single assessment order for multiple year demand in a single SCN

[Sudhir Kumar]

Whether law strict to issue single assessment order for multiple year demand in a single SCN?

[YAGAY and SUN]

Great question — this touches on a nuanced area of natural justice and assessment procedures under Service Tax (legacy regime) and GST.

🔍 Can a Single Assessment Order Cover Multiple Years Based on One SCN?

✅ Service Tax Regime (pre-GST):

• Under Section 73 of the Finance Act, 1994 (for non-fraud cases) and Section 73A/74 (for fraud/suppression cases), a Show Cause Notice (SCN) can cover multiple years if proper details and reasoning are provided.
• Courts have upheld single SCNs for multiple periods provided:
  • Each period's alleged non-compliance is clearly identified.
  • The assessee is given a reasonable opportunity to respond on each year separately.
  • The final assessment/adjudication order also deals with each year distinctly.

📌 Important Principle:

What is prohibited is a vague omnibus demand across years without clear justification per period. But a composite SCN and order is legally permissible if properly structured.

✅ GST Regime:

Under the CGST Act, 2017:

📜 Relevant Sections:

• Section 73 – for non-fraud cases
• Section 74 – for fraud/suppression cases

🧾 Key Points:

• SCNs can cover multiple financial years or tax periods.
• Rule 142(1)(a) of CGST Rules allows issuance of a consolidated SCN (Form DRC-01).
• Final order is issued in DRC-07 — again, a single order may cover multiple periods, provided it is reasoned and period-wise structured.

💡 Courts have generally held that multiple demands in one order are not invalid per se, unless they violate:

• Principles of natural justice
• Or fail to provide clear basis of demand year-wise or period-wise

⚖️ Judicial Viewpoints (Key Cases):

✅ Service Tax:

• CCE vs Brindavan Beverages Ltd. [2007 (6) TMI 4 - SUPREME COURT]

Demand is invalid if the SCN is vague and does not provide specific reasons per year or transaction.

• CCE vs Shree Rajasthan Syntex [2016-TIOL-2606-CESTAT-DEL]

Composite SCNs covering multiple years are valid if reasons per year are clearly articulated.

✅ GST:

• Madras High Court – M/s. D. Gopi vs ACST (W.P. No. 29847 of 2022)

Held that composite demand orders are permissible under Section 73/74, if proper hearing and clarity are ensured.

🧾 Summary:

Aspect	Service Tax	GST
SCN for multiple years	✅ Allowed if period-wise basis is disclosed	✅ Allowed via DRC-01; must explain each period
Single assessment order	✅ Valid if reasoned and structured	✅ Permitted under Section 73/74, subject to fair hearing
Natural justice concerns	❌ Invalid if vague or fails to provide clear reasoning	❌ Invalid if arbitrary or without opportunity of reply
Judicial view	Supports single SCNs if detailed	Same view — composite order valid if fair and justified

✅ Conclusion:

Yes, the law permits a single SCN and a consolidated assessment order for multiple years, both under Service Tax and GST, provided that:

• Each year or tax period is clearly explained,
• The noticee is given fair opportunity to respond to each charge,

And the order is reasoned and structured period-wise.

***

[KASTURI SETHI]

Law does not restrict to issue single assessment order for multiple years. It is a interpretation issue only (not dispute). The tax payer who is weak on merits, resort to such interpretation. There are contradictory case laws. Some are in favour of tax payers and some are in favour of the department.

Better approach is to contest on merits only.

AI Summary

Single assessment order permissible when period-wise reasoning and fair opportunity to respond are provided and recorded.
A consolidated SCN and single adjudication order for multiple tax periods is permissible under the service tax and GST regimes only if each period is separately identified and reasoned, the noticee is given a reasonable opportunity to respond on each period, and the final order deals with each period distinctly; omnibus or vague multi period demands that lack period wise justification or deny fair hearing contravene natural justice.