Clubbing of multiple tax periods in a single show cause notice deemed defective, leading to quashing of adjudication orders

Clubbing multiple tax periods into a single show cause notice was held defective on the precedent cited, because the notice aggregated annual adjudications across distinct tax years; as a result the adjudication for the specified periods was set aside and the impugned notices and forms were quashed. The decision permits the revenue the liberty to initiate fresh proceedings, but only in accordance with law and without relying on the defective composite notice.

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Issues: (i) Whether clubbing/consolidation/bunching/combining of multiple tax periods/financial years into a single/composite show cause notice under Sections 73/74 of the GST laws is permissible; (ii) Whether the impugned show cause notices, adjudication order and consequential proceedings relating to multiple tax periods are liable to be quashed.

Analysis: The Court examined the validity of issuing a solitary/composite show cause notice covering multiple tax periods/financial years under the GST adjudicatory provisions, having regard to Sections 73 and 74 of the CGST/IGST framework and related provisions concerning assessment and adjudication. The Court relied on and applied the reasoning in the coordinate decisions (M/s Pramur Homes And Shelters and M/s Lakshmi Venkateshwara Traders) holding that consolidation of distinct tax periods into one composite show cause notice violates the statutory scheme and exceeds the authority conferred by the GST provisions. The Court further considered the effect of a defective show cause notice on the consequent order-in-original, statutory forms (GST-DRC-07, GST-DRC-01) and further proceedings, and whether respondents should be left free to initiate fresh proceedings in accordance with law.

Conclusion: (i) Clubbing/consolidation/bunching/combining of multiple tax periods/financial years in a single/composite show cause notice under Sections 73/74 of the CGST/IGST Act is invalid and impermissible. (ii) The impugned show cause notices dated 31.03.2022 (Annexures-F and F1), the Order-in-Original dated 31.12.2024 (Annexure-L), Form GST-DRC-07 dated 16.01.2025 (Annexure-L1), Form GST-DRC-01 dated 05.08.2024 (Annexure-G) and all consequential proceedings are quashed. The respondents are granted liberty to initiate appropriate proceedings in accordance with law.

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