Tax period specificity prevents consolidated show-cause notices across years; notice quashed and reissue allowed only in strict compliance.

The note addresses whether a single consolidated show-cause notice under Section 74 CGST can cover multiple financial years/tax periods. It explains that the CGST framework allocates tax liability to discrete tax periods tied to returns and applies year-wise limitation rules, and that prior Division Bench rulings support assessment and recovery on a year-wise basis. It concludes that Section 74 contains no provision permitting clubbing of multiple financial years-even where fraudulent availment of input tax credit is alleged-so consolidated notices are impermissible; the impugned notice was quashed, with liberty to re-issue notices only in strict conformity with Section 74.

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Issues: Whether a single consolidated show cause notice under Section 74 of the Central Goods and Services Tax Act, 2017 covering multiple financial years/tax periods (including cases alleging fraudulent availment of input tax credit) is permissible.

Analysis: The Court analysed the statutory scheme of the CGST Act, 2017 which ties tax liability to specific tax periods determined by returns (monthly or annual) and prescribes year-wise limitation for issuance of assessment orders (Sections 73(10) and 74(10)). The Court considered prior Division Bench decisions of this Court (Milroc Good Earth Developers and Rite Water Solutions) which held that the statute contemplates assessment and recovery on a year-wise basis and that consolidating different financial years in a single show cause notice aggregates distinct tax periods having different due dates and limitation timelines. The Court distinguished the contrary view expressed by another High Court on the basis that the Supreme Court had dismissed the related SLP in limine and had not decided the issue on merits, and reaffirmed that Section 74 contains no provision allowing clubbing of multiple financial years even where fraudulent availment of input tax credit is alleged. The Court nevertheless granted liberty to the revenue to re-issue notices strictly in terms of Section 74 if legally permissible.

Conclusion: The petition is partly allowed; the show cause notice dated 28/09/2025 is quashed and set aside, and the respondents are permitted to re-issue notices only in strict conformity with the provisions of Section 74 of the Central Goods and Services Tax Act, 2017.

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