AI Drafter 
TaxTMI 
TaxTMI 
2026 (2) TMI 719
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....nd Services Tax Rules, 2017 (hereinafter referred to as, "the Rules") require issuance of mandatory notice in Form GST DRC-01A since the subject period covered pre-amended period of 2018-19 and 2019-20 which was not issued; and iii) a consolidated order for all the tax periods is not permissible. On these grounds, the impugned orders are liable to be set aside. 2. Learned counsel for the petitioner has referred to the reply to the show cause notice dated 22.09.2025 (Annexure P-4 at page No.127) and submitted that the petitioner has opted for personal hearing, but after the reply was filed no personal hearing was given to the petitioner. He has also referred to the order-in-original dated 13.10.2025 (Annexure P-1) and submitted that after the petitioner submitted a letter dated 10.09.2025, no personal hearing was given to the petitioner. 3. Show cause notice was issued on 21.03.2025 (Annexure P-2 at page No.78) and the last notice was issued on 10.09.2025, on which day the petitioner also filed the reply wherein it has requested for personal hearing. Thereafter no opportunity was given to the petitioner. 4. The petitioner took some time to collect the data in order....
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....ubmits that the decision referred to at para 21 i.e., Ambika Traders v. Additional Commissioner [2025] 177 taxmann.com 134 (Delhi) was assailed before the Hon'ble Supreme Court, but the challenge was withdrawn. At paras 21 to 24 of Mathur Polymers (supra), the High Court of Delhi has observed that in cases involving allegations of fraudulent availment of ITC, where the transactions are spread across several years, a consolidated notice may in fact be required in order to establish the illegal modality adopted by such businesses and entities. The language of the legislation itself does not prevent issuance of show cause notice or order for multiple years in a consolidated manner. The said decision was carried to the Hon'ble Supreme Court in S.L.P (C) Diary No.50279/2025 (M/s. Mathur Polymers vs. Union of India) and was dismissed on 07.11.2025. The other similar matters were withdrawn. 9. He has invited the attention of this Court to Rule 142(1A) and submitted that nowhere in Rule 142(1A) there is any reference to the 'period'. The reference is only to the 'notice'. The word "shall" in the said Rule has been amended as 'may' with effect from 15.10.2020. Admittedly, the show cause ....
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....ples of natural justice. The officer should have granted some more time. The petitioner was not given personal hearing, which has resulted in serious prejudice. 14. Regarding Rule 142(1A), learned counsel for the petitioner has submitted that the submissions of the learned Senior Standing Counsel are against the decision of this Court in M/s. DBL-Deco (JV), which has addressed the issue. It is binding on the respondent. 15. So far as the passing of composite order for multiple tax periods is concerned, learned counsel for the petitioner submits that the case of Mathur Polymers (supra) is only on the question of ITC, whereas in the case of the petitioner, ITC is one of the issues. There are other issues involved where serious prejudice would be caused if separate show cause notice and proceedings were not initiated for separate years. 16. We have heard learned counsel for the parties and considered the grounds urged. 17. The impugned show cause notice dated 21.03.2025 and the Order-in-Original, dated 13.10.2025 have been challenged inter alia on the following grounds: i) That no personal hearing was granted after the reply filed by the petitioner which amounted ....
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....6.2025, 15.07.2025 and 06.08.2025. The petitioner/tax payer did not attend personal hearing to present its defence. Another opportunity of personal hearing was given on 10.09.2025 vide letter dated 02.09.2025. The petitioner did not appear on that date also, but sent e-mail on 11.09.2025. It is, therefore, evident that the contention of the petitioner that no opportunity of personal hearing was granted is not correct. 20. As per Section 75(4) of the CGST Act, an opportunity of personal hearing is to be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person. Sub-section (5) of Section 75 provides that if sufficient cause is shown by the person chargeable with tax, the proper officer shall grant time to the said person and adjourn the hearing for reasons to be recorded in writing. It is therefore evident that by granting several opportunities of personal hearing after expiry of the period of thirty days of the service of show cause notice, the proper officer duly complied with the requirement of personal hearing. The contention of the petitioner that it should have been grante....
