2025 (12) TMI 1790 - HC - GST

Clubbing multiple tax periods in composite show-cause notices declared impermissible; notices quashed with liberty to reinitiate lawfully

Clubbing or consolidation of multiple tax periods/financial years into a single composite show-cause notice is impermissible; such notices lack ... Clubbing/consolidation/bunching/combining of multiple tax periods/financial years in a Single/Composite Show cause notice - quashing of Show Cause Notice and consequent proceedings - writ jurisdiction of the High Court - liberty to initiate proceedings afresh in accordance with law - HELD THAT:- The issue in controversy involved in the present petition also relates to clubbing/consolidation/bunching/combining of multiple tax periods/financial years/block periods in a Single/Composite Show cause notice, which has already been held to be invalid and illegal by this Court in M/S Pramur Homes And Shelters’s case [2025 (12) TMI 1188 - KARNATAKA HIGH COURT] held that- ' clubbing / consolidation / bunching/ combining of multiple tax periods/financial years in a Solitary/Single/Composite Show cause notice issued under Section 73 / 74 of the CGST / KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST / KGST Act. In the instant case, a perusal of the impugned Show cause notice dated 30.09.2025 will indicate that the same encompasses and pertains to multiple tax periods/financial years, viz., from 2019-20 to 2023-24, which is impermissible in law and consequently, the impugned Show cause notice and all further proceedings pursuant thereto are also vitiated and deserve to be quashed reserving liberty to the respondents to initiate any action/proceedings in accordance with law. ' Thus, the impugned show cause notices both dated 31.03.2022 at Annexures- F and F1 passed by respondent No.1 deserve to be quashed. The impugned show cause notices both dated 31.03.2022 at Annexures- F and F1 passed by respondent No.1 and all further proceedings, orders, notices etc., pursuant thereto initiated/to be initiated by the respondents are hereby quashed. Issues: Whether clubbing/consolidation/bunching/combining of multiple tax periods/financial years in a single/composite show cause notice under Sections 73/74 of the CGST Act is permissible and whether the impugned show cause notices dated 31.03.2022 (Annexures F and F1) issued under Section 74 are liable to be quashed.Analysis: The issue involves the validity of issuing a solitary/composite show cause notice encompassing multiple tax periods/financial years under Sections 73/74 of the CGST Act. The matter has been considered in light of a prior judgment in M/s Pramur Homes And Shelters (WP No.33081/2025 dated 11.12.2025) which addressed the same question and concluded that consolidation/bunching of multiple tax periods in a single show cause notice is impermissible. Applying that legal principle to the present petition, the impugned notices dated 31.03.2022 (Annexures F and F1) envelop multiple tax periods and therefore fall within the scope of the invalid practice identified in the cited decision. The respondents are, however, left with the procedural right to initiate proceedings afresh in accordance with law.Conclusion: Clubbing/consolidation/bunching/combining of multiple tax periods/financial years in a single/composite show cause notice under Sections 73/74 of the CGST Act is illegal and impermissible, and the impugned show cause notices dated 31.03.2022 (Annexures F and F1) are quashed; liberty is reserved for the respondents to initiate proceedings in accordance with law.