Single show-cause notice consolidating multiple GST periods held unauthorized despite administrative circulars; five-year composite notice quashed

Whether adjudicating authority may issue a single show-cause notice under s.74 CGST consolidating multiple financial years/tax periods. Relying on prior Division Bench authority, the court held there is no statutory scope to aggregate distinct assessment years into one composite notice; administrative circulars inconsistent with the statutory scheme are ineffectual. Consequence: the composite show-cause notice consolidating five years lacked jurisdiction and was set aside, and the petition was allowed.

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Issues: Whether a show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017 that consolidates multiple financial years / tax periods (July 2017 to March 2022) is permissible, and whether the impugned composite notice dated 4/8/2024 must be quashed.

Analysis: The statutory scheme prescribes tax liability tied to specific tax periods (monthly or annual returns) and contains limitation provisions for issuance of assessment orders (see Sections 73(10) and 74(10)). The amendments and transitional provisions (including Section 74A for later years) and the requirement that assessments relate to a definite tax period indicate that show cause notices should not consolidate multiple financial years into a single notice. An administrative communication permitting composite notices is inconsistent with the statutory scheme and cannot override the statutory limits. Reliance on precedent holding there is no scope for consolidating various financial years for issuance of a show cause notice under Section 74 supports setting aside the impugned consolidated notice.

Conclusion: The impugned composite show cause notice dated 4/8/2024 consolidating five years is impermissible and is quashed; the respondents remain at liberty to re-issue notice strictly in terms of Section 74 of the CGST Act, 2017 if no other legal impediment exists.

Ratio Decidendi: A show cause notice under Section 74 of the CGST Act, 2017 must relate to a definite tax period and cannot lawfully consolidate multiple financial years into a single composite notice; consolidation of separate tax periods for a single Section 74 notice is impermissible under the statutory scheme and limitation provisions.

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