AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 125
X X X X Extracts X X X X
X X X X Extracts X X X X
....cial Taxes (Audit)-3.1, The Commercial Tax Officer, Office Of The Additional Commissioner Of Commercial Taxes (Enforcement), Bengaluru And Principal Commissioner Of Central Tax, The Additional Commissioner Of Central Tax, The Superintendent Of Central Tax Hpu, Mysore And Central Board Of Indirect Taxes And Customs, Union Of India, New Delhi, The Office Of The Additional Director General, Belagavi, Versus M/S Chimney Hills Education Society, M/S. Veremax Technologie Services Limited, M/S Albatross Builders And Developers Llp., M/S Pramur Homes And Shelters, M/S Pavanputra Resorts, M/S Edge Solutions, M/S Aswan Ventures, M/S Century Real Estate Holding Pvt. Ltd., M/S. G.M. Agro And Beverages (India) Private Limited, M/S S.R.S Travels And Logistics Private Limited For The Appellant : Sri Aravind V. Chavan, Senior Standing Counsel Sri M. Unnikrishnan, Senior Standing Sri Unnikrishnan M., Advocate For The Respondent : Sri. A. Shankar, Senior Counsel For Sri Pranay Sharma Y., Advocate Sri E.I. Sanmathi, Advocate For Sri M.N. Shankare Gowda, Advocate Sri. K.K. Chythanya, Senior Counsel For Sri Sanmathi E. I., Advocate, Sri Bharat B Raichandani, Advocate For C/R1; Sri Sandeep Huilgol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this Court and the decision of the Madras High Court in M/S. TITAN COMPANY LIMITED VS. JOINT COMMISSIONER OF GST [W.P.No.33164/2023] 6. The Revenue aggrieved by the said order of the learned Single Judge, is in appeal. 7. Heard learned standing counsel Sri. Aravind V. Chavan and learned counsel Sri. M. Unnikrishnan for appellants/Revenue, learned Additional Advocate General Shri Aditya Vikram Bhat for State, learned senior counsel Sri.A.Shankar for learned counsel Sri.Pranay Sharma.Y, learned senior counsel Sri.K.K.Chythanya for learned counsel Sri.E.I.Sanmathi, learned counsel Sri.M.N.Shankare Gowda, learned counsel Sri.Bharat B. Raichandani for caveator/respondent No.1 and learned counsel Sri.Sandeep Huilgol for intervening applicants in I.A.No.2/2026 to I.A.No.5/2026 in W.A.No.407/2026, learned counsel Sri.Vinay.N., learned counsel Sri.P.B.Harish for respondents/ assessees. Perused the appeal papers. 8. Learned senior standing counsel Sri.Aravind V. Chavan for appellants/Revenue referring to Sections 73 and 74 of the Act submits that it would not restrict initiation of proceedings to a single financial year. Similarly, he submits that the procedure prescribed for regula....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould provide an opportunity to the respondent/assesses to submit their reply and thereafter efficacious statutory remedy is provided under the Act. 11. Further, learned Additional Government Advocate referring to Rule 56 of the Central Goods and Services Tax Rules, 2017 (for short, 'the Rules') would submit that accounts are to be maintained for each works contract. It is also submitted that if common show cause notice covering various financial years is issued, at the time of adjudication, adjudication could be for each financial year, therefore, issuance of common show cause notice involving several financial years cannot be found fault with. 12. The Learned AGA relied upon the following judgments: (i) Singareni Collieries Company Limited vs. Vemuganti Ramakrishan Rao and Others, (2013) 8 SCC 789 : 2013 SCC OnLine SC 780 (ii) Union of India and Others vs. V.R. Nanukuttan Nair, (2019) 19 SCC 690 : 2019 SCC OnLine SC 1435 (iii) Murlidhar Madanlal vs. Commissioner of Income Tax, Bihar and Orissa, (1954) 26 ITR 231 : 1954 SCC OnLine Pat 41 : AIR 1954 Pat 511 (iv) State of Jammu and Kashmir vs. Caltex (India) Ltd., 1965 SCC OnLine SC 168 : (19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m-GST DRC-07 issued under Rule 100 of the Rules. 15. In support of the aforesaid submissions, learned counsel relied upon the following judgments: (i) J.K. Steel Ltd vs. Union of India, 1978 (2) E.L.T. 355 (SC). (ii) Dhandhania Kedia & Co vs. CIT, [1959] 35 ITR 400 (SC. (iii) Shri Ishar Alloy Steels Ltd vs Jayaswals Neco Limited, 2001 (3) SCC 609. (iv) Milroc Good Earth Developers vs. Union of India [2025] 179 taxmann.com 465 (Bombay)/[2025] 112 GST 596 (Bombay)/[2026] 104 GSTL 45 (Bombay) [0910-2025]. (v) Joint Commissioner (Intelligence & Enforcement) vs. Lakshmi Mobile Accessories [2025] 171 taxmann.com 214 (Kerala)/[2025] 108 GST 750 (Kerala)/[2025] 95 GSTL 356 (Kerala) [05-02-2025]. (vi) Tharayil Medicals vs. Deputy Commissioner, SGST Department, Thrissur [2025] 173 taxmann.com 867 (Kerala) [08-042025]. (vii) S.J.Constructions vs. Assistant Commissioner [2025] 178 taxmann.com 570 (Andhra Pradesh)/[2025] 102 GSTL 348 (Andhra Pradesh) [17-09-2025]. (viii) R A and Co vs. Additional Commissioner of Central Taxes [2025] 176 taxmann.com 731 (Madras)/[2025] 111 GST 104 (Madras)/[2025] 101 GSTL 21 (Madras) [210....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... limitation applicable to cases falling under Section 73 of the Act would effectively stand extended by application of Section 74 of the Act, which is impermissible. Learned senior counsel also places reliance on the circulars prescribing pecuniary limits for adjudication by the proper officer. It is submitted that depending on the pecuniary jurisdiction, show cause notices are to be adjudicated. Issuance of common or consolidated show cause notice may result in adjudication of show cause notice by officer having no pecuniary jurisdiction. 