TaxTMI 
TaxTMI 
2025 (12) TMI 1188
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....es of natural justice, and contrary to the provisions of the CGST/KGST Acts, 2017; b) Issue a writ of prohibition or any other appropriate writ, order or direction, restraining the Respondents, their officers and subordinates from proceedings further or taking any coercive or adjudicatory steps pursuant to the impugned Show cause notice dated 30.09.2025; c) Declare that the transfer of development rights under the Joint Development Agreements executed for the projects "Pramur Aster" and "Pramur Meadows"; and the sale of developed plots and completed apartments post-completion certificate - do not constitute "supply" within the meaning of Section 7 read with Schedule III of the CGST Act, 2017, and are therefore not exigible to GST; d) Issue a writ of mandamus or any other appropriate direction restraining the Respondents, their officers, and subordinates from taking any coercive steps or adjudicatory action pursuant to the impugned Show cause notice dated 30.09.2025, pending disposal of this Writ Petition (Annexure-A) issued by the Respondent No. 4 - Additional Commissioner of Central Tax, Mysuru Commissionerate,; e) Issue any other direction or g....
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....(Karnataka). (v) Milroc Good Earth Developers v. Union of India - (2025) 179 taxmann.com 465 (Bombay). (vi) Rite Water Solutions (India) Ltd. Vs. Joint Commissioner, CGST & Central Excise, Nagpur & Ors. - W.P.No. 466/20225 (Bombay HC, Nagpur Bench). (vii) Titan Company Ltd. Vs. Joint Commissioner of GST & Central Excise - (2024) 159 taxmann.com 162 (Madras). (viii) Joint Commissioner (Intelligence & Enforcement) Vs. Lakshmi Mobile Accessories - (2025) 171 taxmann.com 214 (Kerala) (DB). (ix) Lakshmi Mobile Accessories Vs. Joint commissioner (Intelligence & Endorsement), Thiruvananthapuram - (2025) 170 taxmann.com 874 (Kerala). (x) Tharayil Medicals Vs. Deputy Commissioner, SGST Department, Thrissur - (2025) 173 taxmann.com 867 (Kerala) (DB). (xi) Tharayil Medicals Vs. The Deputy Commissioner, SGST Departmetn Thrissur - W.P.(C) No. 40063/2024. (xii) Biju Kollamparambil Abraham Vs. State Tax Officer - (2025) 34 Centax 176 (Ker). (xiii) R A and Co. Vs. Additional Commissioner of Central Taxes - (2025) 176 taxmann.com 731 (Madraas). (xiv) Instakart Services Private Limited Vs. The Additional Commis....
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....r utilised for any reason other than fraud or any willful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or....
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....anything contained in sub-section (6) or sub-section (8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a period of thirty days from the due date of payment of such tax. [(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.] Section 74. Determination of tax [, pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause a....
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....presentation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. (11) Where any person served with an order issued under sub-section (9) pays the tax along with interest payable thereon under section 50 and a penalty equivalent to fifty per cent. of such tax within thirty days of communication of the order, all proceedings in respect of the said notice shall be deemed to be concluded. [(12) The provisions of this section shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24.] Explanation 1.- For the purposes of section 73 and this section,- (i) the expression "all proceedings in respect of the said notice" shall not include proceedings under section 132; (ii) where the notice un....
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....re value or rate cannot be determined for that specific period, not for a bundle of years. Scrutiny of returns, assessment of non-filers, and assessment of unregistered persons are also period-specific. Section 65 empowers the Commissioner to conduct audits, but even this exceptional power can be exercised only "for a financial year or part thereof, or multiples thereof", always distinctly, never in a consolidated manner unless each year is separately examined. 8.6 In Chapter XV, the determination provisions make the financial-year foundation even more explicit. Sections 73(2) and 74(2) require a show-cause notice to be issued within the limitation applicable for that financial year, and Sections 73(10) and 74(10) mandate that the final order must be passed within three or five years, respectively, from the due date of the annual return for the relevant financial year. These provisions make it clear that: * The starting point for limitation is the due date of the annual return for that specific financial year when actually filed or when it should have been filed or in cases of erroneous refund, the date of such refund; * The ending point is a fixed three-year o....
