence of fraud or wilful misstatement.

Citation :
W.P.(C) No. 12682 of 2025 & W.P.(C) No. 12686 of 2025, order dated April 08, 2026

Daily Limit Reached

You have reached your daily limit of 2 Free Judgements

Subscribe to CCI PRO for unlimited access

Why Upgrade to CCI PRO?

No Ads
WhatsApp Community
Daily E-Newsletter
Unlimited Judgements Access
Profile Visitors
Link Social Profiles
Featured Job Posts
Pro Badge
Expert GST Guidance
Unlimited Forum Replies
Download Content in PDF

1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

BEST VALUE

3 Years PLAN

4999

(Excl. of GST ₹899)

View all CCI PRO benefits

Already a PRO member? Login here for an ad-free experience. 07941056694

Attached File : 671907_6005_manoja_kumar_nayak.pdf

downloaded 109 times

123 Views Comment Share GST Report

Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

View Judgements

Comments