2024 (9) TMI 1347 - HC - GST

Consolidation of show cause notices for multiple tax years under the CGST Act found procedurally impermissible, notice quashed

Challenge concerns consolidation of show cause notices across multiple financial years under the CGST Act; court reasoned that statutory time limits for ... Show cause notice under Section 73 of the CGST Act - Consolidation of assessment years in show cause notice - Separate limitation period for each assessment year - Time-limit under Section 73(10) of the CGST Act - Quashing of consolidated notice and liberty to issue separate noticesShow cause notice under Section 73 of the CGST Act - Consolidation of assessment years in show cause notice - Separate limitation period for each assessment year - Time-limit under Section 73(10) of the CGST Act - Validity of a single consolidated show cause notice grouping tax periods 2017-18 to 2020-21 under Section 73 of the CGST Act. - HELD THAT: - The Court held that the practice of issuing one common show cause notice by grouping multiple assessment years is impermissible under Section 73 of the CGST Act. Reliance was placed on the principle that where assessments relate to different assessment years, each assessment must be treated independently; the time-limits and actions mandated by Section 73, read with Section 73(10) which prescribes the time-limit from the due date for furnishing the annual return for the relevant financial year, apply separately to each year. Applying these principles, the Court concluded that consolidating distinct assessment years into a single show cause notice contravenes the statutory scheme and established precedents and therefore rendered the consolidated notice invalid. The Court nonetheless clarified that the respondent is not precluded from issuing separate show cause notices for each assessment year in compliance with Section 73.The consolidated show cause notice for the tax periods 2017-18 to 2020-21 was quashed; respondent may issue separate notices for each assessment year in accordance with law.Final Conclusion: Writ petition allowed; the consolidated show cause notice dated 03.05.2024 for 2017-18 to 2020-21 is quashed, subject to the respondent's liberty to issue separate, year-wise show cause notices complying with Section 73 of the CGST Act, 2017. The petitioner challenged a show cause notice and order issued by the respondent for tax periods 2017-18 to 2020-21, citing improper consolidation of multiple tax periods. The court found the consolidated notice flawed, ruling in favor of the petitioner. The court quashed the impugned notice and allowed separate notices to be issued for each assessment year in compliance with the CGST Act.