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.... of the return under section 39 for the month of September, 2018 till the due date of furnishing of the return under the said section for the month of March, 2019 in respect of any invoice or invoice relating to such debit note for supply of goods or services or both made during the financial year 2017-18, the details of which have been uploaded by the supplier under sub-section (1) of section 37 till the due date for furnishing the details under sub-section (1) of said section for the month of March, 2019" 8.11 Therefore, a consolidated allegation of "wrong ITC for five years" is conceptually flawed because ITC entitlement is statutorily frozen one financial year at a time; in fact, a consolidated notice also creates substantive prejudice; each year involves different turnover, ITC positions, contracts, amendments in law, accounting treatments, and reconciliations under Sections 37, 38, 39 and 44. The assessee is entitled to give year-wise explanations, year-wise reconciliations, and year-wise legal defences. A single notice covering five years deprives the assessee of this opportunity and violates natural justice. 8.12 When the entire statutory scheme i.e., from registratio....
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....73(10) of the CGST Act mandates a specific time limit from the due date for furnishing the annual return for the financial year to which the tax due relates. The law stipulates that particular actions must be completed within a designated year, and such actions should be executed in accordance with the law's provisions. The principles enunciated in the judgment cited by the Hon'ble Supreme Court are directly applicable to the present case. 6. For the reasons aforementioned, this Court concludes that the show cause notices issued by the respondent are fundamentally flawed. The practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act and established legal precedents." 8.14 In the case of Bangalore Golf Club (supra), this Court held as under: "2. The petitioner's primary argument is that the respondent cannot issue a common show cause notice by grouping the tax periods from 2019 to 2023-24. The petitioner asserts that under Section 73 of the CGST Act, a specific action must be completed within the relevant year, and the limitation period of three years applies separately to each asses....
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.... the demand for more than one financial year i.e., for the tax period from 2017 to 2023 and as to whether the impugned Notices deserve to be quashed on this ground. The said issue came up for consideration in the case of M/s. Bangalore Golf Club vs. Assistant Commissioner of Commercial Taxes - W.P. No. 16500/2024 dated 07.08.2024, in which, the co-ordinate Bench of this Court held as under:- "In this writ petition, the petitioner, a Club, challenges the impugned show cause notice dated 07.05.2024, as detailed in Annexure-F, and the summary of the show cause notice dated 08.05.2024, as outlined in Annexure-G, issued by the respondent for the tax periods 2019-20, 2020-21, 2021-22, 2022-23, and 2023-24. The petitioner contends that these notices, issued under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, are flawed due to the improper consolidation of multiple tax periods into a single show cause notice. 2. The petitioner's primary argument is that the respondent cannot issue a common show cause notice by grouping the tax periods from 2019 to 2023-24. The petitioner asserts that under Section 73 of the CGST Act, a specific action must be complete....
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....24 are hereby quashed; (iii) This order, however, does not preclude the respondent from issuing separate show cause notices for each assessment year in compliance with Section 73 of the CGST Act, 2017." 4. As is clear from the aforesaid judgment of this Court, the issue in controversy involved in the present petition is directly and squarely covered by the aforesaid judgment and consequently, the impugned Notices deserve to be quashed by reserving liberty in favour of the respondents to issue separate / independent Notices for each assessment year in terms of *Section 74 of the CGST Act, 2017." 8.16 In the case of Albatross Builders and Developers LLP (supra), this Court held as under: "6. The Co-ordinate Bench of this Court, while examining the similar situation in W.P. No. 15810/2024 (T-RES) in Paragraph No. 4 has held as under: "4. This Court has reviewed the judgment of the Madras High Court and the scope of inquiry under Section 73 of the CGST Act. Based on the established legal principles and the precedent set by the Hon'ble Apex Court, this Court finds that the respondent erred in issuing a consolidated show cause notice for multipl....
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....at under the Scheme of the CGST Act, 2017 which provides for levy and collection of tax on intra State supply of Goods and Services by the Central Government, the Tax period commensurate the period of Return, which necessarily is dependent on the financial year. 2. Upon the pleadings being completed, we have heard the learned Counsel, Mr Bharat Raichandani for the Petitioner, Ms Asha Desai, learned Standing Counsel representing Respondents No. 1 and 2 and the learned Additional Government Advocate, Mr Shubham Priolkar, representing the State of Goa. 3. By consent of parties, we deem it appropriate to issue Rule which is made returnable forthwith. For the sake of convenience, we refer to the pleadings in M/s Milroc Good Earth Developers in Writ Petition No. 2203 of 2025(Filing). The Petitioner, a Partnership Firm, involved in supply of taxable goods is aggrieved by issuance of the impugned Show cause notice dated 28.03.2025, received on 11.04.2025 which inter alia, set out the following demands: (i) demand of GST amounting to Rs. 2,16,31,813/- on construction services provided to the landowner of the Colina Project; (ii) reversal....