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....erved as under: 43. Insofar as the issue of consolidated notice for various financial years is concerned, a perusal of Section 74 of the CGST Act would itself shows that at least insofar as fraudulently availed or utilised ITC is concerned, the language used in Section 74(3) of the CGST Act and Section 74(4) of the CGST Act is "for any period" and "for such periods" respectively. This contemplates that a notice can be issued for a period which could be more than one financial year. Similar is the language even in Section 73 of the CGST Act. The relevant provisions read as under: "73. 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 for any reason other than fraud or any wilful-misstatement or suppression of facts.- Xxx (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 p....
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....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" The Legislature is thus, conscious of the fact that insofar as wrongfully availed ITC is concerned, the notice can relate to a period and need not to be for a specific financial year. 46. The nature of ITC is such that fraudulent utilization and availment of the same cannot be established on most occasions without connecting transactions over different financial years. The purchase could be shown in one financial year and the supply may be shown in the next financial year. It is only when either are found to be fabricated or the firms are found to be fake that the maze of transactions can be analysed and established as being fraudulent or bogus. 47. A solitary availment or utilization of ITC in one financial year may actually not be capable of by itself establishing the pattern of fraudulent availment or utilization. It is only when the series of transactions are analysed, investigated, and enquired into, and a consistent pattern is established, that the fraudulent a....
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.... The language of the legislation, itself, does not prevent issuance of SCN or order for multiple years in a consolidated manner." 22. The challenge to the aforesaid judgment by the aggrieved petitioner in S.L.P (Civil) Dairy No. 50279 of 2025 was dismissed vide judgment dated 07.11.2025 holding that no good grounds were made out. It is also to be taken note of that as per Section 74(10) of the CGST Act, an order under sub-section (9) has to be passed 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. As per the CBIC Circular, the last date for passing of order under Section 74 of the CGST Act for the Financial Year 2018-19 was extended upto 31.12.2025. The impugned order has been passed on 13.10.2025 and as such even for the Financial Year 2018-19, the composite order has been passed well within the period of limitation prescribed under Section 74(10) read with Section 74(9) of the Act. The assessee cannot claim to be prejudiced if the adjudication proceedings for multiple ye....
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....at the amendment is prospective and therefore, apply to the show cause notice. The decision rendered by the Andhra Pradesh High Court in M/s. New Morning Star Travels (supra) and that of the Madras High Court in Vishaka Exports (supra) on the interpretation of the amended Rule 142(1A) of the CGST Rules are divergent. He has submitted that in the facts and circumstances of the case, the test is whether non-intimation under Rule 142(1A) of the CGST Rules has, in the ultimate analysis, led to any prejudice to the assessee. The petitioner though in its reply to the show cause notice raised the issue of non-intimation of the tax, penalty and interest ascertained by the proper officer under Rule 142(1A) of the CGST Rules, but it, at the same time, contested the charges contained in the show cause notice. Therefore, the requirement of the intimation was rendered formal. If issuance of such intimation could not have served any benefit to the assessee, it would be futile on the part of the writ court to enforce on the revenue authorities fulfilment of that condition as no real prejudice is shown to have been caused. In Elesh Agarwal (supra), the Division Bench of Allahabad High Court had in....
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....arily strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to the person against whom the action is taken. The validity of the order has to be decided on the touchstone of 'prejudice'. The ultimate test is always the same viz., the test of prejudice or the test of fair hearing. The opinion of the apex court at para 40 of the said judgment is extracted as under: "40. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the courts. Even if it is found by the court that there is a violation of principles of natural justice, the courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non-grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of natural justice may not lead to the conclusion that the order passed is always null and void. The ....
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.... rule of sub silentio being another exception to the rule of precedents, the opinion of the apex court is as under: "154. Another exception to the rule of precedents is the rule of sub silentio. A decision is passed sub silentio when the particular point of law in a decision is not perceived by the court or not present to its mind or is not consciously determined by the court and it does not form part of the ratio decidendi it is not binding vide Arnit Das (1) vs. State of Bihar (2000) 5 SCC 488." 34. It follows therefrom that a decision is passed sub silentio when the particular point of law in a decision is not perceived by the court or not present to its mind or is not consciously determined by the court and it does not form part of the ratio decidendi, it is not binding. (Also see paras 13, 13.1 to 13.8 of Odisha State Financial Corporation vs. Vigyan Chemical Industries 2025 SCC OnLine SC 1609). In such a situation, the decision in the case of M/s. New Morning Star Travels (supra) can be said to be rendered sub silentio as the test of prejudice was neither raised nor considered by the learned court. This court is therefore of the opinion that non-issuance of intima....