Bunching of show cause notices under Section 73 found impermissible, directs splitting and separate adjudication per year

Bunching of show cause notices was questioned on whether a single combined notice for multiple years aligns with the principle that each assessment year has an independent limitation and can be dissected for separate taxation; the reasoning relied on authority establishing that items spanning different assessment years must be separable and limitation for each year runs independently, rendering consolidated notices contrary to that principle, and resulting in quashing of the bunching practice with directions to split the notices and proceed with separate adjudication for each year.

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Issues involved:
The petitioner sought a Writ of Mandamus to direct the respondent to consider and pass orders on a representation before adjudicating a show cause notice. The main contention was the issuance of bunching of show cause notices for multiple assessment years, which the petitioner argued was impermissible under Section 73 of the CGST Act, 2017.

Analysis of the Judgment:
The petitioner's Senior Counsel argued that bunching of show cause notices violates Section 73 of the Act, which specifies a three-year limitation period for determining tax due for each financial year. The counsel contended that extending this period through bunching of notices would set a bad precedent and circumvent the statutory limitation.

The Senior Counsel further referenced a GST council meeting's decision to extend limitation periods separately for each financial year, emphasizing the need to adhere to specific timelines for assessments. The counsel also cited legal precedents to support the argument against bunching of show cause notices.

In response, the Standing Counsel for the respondents contended that there was no explicit prohibition on issuing bunching of notices under Section 73. However, the Court found merit in the petitioner's argument that bunching was contrary to the spirit of the Act and could lead to circumvention of statutory timelines.

The Court held that issuing bunching of show cause notices for multiple assessment years was impermissible and ordered the respondent to consider the petitioner's representation and pass separate adjudication orders for each year. The Court also extended the time period for passing the adjudication order for the Assessment Year 2017-18, excluding the period of stay granted by the Court.

In conclusion, the Court quashed the issuance of bunching of show cause notices and directed the respondent to defer all proceedings until the representation for splitting up the notices was disposed of. The Writ Petition was disposed of with these observations, and no costs were awarded.

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