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.... engaged in supply of construction service but has failed to pay GST on the construction services, certain data/documents were collected and summons were issued to the Petitioner under Section 17 of the CGST Act. The case of the Petitioner is that it cooperated in the proceedings by attending the summons from time to time but being not satisfied with the stand adopted, impugned Show cause notices were issued fastening a liability amount on the Petitioner, on the construction services provided to the landowner. It was also alleged that the Petitioner availed ineligible Input Tax Credit (ITC) and he is not entitled to reverse the ITC. 6. It is in this background, the Show cause notices were issued but instead of getting into the merits of the matter, Mr Raichandani, has pressed into service, one proposition of law which, according to him, has been well settled by various decisions of the distinct High Courts that there cannot be clubbing of the assessment for different years and on this ground, he claim that the notices are bad in law and though the Petition has raised several grounds about the Show cause notices being unsustainable in the wake of the nature and the....
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....rns, it can be only for the Tax period within the relevant financial year but the Act do not contemplate assessment beyond the relevant financial year. According to Mr Raichandani, once the Act mandates for issuance of notice in a particular manner, it has to be done in that same manner and in no other way. It is the contention of Mr Raichandani that the Scheme involved never contemplated consolidated assessment. Apart from this, it is also the submission of Mr Raichandani that when there is limitation prescribed in the Scheme, by issuing consolidated notices, the time limit for subsequent financial year get curtailed and this would cause serious prejudice to the Petitioner and this could never have been the intention of legislature, when it introduced Sections 73/3, 74/3 in the statute, which refers to the issuance of statements for respective tax periods and he would submit that a notice under Section 73/1, 74/1 is issued for a particular tax period, the statement shall be issued for subsequent months. 8. In support of his submission, he would invoke the principle of law laid down in various authoritative pronouncements and this include the latest decision of th....
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....bout the Petition being premature, we find substance in the submission of Mr Raichandani who would submit that since the issue raised before this Court is a jurisdictional issue and if the Authority lack jurisdiction to have a composite assessment for different tax periods/assessment years, then the formality of responding to the Show cause notice shall not be encouraged and we agree with him, as we are pronouncing upon the issue as to whether it is permissible to issue Show cause notice covering different tax periods, we do not find it appropriate to relegate the Petitioners to file their response and let the issue be decided by the Authority as, in any case, we find that the jurisdiction in the Authority will be dependent upon the Scheme of the Statute and we have heard respective Counsel on the merits of the matter. 11. The Central Goods and Services Tax Act, 2017, an Act which makes provision for levy and collection of tax, on intra-State supply of goods and services or both by the Central Government, is a statute which was enacted to broaden the tax base and confer the power on the Central Government to levy goods and service tax on supply of goods and services which ....
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....ory for every registered person, at his principal place of business, a true and correct account of -- production or manufacture of goods; inward and outward supply of goods or services or both; stock of goods; input tax credit availed; output tax payable and paid; and such other particulars as may be prescribed Section 36 prescribe the period for retention of accounts and by virtue of this provision, it is imperative for every registered person to maintain books of accounts and or other records in accordance with the provisions of sub-section (1) of section 35 shall retain them until the expiry of seventy-two months from the due date of furnishing of annual Return for the year pertaining to such accounts and records. 13. Chapter IX contain provision pertaining to Returns and as per Section 37, every registered person, shall furnish electronically, in such form and manner as may be prescribed, the details of outward supplies of goods or services or both effected during a tax period on or before the tenth day of the month succeeding the said tax period provided that the Commissioner may, for reasons to be recorded in writ....
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....e maintained in such manner as may be prescribed and it also prescribe the manner in which the amount of input tax credit available in the electronic cash ledger of the registered person shall be utilised. The explanation appended to the said Section has defined the expression 'tax dues' to mean the tax payable under the Act and 'other dues' to mean the interest, penalty, fee or other amounts payable under the Act. 16. In the Scheme of CGST, our attention is drawn to Chapter XII, a provision for assessment and we find Section 59 is a provision for self assessment and furnish a Return for 'each Tax period' as specified in Section 39. Therefore, there is a provisional assessment where the taxable person is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on a provisional basis, pursuant to which the proper officer shall pass an order within 90 days allowing the payment of tax on provisional basis at such rate or on such value as may be specified. The Chapter further prescribe the procedure for scrutiny of Returns, assessment of no....
