TaxTMI 
TaxTMI 
TaxTMI 
In order to ensure that this series not only aims at some improvement in the quality of orders being passed across India on GST matters, which ultimately reduces litigation to some small extent, it is also aimed to address specific issues so that taxpayers as well as tax professionals who face identical issues may take some advantage of this hard work. Accordingly, this article is dedicated to the issue of composite Show Cause Notice.
Imagine a situation where a taxpayer, just to reduce his workload, attempts to file two annual GST returns in one go, would it be possible. Take another case where a holding company wants to file the return in one go of both holding and subsidiary company, would it be possible. Then how it is possible to issue one consolidated SCN for more than one year. Almost all High Courts in India except Delhi have uniformly held that composite notice is impermissible.
But the authorities issuing SCNs see only their comfort level as well as convenience and assume that they are above the High Court rulings. Even after so many high court orders setting aside or even quashing SCN on the sole ground that composite SCN consisting of more than one year is impermissible, the officers do not bother as Delhi high court is in favor of this proposition. What is important to notice is that this is permissible only under section 74, and that too in respect of fraudulent availment of ITC only.
As already discussed, all officers across India are expected to issue SCN based on annual returns on financial year basis. As this is not happening, four orders of high courts holding that composite SCN is impermissible are discussed hereunder so as to facilitate the taxpayer to be aware of this happenings.
Case 1: In one of the most interesting case, the Bombay High Court on 09/01/2026 in the matter of M/s Paras Stone Industries, through proprietor Shri Sunil Shatrughan Mishra Versus Union of India & Ors. - 2026 (1) TMI 839 - BOMBAY HIGH COURT, not only set aside and quashed the SCN issued during September 2023 under section 74 for the period 01/07/2017 to 31/03/2020, but also proposed to impose a cost of INR 50,000/ for wasting the Court’s time on the settled issue of single SCN for multiple years is impermissible. However, cost was later dropped as the counsel of respondent tendered apology before the High court.
Case 2: The High Court of Andhra Pradesh (Division Bench) on 31/12/2025 held categorically in the matter of MADEENA STEELS Versus THE ASSISTANT COMMISSIONER OF STATE TAXES, CHITTOOR - I AND OTHERS - 2026 (1) TMI 314 - ANDHRA PRADESH HIGH COURT as below:
5. The petitioner has raised various grounds of challenge. However, the petitioner is pressing the primary ground of the order being a composite order. In that view of the matter the present Writ Petition is being disposed of on this ground of challenge, leaving open the other grounds of challenge.
6. Accordingly, this Writ Petition is disposed of, setting aside the Order of assessment, dated 29.11.2022 as well as the Order of appeal, dated 23.01.2025, leaving it open to the respondents to initiate fresh proceedings, for each assessment year separately.
Case 3: The High Court of Karnataka on 19/12/2025 in the matter of M/s. Mahashay Marketing A Sole Proprietorship And Shri Rajesh Kumar Jain Versus The Union of India Rep. Herein By The Secretary, Central Board of Indirect Taxes And Customs Rep. Herein By The Chairman, The Principal Commissioner of Central Tax, The Additional Commissioner of Central Taxes (Preventive), The Additional Commissioner of Central Taxes (Adjudication) And The Superintendent/Senior Intelligence Officer (Preventive) - 2026 (1) TMI 484 - KARNATAKA HIGH COURT ruled as ;
(i) Petition is hereby allowed and disposed of in terms of Pramur Homes And Shelters (supra).
(ii) The impugned Show Cause Notice dated 24.11.2021 at Annexure-A1, Addendum to Show Cause Notice dated 29.05.2023 at Annexure-A2, letters dated 04.10.2023 and 09.10.2023 at Annexures- B1 and B2 as well as order dated 23.10.2023 at Annexure-J and Order-in-Original dated 03.02.2025 at Annexure-K and all further proceedings, orders, notices etc., pursuant thereto initiated/to be initiated by the respondents are hereby quashed.
Case 4: The High Court of Bombay (Division Bench) on 17/01/2026 in their detailed order in the matter of M/s. Marfani Steel Impex, through its proprietor Mohammed Irfan Marfani Vs. The Principal Commissioner, Central Goods and Services Tax & Central Excise, Nagpur & Ors. - 2026 (1) TMI 1557 - BOMBAY HIGH COURT ruled as:
14] With the above liberty, and for the reasons set out in Milroc Good Earth Developers (supra) and Rite Water Solutions (India) Ltd. (supra), the petition is partly allowed. The show cause notice dated 30/5/2025 issued by respondent no.2 is quashed and set aside. The respondents, however, are at liberty to re-issue notice strictly in terms of the provisions of Section 74 of the CGST Act, if there is no other legal impediment.
15] The petition is disposed of in above terms.
No order as to costs.
Comments on 1 to 4: All the three high courts in the above four cases have uniformly as well as categorically held that issuance of single show cause notice for multiple financial years is impermissible. Hence all affected parties may take this ground as the first ground of defense in their arguments. Let us hope for some improvement on this front in future as passing invalid orders on settled issues only prove that the officer who passes that order is either ignorant of current happenings or not aware of the fact that decisions of Jurisdictional High Courts are squarely binding on him.