18. It is also contended that in view of the deeming fiction under sub-section (10) of Section 75, proceedings are deemed to be concluded if not adjudicated within the time prescribed under subsection (10) of Sections 73 and 74. Such anomalies, it is submitted, can be avoided if separate show cause notices are issued for each financial year, which would, in fact, be advantageous even from the perspective of the Revenue. Learned counsel further submits that where a consolidated show cause notice is issued covering multiple years, and some of those years attract Section 73, such cases may, by legal fiction, be treated and determined under Sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sur [2025] 173 taxmann.com 867 (Kerala) [08-042025]. (v) S.J.Constructions vs. Assistant Commissioner [2025] 178 taxmann.com 570 (Andhra Pradesh)/[2025] 102 GSTL 348 (Andhra Pradesh) [17-09-2025]. (vi) Pramur Homes and Shelters vs. Union of India [2025] 181 taxmann.com 541 (Karnataka) [11-12-2025]. (vii) Gopi Chand vs. Deputy Commissioner of Commercial Taxes (Audit) [2025] 171 taxmann.com 586 (Karnataka)/[2025] 109 GST 25 (Karnataka) [22-01-2025]. (viii) R A and Co vs. Additional Commissioner of Central Taxes [2025] 176 taxmann.com 731 (Madras)/[2025] 111 GST 104 (Madras)/[2025] 101 GSTL 21 (Madras) [21-07-2025]. (ix) Titan Company Ltd. vs. Joint Commissioner of GST & Central Excise [2024] 159 taxmann.com 162 (Madras) [18-12-2023]. (x) Ekta Enterprises vs. State of Himachal Pradesh (2026) 38 Centax 303 (H.P). (xi) Dream Infotech vs. State Tax Officer (Ins), Tirunelveli (2026) 183 taxmann.com 272 (madras)[02-02-2026]. (xii) Smt. R Ashaarajaa vs. Senior Intelligence Officer, Directorate General of GST Intelligence [2025] 176 taxmann.com 689 (Madras). (xiii) Speedways Logistics (P.) Ltd. vs. Union of Indi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "2. Definitions.-In this Act, unless the context otherwise requires,- ***** (106) "tax period" means the period for which the return is required to be furnished;" "37. Furnishing details of outward supplies.-(1) Every registered person, other than an Input Service Distributor, a non-resident taxable person and a person paying tax under the provisions of Section 10 or Section 51 or Section 52, shall furnish, electronically, [subject to such conditions and restrictions and] 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 and such details [shall, subject to such conditions and restrictions, within such time and in such manner as may be prescribed, be communicated to the recipient of the said supplies]: [* * *] [Provided that] the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing such details for such class of taxable persons as may be specified therein: [Provided further that] any extension of time limit notif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riod under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said details.] Explanation.-For the purposes of this Chapter, the expression "details of outward supplies" shall include details of invoices, debit notes, credit notes and revised invoices issued in relation to outward supplies made during any tax period. "38. Communication of details of inward supplies and input tax credit.-(1) The details of outward supplies furnished by the registered persons under sub-section (1) of Section 37 and of such other supplies as may be prescribed, [a statement] containing the details of input tax credit shall be made available electronically to the recipients of such supplies in such form and manner, within such time, and subject to such conditions and restrictions as may be prescribed. (2) The [statement referred in] sub-section (1) shall consist of- (a) details of inward supplies in respect of which credit of input tax may be available to the recipient; [* * *] (b) details of supplies in respect of which such credit cannot be availed, whether wholly or partly, by the recipient, [includi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in such form and manner, and within such time, as may be prescribed.] [(3) Every registered person required to deduct tax at source under Section 51 shall electronically furnish a return for every calendar month of the deductions made during the month in such form and manner and within such time as may be prescribed: Provided that the said registered person shall furnish a return for every calendar month whether or not any deductions have been made during the said month.] (4) Every taxable person registered as an Input Service Distributor shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, within thirteen days after the end of such month. (5) Every registered non-resident taxable person shall, for every calendar month or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically, within [thirteen] days after the end of a calendar month or within seven days after the last day of the period of registration specified under sub-section (1) of Section 27, whichever is earlier. (6) The Commissioner may, for reasons to be recorded i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omission or incorrect particulars shall be allowed after [the thirtieth day of November] following [the end of the financial year to which such details pertain], or the actual date of furnishing of relevant annual return, whichever is earlier. (10) A registered person shall not be allowed to furnish a return for a tax period if the return for any of the previous tax periods [or the details of outward supplies under sub-section (1) of Section 37 for the said tax period has not been furnished by him: Provided that the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish the return, even if he has not furnished the returns for one or more previous tax periods or has not furnished the details of outward supplies under subsection (1) of Section 37 for the said tax period.] [(11) A registered person shall not be allowed to furnish a return for a tax period after the expiry of a period of three years from the due date of furnishing the said return: Provided that the Government may, on the recom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l year after the expiry of a period of three years from the due date of furnishing the said annual return: Provided that the Government may, on the recommendations of the Council, by notification, and subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish an annual return for a financial year under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said annual return." "45. Final return.