Year-wise Section 74 adjudication under GST protects defence time and avoids prejudice from composite notices.

Section 74 of the CGST Act is framed year-wise, because notice, determination and adjudication relate to the specific financial year of the alleged short payment or wrongful availment, and the limitation under Section 74(10) runs separately from the annual return due date for each year. A consolidated notice spanning multiple financial years may compress the effective defence and adjudication period for later years and create a combined demand and appeal burden inconsistent with that structure. On that reasoning, separate year-wise adjudication is permissible and appropriate, and a composite notice is not required by the statute.

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Issues: Whether a consolidated show cause notice under Section 74 of the Central Goods and Services Tax Act, 2017 covering multiple financial years is permissible, and whether such a composite notice and consequential adjudication prejudices the assessee by curtailing the statutory period available for defence and adjudication for later years.

Analysis: Section 74 contemplates notice, determination and adjudication with reference to the particular financial year to which the alleged tax short-payment or wrongful availment relates. The time limit for passing the order under Section 74(10) runs from the due date for furnishing the annual return for each relevant financial year, so the adjudicatory period may differ from year to year. A consolidated notice covering several years may therefore compress the effective time available to the assessee in relation to later years and also lead to a combined demand and appeal burden that is inconsistent with the year-specific scheme of the provision. The year-wise structure of Section 74 is materially different from regimes such as Section 28 of the Customs Act, 1962 and Section 11A of the Central Excise Act, 1944, where composite notices operate within a different limitation framework.

Conclusion: A composite notice covering multiple financial years under Section 74 is not mandated by the statute and may prejudice the assessee by truncating the effective statutory period for later years; separate year-wise adjudication is permissible and appropriate. The issue is answered in favour of the assessee.

Final Conclusion: The writ appeal failed, and the view taken in the writ petition was sustained on the year-wise application of Section 74 and the need to avoid prejudice from a consolidated notice spanning multiple financial years.

Ratio Decidendi: Where the statutory limitation for adjudication is linked to each individual financial year, a consolidated notice spanning multiple years cannot be used to curtail the assessee's effective statutory opportunity for the later years, and year-wise adjudication is the proper course.

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