2025 (1) TMI 518 - HC - GST

Single show cause notice covering multiple financial years for wrongful ITC availment held valid under Section 74(1)

M/s. RioCare India Private Limited Versus Assistant Commissioner CGST and C. Ex. & Ors.

The Bombay HC disposed of a writ petition challenging a single show cause notice (SCN) issued for multiple financial years regarding wrongful availment of ... Issuance of one SCN for multiple years - petitioner argued that separate notices should have been issued for each financial year within this period - wrongful availment of ITC - HELD THAT:- There is nothing in Section 74 and more particularly 74 (1) which would prohibit the Authority from issuing a notice calling upon the assessee to pay tax that has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised, by reason of fraud, or any wilful misstatement or suppression of facts to evade tax. At least prima facie, a notice under Section 74 (1) can be issued for any period provided said notice is given at least 6 months prior to the time limit specified in sub-section (10) of Section 74 for issuance of the order. In the present case, admittedly there is no issue of limitation as contemplated under Section 74(10). In these circumstances, at least prima facie we are not satisfied that this Writ Petition ought to be entertained and which is challenging the show cause notice. The Petitioner will have to face the show cause notice and can canvass all arguments before the authority concerned, including the issues raised in the present Writ Petition. Petition disposed off. In the case before the Bombay High Court, the petitioner sought a Writ of Certiorari to quash a show cause-cum-demand notice issued under Section 74 of the Central Goods and Services Tax Act, 2017. The notice covered the period from 1st July 2018 to 31st March 2023. The petitioner argued that separate notices should have been issued for each financial year within this period.The court, comprising Justices B. P. Colabawalla and Firdosh P. Pooniwalla, was not persuaded by the petitioner's argument. The court noted that Section 74, particularly subsection (1), does not prohibit the issuance of a single notice covering multiple financial years, provided it is issued at least six months before the time limit specified in Section 74(10) for issuing the order. Since there was no issue of limitation under Section 74(10) in this case, the court found no prima facie reason to entertain the writ petition challenging the show cause notice. The petitioner was advised to address their arguments before the concerned authority.The writ petition was disposed of without an order as to costs, and it was noted that the order would be digitally signed and could be acted upon via fax or email.