2026 (1) TMI 484 - HC - GST

Composite GST show cause notice clubbing multiple tax years u/ss73/74 held invalid; notice and resulting orders quashed.

Clubbing multiple tax periods/financial years in a single/composite show cause notice under ss. 73/74 of the CGST/KGST Acts was the dominant issue. ... Legality of Single/ Composite Show cause notice of multiple tax periods/ financial - clubbing/consolidation/bunching/combining Of Show cause notice - HELD THAT:- The issue in controversy involved, which has already been held to be invalid and illegal by this Court in M/s Pramur Homes And Shelters’s case [2025 (12) TMI 1188 - KARNATAKA HIGH COURT], held that- ' answered in favour of the petitioner/tax payer/assessee by holding that clubbing/ consolidation/ bunching/ combining of multiple tax periods/financial years in a Solitary/Single/Composite Show cause notice issued under Section 73/74 of the CGST/KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST/KGST Act. ' Petition is hereby allowed and disposed of. The impugned Show Cause Notice dated 24.11.2021 at Annexure-A1, Addendum to Show Cause Notice dated 29.05.2023 at Annexure-A2, letters dated 04.10.2023 and 09.10.2023 at Annexures-B1 and B2 as well as order dated 23.10.2023 at Annexure-J and Order-in-Original dated 03.02.2025 at Annexure-K and all further proceedings, orders, notices etc., pursuant thereto initiated/to be initiated by the respondents are hereby quashed. Issues: (i) Whether clubbing/consolidation/bunching/combining of multiple tax periods/financial years/block periods in a single/composite show cause notice under Sections 73/74 of the CGST/KGST Act or Section 67(10) of the GST Act, 2017 is permissible and valid in law; (ii) Whether the impugned show cause notices, addenda, letters and consequential orders in the present petition warrant quashing on that ground.Analysis: The issue of law concerning the permissibility of issuing a solitary/composite show cause notice covering multiple tax periods was examined in light of the binding reasoning and conclusions in M/s Pramur Homes And Shelters v. Union of India (WP No.33081/2025 dated 11.12.2025), which formulated and decided the question whether multiple tax periods can be clubbed in a single notice under Sections 73/74 of the CGST/KGST Act. Applying that precedent to the present petition, the impugned instruments (the show cause notice dated 24.11.2021, addendum dated 29.05.2023, letters dated 04.10.2023 and 09.10.2023, order dated 23.10.2023 and Order-in-Original dated 03.02.2025) were considered in relation to the legal principle on consolidation of assessment periods and the scope of power conferred by the cited statutes. The analysis preserves the respondents' statutory right to initiate fresh proceedings in accordance with law if done lawfully.Conclusion: The legal issue of clubbing multiple tax periods in a single/composite show cause notice is answered against the validity of such clubbing and in favour of the assessee; the impugned show cause notice dated 24.11.2021, its addendum dated 29.05.2023, the specified letters and consequent orders including the order dated 23.10.2023 and Order-in-Original dated 03.02.2025 are quashed. The respondents are granted liberty to initiate appropriate proceedings in accordance with law, and the petitioner is entitled to contest any such proceedings.Ratio Decidendi: A solitary or composite show cause notice that clubs or consolidates multiple tax periods/financial years into a single proceeding under Sections 73/74 of the CGST/KGST Act or Section 67(10) of the GST Act, 2017 is illegal and without jurisdiction, rendering the notice and all consequent proceedings voidable and subject to quashing while preserving the authority's right to initiate separate proceedings lawfully.