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.... in the Return furnished for the financial year, with the audited annual financial statement for every financial year. The Act thus contemplate for furnishing of annual Returns for every financial year along with the audited final statement. 18. When we have perused the scheme of assessment and payment of tax, we find that the taxes payable under the Act commensurate with Return filed for 'each tax period' and this is may be in the form of self-assessment or provisional assessment as provided in the Act. However, what is important to note is that there is a prescription of period of five years of due date on which 'annual Return' is filed for the relevant financial year and provision of payment and recovery is also included in the statutory scheme in form of Section 73 and 74, which underwent significant amendment by the Act 15 of 2024 and the provision as per sub-section (12) shall be applicable for determination of tax pertaining to the period up to Financial Year 2023-24 and for financial year 2024-25 and onwards, the provision under Section 74A will be relevant. 19. From the perusal of the entire Scheme, it is evidently clear to us that the statutory ....
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....ver or continuing in nature, so as to, club the financial years together. For these reasons also, the bunching of show cause notice is impermissible. In this regard, the Constitution Bench of the Hon'ble Apex Court in the decision rendered, which was reported in AIR 1966 SC 1350 (State of Jammu and Kashmir and Others v. Caltex (India) Ltd) has held as follows: "where an assessment encompasses different assessment years, each assessment year could be easily split up and dissected and the items can be separated and taxed for different periods." 11. Section 73(3)/74(3) of the GST Act refers to issuance of "statement", for subsequent "tax periods", containing the details of tax liabilities pertaining to the respective tax periods. If a notice, under Section 73(1)/74(1) of the GST Act, is issued for any particular tax period, a statement shall be issued, in terms of Section 73(3)/74(3) of GST Act, for the subsequent months and the said statements shall deemed to be a notice issued under Section 73(1)/74(1) of the GST Act. 12. In Section 73(3)/74(3) of the GST Act, it has been stated that "Where a notice has been issued for any period under sub-sec....
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.... are issued for different assessment years. There may be cases where proceedings are initiated in the guise of a show cause notice under Section 74 wherein, on facts, the case of the assessee will fall under Section 73 of the CGST/SGST Act. We find that insofar as the time limit prescribed under Section 73(10) of the CGST/SGST Act is concerned, it is three years instead of five years and further, the aspect of fraud, wilful misstatement and suppression do not arise for consideration in proceedings under Section 73. Thus, by issuing a composite notice, the assessing authority, cannot bypass the mandatory requirement of Section 73 to complete the assessment by falling back on a larger period of limitation under sub-section (10) of Section 74. If such a recourse is permitted, then certainly the said action would be a colourable exercise of the power conferred by the statute and will offend express provisions of the CGST/SGST Act qua limitation. This reason would also prompt us to hold that in cases where the assessing officer finds that an assessee is liable to be proceeded either under Section 73 or under Section 74 for different assessment years, a separate show cause notice has to ....
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....ssioner, Adjudication (DGGSTI), North Delhi and the facts reveal, that the entity, a sole proprietorship of Mr Gaurav Gupta registered under the VAT regime migrated to the GST regime and a search operation was carried out at the residential premises of the Petitioner and various files/records were resumed by the GST Department and the proprietor was arrested by the Directorate of GST Intelligence. A Show cause notice came to be issued along with form DRC-01 by the DGGI, for five financial years from 2017-2018 to 2021-2022 demanding a sum of Rs. 83,76,32,528/- on the ground of alleged fraudulent availment and wrongful passing of Input Tax Credit. It is in this background, the Delhi High Court appreciated the submission advanced in light of the specific provision of Section 74(9) of the CGST 2017 in the backdrop of Section 75. It is in the wake of whole sole fraud which attracted the attention and was the focus point of the decision, the Bench took into consideration the definition of the term 'tax period' as defined in Section 106 and when it interpreted the terms "for any period and "for such periods" under Section 74(3), 74(4), 73(3) and 73(4), it reproduced the Section, ....
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....ure without appreciating the provisions in the Act of 2017 and Rules made therein, and recording a finding that there is no prohibition in issuance of notice calling upon payment of tax for different financial years, in our considered opinion, since the Petition before the Division Bench called for quashing of the demand notice referring to different financial years, but in any case the Court expressed the prima facie opinion and recorded that there is no issue of limitation as contemplated under Section 74(10). In any case the Court refused to show indulgence and directed the Petitioner to face the show cause notice and therefore the Division Bench did not express it final opinion. 26. For the reasons recorded above, by overruling the objections raised by Ms Desai for entertaining the Petition is merely based on the show cause notice as we find that there is no provision to club various tax periods and apart from the fact that it is also beyond the period of limitation, we find that the action of Respondent No. 2 in issuing consolidated show cause notices for multiple assessment years is without jurisdiction and since it is a judicial overreach, we quash and set ....
