Clubbing of show-cause notices under GST violated tax period principle, leading to quashing and separate yearly proceedings.

Clubbing of show-cause notices across multiple financial years was held to violate the tax period principle because the impugned order covered 2022-23 to 2025-26, and was therefore held to lack jurisdiction and quashed. The court further found notices issued under the omitted provisions were inapplicable from 01.04.2024, requiring application of the substituted statutory regime for 2024-25 onwards; the assessment was quashed for non-application of correct law. Consequential orders and the show-cause notice were set aside, with liberty to initiate separate proceedings for each financial year under the correct statutory provisions.

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Issues: (i) Whether show cause notices/orders can be clubbed and issued for more than one financial year (bunching of notices) and (ii) Whether issuance of notice/assessment under Section 73 for financial years 2024-25 and 2025-26 is permissible after omission of Sections 73 & 74 and applicability of Section 74A.

Issue (i): Whether issuance of a single show cause notice/order covering multiple financial years is permissible.

Analysis: The statutory scheme permits issuance of show cause notices linked to the tax period; where annual returns constitute the tax period, notices must be based on that annual return, or where issued before annual returns are filed, on monthly returns. The practice of clubbing notices across distinct financial years lacks statutory basis and results in proceedings without jurisdiction where multiple years are combined in one notice/order.

Conclusion: The clubbing of show cause notices/orders for more than one financial year is impermissible and such notices/orders are liable to be quashed. The Conclusion is in favour of the petitioner.

Issue (ii): Whether notices and assessment proceedings for FYs 2024-25 and 2025-26 under Section 73 are valid after Sections 73 and 74 were omitted with effect from 01.04.2024 and Section 74A applies.

Analysis: Sections 73 and 74 having been omitted with effect from 01.04.2024, the post-omission statutory regime requires reliance on Section 74A for the financial years 2024-25 onwards. Issuing notices or passing assessments under Section 73 for periods to which Section 74A applies reflects non-application of mind and lacks statutory foundation.

Conclusion: Issuance of notice/assessment under Section 73 for FYs 2024-25 and 2025-26 is impermissible; those parts of the proceedings are quashed. The Conclusion is in favour of the petitioner.

Final Conclusion: The impugned assessment order and consequential orders are quashed for lack of jurisdiction arising from clubbing of multiple financial years and for being founded on provisions omitted by statute; the respondents are permitted to initiate separate proceedings for each financial year in accordance with the applicable statutory provision.

Ratio Decidendi: Show cause notices and assessment orders must be issued in accordance with the tax period specified by law and cannot be clubbed across multiple financial years; where statutory amendments omit prior provisions, proceedings must be founded on the provisions in force for the relevant financial year (Section 74A for post-01.04.2024 periods).

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