-Every registered person who is required to furnish a return under subsection (1) of Section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as may be prescribed." "49. Payment of tax, interest, penalty and other amounts.-(1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such condition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and (f) the State tax or Union territory tax shall not be utilised towards payment of central tax. (6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of Section 54. (7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed. (8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely:- (a) self-assessed tax, and other dues related to returns of previous tax periods; (b) self-assessed tax, and other dues related to the return of the current tax period; (c) any other amount payable under this Act or the rules made thereunder including the demand determined under Section 73 or Section 74 [or Section 74-A]. (9) Every person who has paid the tax on goods or se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y; or (c) Governmental agencies; or (d) such persons or category of persons as may be notified by the Government on the recommendations of the Council, (hereafter in this section referred to as "the deductor"), to deduct tax at the rate of one per cent. from the payment made or credited to the supplier (hereafter in this section referred to as "the deductee") of taxable goods or services or both, where the total value of such supply, under a contract, exceeds two lakh and fifty thousand rupees: Provided that no deduction shall be made if the location of the supplier and the place of supply is in a State or Union territory which is different from the State or as the case may be, Union territory of registration of the recipient. Explanation.-For the purpose of deduction of tax specified above, the value of supply shall be taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and cess indicated in the invoice. (2) The amount deducted as tax under this section shall be paid to the Government by the deductor within ten days after the end of the month in which such deduction is made, in such man....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h such collection is made, in such manner as may be prescribed. (4) Every operator who collects the amount specified in sub-section (1) shall furnish a statement, electronically, containing the details of outward supplies of goods or services or both effected through it, including the supplies of goods or services or both returned through it, and the amount collected under sub-section (1) during a month, in such form and manner as may be prescribed, within ten days after the end of such month. [Explanation:-For the purposes of this sub-section, it is hereby declared that the due date for furnishing the said statement for the months of October, November and December, 2018 shall be the [7th February, 2019] : ] [Provided that the Commissioner may, for reasons to be recorded in writing, by notification, extend the time limit for furnishing the statement for such class of registered persons as may be specified therein: Provided further that any extension of time limit notified by the Commissioner of State tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.] (5) Every operator who collects the amo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplier under [Section 37 or Section 39], the discrepancy shall be communicated to both persons in such manner and within such time as may be prescribed. (10) The amount in respect of which any discrepancy is communicated under subsection (9) and which is not rectified by the supplier in his valid return or the operator in his statement for the month in which discrepancy is communicated, shall be added to the output tax liability of the said supplier, where the value of outward supplies furnished by the operator is more than the value of outward supplies furnished by the supplier, in his return for the month succeeding the month in which the discrepancy is communicated in such manner as may be prescribed. (11) The concerned supplier, in whose output tax liability any amount has been added under sub-section (10), shall pay the tax payable in respect of such supply along with interest, at the rate specified under subsection (1) of Section 50 on the amount so added from the date such tax was due till the date of its payment. (12) Any authority not below the rank of Deputy Commissioner may serve a notice, either before or during the course of any proceedings u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....foreign countries or any other person or class of persons, as notified under Section 55, entitled to a refund of tax paid by it on inward supplies of goods or services or both, may make an application for such refund, in such form and manner as may be prescribed, before the expiry of [two years] from the last day of the quarter in which such supply was received. (3) Subject to the provisions of sub-section (10), a registered person may claim refund of any unutilised input tax credit at the end of any tax period: Provided that no refund of unutilised input tax credit shall be allowed in cases other than- (i) zero rated supplies made without payment of tax; (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council: [* * *] Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a) refund of tax paid on ["export" and "exports"] of goods or services or both or on inputs or input services used in making such zero-rated supplies; (b) refund of unutilised input tax credit under sub-section (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued; (d) refund of tax in pursuance of Section 77; (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify. [(8-A) The Government may disburse the refund of the State tax in such manner as may be prescribed.] (9) Notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or in any other provisions of this Act or the rules made thereunder or in any other law for the time being in force, no refund shall be made except ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... thousand rupees. [(15) Notwithstanding anything contained in this section, no refund of unutilised input tax credit on account of zero rated supply of goods or of integrated tax paid on account of zero rated supply of goods shall be allowed where such zero rated supply of goods is subjected to export duty.] Explanation.