Section 74 GST notices cannot consolidate different financial years; consolidated demand proceedings were quashed.

Under the CGST Act, a Section 74 notice must align with the year-wise tax period structure and the separate limitation scheme applicable to each period. The Bombay HC held that distinct financial years or tax periods cannot be clubbed into one consolidated proceeding for proposing demand and recovery, because liability and the order timeline are tied to the relevant tax period and annual return due date. Applying that principle, the impugned consolidated notice and consequential order were quashed, while the revenue was left free to proceed afresh in accordance with law.

---

---

Issues: Whether a show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017 can consolidate multiple financial years or tax periods for the purpose of proposing demand and recovery.

Analysis: The statutory scheme treats tax liability with reference to the relevant tax period and links demand and recovery to the due date for furnishing the annual return for that period. The limitation prescribed for passing orders under Sections 73 and 74 operates year-wise, and a single notice covering different financial years would aggregate distinct tax periods with separate statutory timelines. The Court followed earlier Bombay High Court decisions holding that there is no scope for consolidating various financial years or tax periods in a notice under Section 74 of the Central Goods and Services Tax Act, 2017.

Conclusion: The clubbing of multiple financial years or tax periods in the impugned notice was impermissible, and the notice and consequential order were quashed.

Final Conclusion: The petition succeeded to the extent of invalidating the consolidated proceedings under Section 74, while leaving the respondents free to proceed afresh in accordance with law.

Ratio Decidendi: A notice under Section 74 of the Central Goods and Services Tax Act, 2017 must conform to the year-wise tax period structure and limitation scheme of the Act and cannot validly consolidate distinct financial years or tax periods into one proceeding.

---