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. Relying on its binding precedent, the HC held that such consolidation/bunching is contrary to the statutory scheme, impermissible, and without jurisdiction or authority of law, rendering the notice illegal and invalid. Consequently, the writ petition was allowed; the composite show cause notice, its addendum, consequential communications, the adjudication order and order-in-original, and all further proceedings pursuant thereto were quashed.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether clubbing/consolidation/bunching/combining of multiple tax periods/financial years/block periods in a single/composite show cause notice under the CGST/KGST Act is permissible and valid in law.

(ii) Whether, upon finding such clubbing impermissible, the impugned composite show cause notice and consequential addendum, letters, and orders (including the adjudication order/order-in-original) are liable to be quashed, while reserving liberty to initiate fresh proceedings in accordance with law.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Validity of a single/composite show cause notice covering multiple tax periods/financial years/block periods

Legal framework (as discussed by the Court): The Court treated the controversy as governed by the principles applied to show cause notices issued under Section 73/Section 74 of the CGST/KGST Act, as laid down in an earlier decision of the same Court, and applied that holding to the present matter.

Interpretation and reasoning: The Court held that the decisive question was directly covered by the earlier ruling, which had conclusively determined that a solitary/single/composite show cause notice cannot validly encompass multiple tax periods/financial years. The Court adopted the earlier conclusion that such clubbing/consolidation is illegal, invalid, impermissible, and without jurisdiction/authority of law, being contrary to the scheme of the CGST/KGST Act as applied in that precedent.

Conclusion: Clubbing/consolidation/bunching/combining of multiple tax periods/financial years/block periods in a single/composite show cause notice is impermissible in law and vitiates the notice.

Issue (ii): Consequence-quashing of composite notice and all proceedings/orders pursuant thereto; liberty to proceed afresh

Legal framework (as discussed by the Court): Having applied the earlier binding determination on invalidity of composite notices, the Court treated all actions taken pursuant to such notice as consequential proceedings liable to fall with the notice.

Interpretation and reasoning: Since the impugned controversy "relates to" the impermissible clubbing of multiple periods in a single/composite show cause notice, the Court held that the impugned show cause notice, its addendum, related letters, and subsequent orders "deserve to be quashed" as they are founded on an invalid notice and are therefore vitiated. At the same time, consistent with the applied precedent, the Court reserved liberty to the authorities to initiate appropriate proceedings in accordance with law, and correspondingly preserved the taxpayer's right to contest/defend such fresh proceedings.

Conclusion: The composite show cause notice and the addendum, connected letters, and the impugned orders (including the adjudication/order-in-original), along with all further proceedings pursuant thereto, were quashed. Liberty was reserved to initiate fresh proceedings strictly in accordance with law, with entitlement to the taxpayer to contest/defend in accordance with law.

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