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....rovision for assessment of tax for each financial year expect the Show cause notice to be issued at least 3 months prior to the time limit specified in Section 73(10) and 74(10) of the Act, for issuance of assessment order as sub-section (10) provide that the proper officer shall issue the order within a period of five years from the due date for furnishing of annual Return for the financial year to which the tax not paid/short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous Return. Thus, there is limitation prescribed for demand of tax and its recovery. The Act of 2017, therefore involve a definite tax period, based on the filing of the Return, which can be either monthly or annual Return and if the assessment is based on annual Return, the tax period shall be the relevant financial year. In the light of the statutory scheme, we find that there is no scope for consolidating various financial years/tax period which is attempted by the impugned Show Cause Notices assailed in the Petition." 3] As could be seen, the Division Bench has in categorical terms held that there is no scope for consolid....
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....resent case, notice was issued under section 73 of the Act for determination of the tax and therefore, the limitation period of three years as prescribed under section 73(10) would be applicable. Therefore, the contention of the respondent that there is no time limit contemplated under section 73 of the Act is not correct. 14. Further, by issuing bunching of show cause notices for five Assessment Years starting from 2017-18 to2021-22, the respondents are trying to do certain things indirectly which they are not permitted to do directly and the same is not permissible in law. If the law states that a particular action has to be completed within a particular year, the same has to be carried out accordingly. The limitation period of three years would be separately applicable for every assessment year and it would vary from one assessment year to another. It is not that it would be carried over or that the limitation would be continuing in nature and the same can be clubbed. The limitation period of three years ends from the date of furnishing of the annual return for the particular financial year. 15. Therefore, issuing bunching of show cause notices is against the s....
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.... xxxxxxxxxxxxx xxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxx (9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund." It will be seen from the above extracted statutory provisions that quite contrary to what has been urged on behalf of the appellants, there is no mandate under Section 74 for the issuance of a consolidated show cause notice covering various assessment years. The provisions of Section 74(1) only require the proper officer to arrive at a subjective satisfaction regarding any of the specified factors which have led to an evasion of tax and on arriving at the said satisfaction, the proper officer is required to issue a show cause notice to the assessee concerned specifying the amount of ....
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.... 11A of the erstwhile Central Excise Act. Under both of the above provisions, the show cause notices issued, irrespective of whether it covered a single financial/assessment year or multiple years, had to be adjudicated within a fixed period of one year from the date of the show cause notice. The scheme of adjudication is different under the CGST Act. Under Section 74 of the CGST Act, the end termini for adjudication varies for each financial/assessment year, since it is not pegged to the date of the show cause notice but to a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to. Issuing a consolidated show cause notice covering various financial/assessment years would cause prejudice to an assessee who would not get the full period envisaged for adjudication under the Statute, if that period is circumscribed by the limitation period prescribed in relation to an earlier financial/assessment year. In other words, where, in a situation such as the present, the proximate expiry of the limitation period under Section 74(10) is only in relation to o....
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....d remain un recovered they must also at the same time not act in a manner as might indicate that scales are weighted against the assessee. We are wholly unable to subscribe to the law that unless those authorities exercise the power in a manner most beneficial to the revenue and consequently most adverse to the assessee, they should be deemed not to have exercised it in a proper and judicious manner." 8.21 In the case of Tharayil Medicals (supra), the Division Bench of Kerala High Court held as under: "7. Section 74(1) and (2) of the CSGT Act reads as follows: Section 74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts.- (1) Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has er....
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....rs. Having held so, the pertinent question before us would be, can the proper officer issue a composite show cause notice and then proceed to pass separate orders for each assessment year. We find that while deciding the case Lakshmi Mobiles Accessories (supra) this issue did not fall for our consideration. 11. When we read sub-sections (9) and (10) of Section 74, which specifically refer to " financial year to which the tax not paid or short paid or input tax wrongly availed or utilised relates" while passing the final order of adjudication, it presupposes that independent show cause notice be issued to the assessee for each different years of assessment while proceeding under Section 74. We are constrained to hold so because, as we noted earlier, the assessee can raise a distinct and independent defence to the show cause notice issued in respect of different assessment years. In other words, the entitlement to proceed and assess each year being separate and distinct, and further the time limit being prescribed under the Statute for each assessment year being distinct, we see no reason as to why we should not hold that separate show cause notices are required before proce....
