2024 (11) TMI 518 - HC - GST

Consolidated show-cause notices for multiple assessment years under GST quashed; separate notices must be issued per year as permitted.

Consolidating show cause notices across multiple assessment years for GST liabilities is impermissible under the CGST Act; the practice of issuing a ... Consolidation of multiple tax periods in a single show cause notice - quashing of show cause notice - limitation period applies separately to each assessment year - Section 73 of the CGST Act - requirement of separate show cause notices for each assessment yearConsolidation of multiple tax periods in a single show cause notice - Section 73 of the CGST Act - requirement of separate show cause notices for each assessment year - limitation period applies separately to each assessment year - quashing of show cause notice - Impugned notices dated 05.08.2024 purporting to group demands for multiple financial years (July 2017-2023) are vitiated and liable to be quashed. - HELD THAT: - The Court examined whether the notices at Annexures-A and B dated 05.08.2024, which consolidate tax periods from 2017 to 2023, are flawed. Relying on the co-ordinate bench decision in M/s. Bangalore Golf Club (W.P.No.16500/2024 dated 07.08.2024) and the legal principle that actions and limitation under Section 73 must be applied separately to each assessment year, the Court held that issuing a single consolidated show cause notice for multiple assessment years contravenes the statutory scheme. The Court noted that the limitation and procedure envisaged under Section 73 require distinct adjudication for each year and that established precedent supports treating assessment years independently. Consequently, the impugned consolidated notices are fundamentally flawed. The Court preserved the respondents' liberty to issue separate and independent notices for each assessment year in accordance with law. [Paras 3, 4, 5]Impugned Notices at Annexures-A and B dated 05.08.2024 are quashed; respondents may issue separate notices for each assessment year in terms of Section 73 of the CGST Act, 2017.Final Conclusion: Writ petition allowed; the consolidated show cause notices dated 05.08.2024 (Annexures-A and B) and consequent proceedings are quashed, with liberty to the respondents to issue separate notices for each assessment year under Section 73 of the CGST Act, 2017. Issues:Consolidation of demand for multiple financial years in show cause notices under the Central Goods and Services Tax (CGST) Act, 2017.Analysis:The primary issue in this case is whether the show cause notices dated 05.08.2024, which consolidated demands for multiple financial years (2017-2023), are valid under the CGST Act. The petitioner challenged the consolidation of tax periods in a single notice, arguing that separate notices should have been issued for each assessment year as per Section 73 of the CGST Act. The Court referred to a similar case involving M/s. Bangalore Golf Club where a consolidated show cause notice was deemed flawed. The Court emphasized that each assessment year must be treated independently, citing the judgment of the Hon'ble Supreme Court in State of Jammu and Kashmir and Others vs. Caltex (India) Ltd., AIR 1966 SC 1350. The Court found the consolidation of demands for multiple assessment years to be in violation of the CGST Act and legal precedents.The Court observed that Section 73(10) of the CGST Act specifies time limits for actions related to tax due, emphasizing that actions must be completed within the designated year as per legal provisions. Relying on established legal principles and precedents, the Court concluded that the respondent erred in issuing consolidated show cause notices covering multiple assessment years. Consequently, the Court quashed the impugned show cause notices dated 05.08.2024 and directed the respondent to issue separate notices for each assessment year in compliance with Section 73 of the CGST Act.The judgment in M/s. Bangalore Golf Club vs. Assistant Commissioner of Commercial Taxes was cited to support the decision to quash the impugned notices dated 05.08.2024. The Court allowed the petition, disposed of the case in line with the Bangalore Golf Club judgment, and reserved liberty for the respondents to issue separate notices for each assessment year as required by the CGST Act. The impugned notices and all subsequent proceedings were quashed, with a directive to proceed in accordance with the law by issuing separate notices for each assessment year.In conclusion, the Court's decision centered on the invalidity of consolidated show cause notices for multiple assessment years under the CGST Act, emphasizing the need for separate notices for each assessment year to comply with legal requirements and precedents.