Consolidated GST show cause notices across multiple financial years are impermissible where limitation runs year-wise.

A consolidated show cause notice under Section 74 of the CGST Act covering multiple financial years is impermissible because each financial year is a separate tax period with its own return, liability, and limitation computation. Aggregating different years collapses distinct due dates and recovery periods, so year-wise determination must be maintained. The Bombay HC followed its earlier view that such consolidation cannot be sustained. The contrary Supreme Court challenge dismissed in limine did not create merger on merits and did not alter that position. The impugned notice was quashed, with liberty to issue a fresh notice in accordance with law.

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Issues: Whether a show cause notice under Section 74 of the Central Goods and Services Tax Act, 2017 can validly consolidate multiple financial years or tax periods.

Analysis: The statutory scheme treats each financial year as a separate tax period linked to the return and recovery mechanism. Limitation for determination and recovery operates year-wise, and aggregation of different years into one notice collapses distinct due dates, distinct periods of liability, and separate limitation computations. The Court followed its earlier view that such consolidation is impermissible under Section 74 of the Central Goods and Services Tax Act, 2017. The dismissal of the contrary challenge by the Supreme Court in limine did not result in merger on merits and did not displace the subsequent view taken by the Bombay High Court.

Conclusion: A consolidated show cause notice covering multiple financial years under Section 74 of the Central Goods and Services Tax Act, 2017 is not permissible; the impugned notice was quashed, with liberty to issue a fresh notice in accordance with law.

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