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....to the show cause notice goes to the root of the jurisdiction of the proper officer in issuing the same and we hold that the writ petition is perfectly maintainable. 15. Having concluded as above, we find that the learned Single Judge failed to take note of these intricate questions of law involved while interpreting the provisions of Section 73 read with Section 74 of the CGST/SGST Act and thus failed to appreciate the contentions of the appellants in its true perspective and therefore erred egregiously in dismissing the writ petition relegating the petitioner to prefer reply to the notice before the adjudicating authority. Thus, we are of the considered view that the appellant has made out a case for interference and hence entitled to succeed." 8.22 In the case of Tharayil Medicals (supra), the Single Bench of Kerala High Court held as under: "The issue raised in this Writ petition (Civil) is covered against the petitioner by the judgment of this Court in M/s. X.L. Interiiors Vs. Deputy Commissioner (Intelligence) and Ors; 2024 KER 76194 in W.P.(C). No. 35156/2024. For the same reasons set out in the said judgment, this writ petition will also stand dismissed....
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....isstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. (2) The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon....
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.... said statement, except the ground of fraud, or any wilful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) to (8).................. (9) The proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and penalty due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund. 7. A reading of above provisions shows that the respondents shall serve notice, in terms of sub-section (1) of Section 73/74 of the GST Act, on the person chargeable with tax, which has not been paid, etc., requiring him to show cause as to why he should not pay the amount specified in the notice, along with the interest and penalty, for various situations mentioned therein. ....
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....tion 73/74 of the GST Act. Therefore, the limitation period of 3 years/5 years would be separately applicable for every financial year, thus, the limitation period would vary from one financial year to other. It is not that the limitation would be carried over or continuing in nature, so as to, club the financial years together. For these reasons also, the bunching of show cause notice is impermissible. In this regard, the Constitution Bench of the Hon'ble Apex Court in the decision rendered, which was reported in State of Jammu and Kashmir v. Caltex (India) Ltd. AIR 1966 SC 1350 has held as follows: "where an assessment encompasses different assessment years, each assessment year could be easily split up and dissected and the items can be separated and taxed for different periods." 11. Section 73(3)/74(3) of the GST Act refers to issuance of "statement", for subsequent "tax periods", containing the details of tax liabilities pertaining to the respective tax periods. If a notice, under Section 73(1)/74(1) of the GST Act, is issued for any particular tax period, a statement shall be issued, in terms of Section 73(3)/74(3) of GST Act, for the subsequent months a....
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....ws: 2(97) "return" means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder; 18. A reading of the above would show that the "return" is prescribed by the Act or the Rules made thereunder. As stated above, an Assessee is required to file monthly return as well as annual return and issuance of show cause notice should be strictly based on the tax periods, which is determined based on filing of returns. Therefore, it is clear that the show cause notice can be issued either based on the monthly return or based on the annual return for the entire financial year or part thereof as decided by the Department. If any return is filed for more than one financial year, then, based on the said returns, single show cause notice can be issued. However, under the GST Law, there is no requirement for filing any returns other than monthly and yearly returns. Hence, no show cause notice could be issued for more than one financial year. 19. In view of the above, there is no doubt that in terms of GST Law, "any period", for the purpose of issuance of show cause notice, includes, "monthly tax period" or "yearly tax per....
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.... committed only particular financial year. 25. In a similar situation, this Court has already held that the bunching of show cause notice is impermissible vide order passed in Titan case, wherein, it has been stated as follows: "13. The main contention of the petitioner was that bunching of show cause notices was not allowed in law and it is against the provisions of Section 73 of the Act. Section 73(10) of the Act specifically provides a time limit of three years from the due date for furnishing of annual return for the financial year to which the tax due relates to. In the present case, notice was issued under Section 73 of the Act for determination of the tax and therefore, the limitation period of three years as prescribed under Section 73(10) would be applicable. Therefore, the contention of the respondent that there is no time limit contemplated under Section 73 of the Act is not correct. 14. Further, by issuing bunching of show cause notices for five Assessment Years starting from 2017-18 to 2021-22, the respondents are trying to do certain things indirectly which they are not permitted to do directly and the same is not permissible in law. If the ....
