Composite GST show cause notices for separate assessment years are unsustainable where they suggest a pre-judged liability.

A composite GST show cause notice covering multiple assessment years was held unsustainable because each year required separate adjudication, and the notice was set aside. The notice was also found objectionable because its language suggested a pre-determined view on registration, tax and penalty liability, contrary to the requirement that a show cause notice must only propose action and leave the final decision to the adjudicating authority after considering the reply and documents. The authority was permitted to proceed afresh by issuing separate notices for the relevant years and deciding the matter on proper consideration of materials and objections.

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Issues: (i) Whether a composite show cause notice issued for multiple assessment years under the GST enactments was sustainable; (ii) whether the notice disclosed a pre-determined conclusion on registration and liability so as to vitiate the proceedings.

Issue (i): Whether a composite show cause notice issued for multiple assessment years under the GST enactments was sustainable.

Analysis: The notice was issued under section 63 and covered multiple assessment years in one proceeding. The legal position applied was that a composite notice for distinct assessment years is not maintainable where separate adjudication is required for each year.

Conclusion: The composite notice was not legally sustainable and was liable to be interfered with in favour of the petitioner.

Issue (ii): Whether the notice disclosed a pre-determined conclusion on registration and liability so as to vitiate the proceedings.

Analysis: The language of the notice suggested that the authority had already formed a conclusive view on the petitioner's obligation to register and on tax and penalty liability. A show cause notice must only propose action and must leave the final decision to the adjudicating authority after considering the reply and documents. Such a notice must not create the impression of a closed mind or prejudged opinion.

Conclusion: The notice was found to be objectionable to that extent, but no separate final adjudication on registration was made in view of the broader interference granted.

Final Conclusion: The impugned notice was set aside, and the authority was permitted to proceed afresh by issuing separate notices for the relevant assessment years and by deciding the matter after proper consideration of the materials and objections in accordance with the applicable circular and fair procedure.

Ratio Decidendi: A show cause notice under the GST law must not combine separate assessment years into one composite notice, and it must not disclose a pre-judged conclusion on liability; the final determination must follow a fair consideration of the taxpayer's reply and documents.

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