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....rlier, the assessee can raise a distinct and independent defence to the show cause notice issued in respect of different assessment years. In other words, the entitlement to proceed and assess each year being separate and distinct, and further the time limit being prescribed under the Statute for each assessment year being distinct, we see no reason as to why we should not hold that separate show cause notices are required before proceeding to assess the assessee for different years of assessment under Section 74. There is yet another reason why we should hold that separate show-cause notices are issued for different assessment years. There may be cases where proceedings are initiated in the guise of a show cause notice under Section 74 wherein, on facts, the case of the assessee will fall under Section 73 of the CGST/SGST Act. We find that insofar as the time limit prescribed under Section 73(10) of the CGST/SGST Act is concerned, it is three years instead of five years and further, the aspect of fraud, willful misstatement and suppression do not arise for consideration in proceedings under Section 73. Thus, by issuing a composite notice, the assessing authority, cannot b....
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...., the Madras High Court held as under: "4. Further, they would submit that the aforesaid issue has already been decided by this Court vide common order dated 21.07.2025 passed in W.P.Nos.29716 of 2024, etc., batch, wherein it has been held as follows: "28. (i) The GST Act permits only for issuance of show cause notice based on the tax period. Therefore, if the annual return is filed, the entire year would be considered as a tax period and accordingly, the show cause notice shall be issued based on the said annual returns. If show cause notice is issued before the filing of annual returns, the same can be issued based on the filing of monthly returns; If show cause notice is issued after the filing of annual returns or after the commencement of limitation, the said notice shall be issued based on the annual returns with regard to the relevant financial year. No show cause notice can be clubbed and issued for more than one financial year since the same is impermissible in law. In these cases, without any jurisdiction, the impugned show cause notices/orders came to be issued/passed for more than one financial year, which is impermi....
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....6 taxmann.com 731/111 GST 104 (Madras), dated 21.07.2025 8. W.A.Nos.2389 & 1397/2024 The Joint Commissioner of GST and Central Excise Salem Commissionerate, Salem v. Titan Company Ltd., dated 27.03.2025 9. W.P.(C).4853/2025 CM APPL 22194/2025 CM APPL 22195/2025 Ambika Traders v. Additional Commissioner [2025] 177 taxmann.com 134 (Delhi), 29.07.2025 10. W.P.No.19381/2024 06.01.2025 7. The High Court at Madras dealt with this issue in Titan Company Ltd. (supra). In this case, while dealing with the question of bunching of show cause notices for five different assessment years, the Hon'ble High Court at Madras, after referring to the judgment of a Constitution Bench of the Hon'ble Supreme Court in Caltex India Ltd. (supra), had held that a single show cause notice cannot be issued for more than one financial year. However, since the issue was before the Hon'ble High Court of Madras, at the stage of show cause notice, the respondents were directed to consider the application of the petitioner for splitting up the show cause notices. An appeal was filed against the said order and the said decision was not disturbed and directions were issu....
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.... of Kerala held that such a course of action is not permissible. 11. On the other hand, the Hon'ble High Court of Delhi in Ambika Traders (supra), had held that a composite show cause notice can be issued in relation to any number of assessment periods / years. The Hon'ble High Court at Bombay had taken the same view on the ground that there was nothing in Section 74, which prohibited an authority from issuing a notice for any period, provided said notice is given at least six months prior to the time limit specified under Section 74 (10). In the light of the conflicting decisions, a review of the relevant provisions would be necessary. 12. The relevant provisions are Sections 2(97), 2(106), 39(1) & (2) Section 44(1) and Sections 73 and 74, which read as follows: 2(97) "return" means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder; 2(106) "tax period'' means the period for which the return is required to be furnished; Section 39. Furnishing of Returns- (1) Every registered person, other than an Input Service Distributor or a non resident taxable person or a per....
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....oper officer shall issue the notice under sub-section (1) at least three months prior to the time-limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of such statement shall be deemed to be service of notice on such person under sub-section (1), subject to the condition that the grounds relied upon for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the earlier notice. (5) The person chargeable with tax may, before service of notice under sub-section (1) or, as the case maybe, the statement under sub-section (3) pay the amount of tax along with interest payable thereon under section 50on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. (6) ....
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....d has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring him to show cause why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty equivalent to the tax specified in the notice. (2) The proper officer shall issue the notice under sub-section (1) at least six months prior to the time limit specified in sub-section (10) for issuance of order. (3) Where a notice has been issued for any period under sub-section (1), the proper officer may serve a statement, containing the details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for such periods other than those covered under sub-section (1), on the person chargeable with tax. (4) The service of statement under sub-section (3) shall be deemed to be service of notice under sub-section (1) of section 73, subject to the condition that the grounds relied upon in the said statement, except the ground of fraud, or any willful-misstatement or suppression of facts to evade tax, for periods other than those covered under sub-section (1) are the same as are menti....
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.... main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded. Explanation II:- For the purposes of this Act, the expression "suppression" shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer. 13. The scheme of the Act, is that GST is payable on supplies of goods and services, at the rates fixed under the schedules and notifications that would be issued by the GST Council. This GST is assessed and calculated as per the provisions set out in the Act. The provisions under Section 62 providing assessment of non-filers of returns and Section 63 providing assessment of unregistered persons etc., can be ignored for the purpose of this case. The primary provisions for determination of tax are Sections 73 and 74. ....
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....s in pari materia with Section 73(3). However, sub-section (4) of Section 74 does not contain the term "such tax period". This non mention would not, in our opinion, make any difference to the aforesaid interpretation. Apart from this, there are certain other provisions, which would also have to be considered. Any interpretation of an Act should not result in some of the other provisions becoming otiose or reduced in scope. As rightly pointed out by the Hon'ble High Court at Madras, the right of a registered person to obtain benefit under Section 128 of APGST Act as well as the right to invoke the remedy of appeal against the orders of assessment either under Section 73 or under Section 74 would get impacted if a common order is permitted to be issued in relation to more than one assessment / financial year. 18. In the circumstances, we are of the opinion that a single show cause notice or a single composite assessment order cannot be passed in relation to more than one tax period of either a month if the assessment is taken up before the due date for filing of the annual return or for more than one year if the due date for filing of annual return has been reached." ....
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....ade tax, the period by which orders have to be passed gets stretched to 5 years, that is by 31st December 2029. It follows there from that as per Section 75(10) if the orders are not issued within the aforementioned period, the adjudication proceedings are deemed to be concluded. (iv) Therefore, whether the matter relates to output tax shortages or input tax credit recoveries, reference is always made to each financial year as a unit relating to which adjudication by way of determination of tax will be done; there is no difference in periods envisaged between shortage of tax on the output side and wrong availment or utilisation on the input side. (v) It will also be pertinent to note that while investigation can be carried out over a period of time which may stretch across several financial years, when it comes to determination of tax as a result of such investigation, the time limits for issuance of show cause notices as envisaged in Section 73(2) or Section 74(2) or the orders under Section 73(10) or Section 74(10) are fixed in relation to the date of furnishing annual returns or when it should have been furnished or date of erroneous refund. The legislative int....
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....tence of a jurisdictional fact is essential for the respondents to assume jurisdiction and consequently invoke Section 73/74 of the CGST/KGST Act and in the absence of existence of such jurisdictional fact, the very invocation/assumption of jurisdiction for the purpose of issuing a show cause notice under Section 73/74 would be illegal and arbitrary and as such, the said contention urged by the respondents cannot be accepted in the light of various judgments of the Apex Court and this Court including the judgment of the Apex Court in the case of Radhakrishnan Industries vs. State of Himachal Pradesh-2021 (4) TMI 837, wherein it was held as under: "24 The High Court has dealt with the maintainability of the petition under Article 226 of the Constitution. Relying on the decision of this Court in Assistant Commissioner (CT) LTU, Kakinada and others v Glaxo Smith Kline Consumer Health Care Limited AIR 2020 SC 2819, the High Court noted that although it can entertain a petition under Article 226 of the Constitution, it must not do so when the aggrieved person has an effective alternate remedy available in law. However, certain exceptions to this "rule of alternate reme....
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.... "7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] .) The present case attracts applicability of the first two contingencies. Moreover, as noted, the appellants' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the....
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....nancial years in a Solitary/Single/Composite Show cause notice issued under Section 73/74 of the CGST/KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST/KGST Act. Re: Point No.(ii); 9. While dealing with Point No. (i) supra, I have already come to the conclusion that clubbing / consolidation / bunching/ combining of multiple tax periods/financial years in a Solitary/Single/Composite Show cause notice issued under Section 73 / 74 of the CGST / KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST / KGST Act. In the instant case, a perusal of the impugned Show cause notice dated 30.09.2025 will indicate that the same encompasses and pertains to multiple tax periods/financial years, viz., from 2019-20 to 2023-24, which is impermissible in law and consequently, the impugned Show cause notice and all further proceedings pursuant thereto are also vitiated and deserve to be quashed reserving liberty to the respondents to initiate any action/proceedings in accordance with law. Point No.(ii) is also accordingly answered in fa....