-For the purposes of this section,- (1) "refund" includes refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3). (2) "relevant date" means- (a) in the case of goods exported out of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods,- (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or (ii) if the goods are exported by land, the date on which such goods pass the frontier; or (iii) if the g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re 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 and the proper officer shall pass an order, within a period not later than ninety days from the date of receipt of such request, allowing payment of tax on provisional basis at such rate or on such value as may be specified by him. (2) The payment of tax on provisional basis may be allowed, if the taxable person executes a bond in such form as may be prescribed, and with such surety or security as the proper officer may deem fit, binding the taxable person for payment of the difference between the amount of tax as may be finally assessed and the amount of tax provisionally assessed. (3) The proper officer shall, within a period not exceeding six months from the date of the communication of the order issued under subsection (1), pass the final assessment order after taking into account such information as may be required for finalizing the assessment: Provided that the period specified in this sub-section may, on sufficient c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ficer may proceed to assess the tax liability of the said person to the best of his judgement taking into account all the relevant material which is available or which he has gathered and issue an assessment order within a period of five years from the date specified under Section 44 for furnishing of the annual return for the financial year to which the tax not paid relates. (2) Where the registered person furnishes a valid return within [sixty days] of the service of the assessment order under sub-section (1), the said assessment order shall be deemed to have been withdrawn but the liability for payment of interest under sub-section (1) of Section 50 or for payment of late fee under Section 47 shall continue: [Provided that where the registered person fails to furnish a valid return within sixty days of the service of the assessment order under sub-section (1), he may furnish the same within a further period of sixty days on payment of an additional late fee of one hundred rupees for each day of delay beyond sixty days of the service of the said assessment order and in case he furnishes valid return within such extended period, the said assessment order shall be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion (1) may conduct audit at the place of business of the registered person or in their office. (3) The registered person shall be informed by way of a notice not less than fifteen working days prior to the conduct of audit in such manner as may be prescribed. (4) The audit under sub-section (1) shall be completed within a period of three months from the date of commencement of the audit: Provided that where the Commissioner is satisfied that audit in respect of such registered person cannot be completed within three months, he may, for the reasons to be recorded in writing, extend the period by a further period not exceeding six months. Explanation.-For the purposes of this subsection, the expression "commencement of audit" shall mean the date on which the records and other documents, called for by the tax authorities, are made available by the registered person or the actual institution of audit at the place of business, whichever is later. (5) During the course of audit, the authorised officer may require the registered person,- (i) to afford him the necessary facility to verify the books of account or other documents as he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....b-section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and such determination shall be final. (6) Where the special audit conducted under sub-section (1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under Section 73 or Section 74 [or Section 74A]." "67. Power of inspection, search and seizure.-(1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that- (a) a taxable person has suppressed any transaction relating to supply of goods or services or both or the stock of goods in hand, or has claimed input tax credit in excess of his entitlement under this Act or has indulged in contravention of any of the provisions of this Act or the rules made thereunder to evade tax under this Act; or (b) any person engaged in the business of transporting goods or an owner or operator of a warehouse or a godown or any other place is keeping goods which have escaped payment of tax or has kept his accounts or goods in such a ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... behalf except where making such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect the investigation. (6) The goods so seized under subsection (2) shall be released, on a provisional basis, upon execution of a bond and furnishing of a security, in such manner and of such quantum, respectively, as may be prescribed or on payment of applicable tax, interest and penalty payable, as the case may be. (7) Where any goods are seized under sub-section (2) and no notice in respect thereof is given within six months of the seizure of the goods, the goods shall be returned to the person from whose possession they were seized: Provided that the period of six months may, on sufficient cause being shown, be extended by the proper officer for a further period not exceeding six months. (8) The Government may, having regard to the perishable or hazardous nature of any goods, depreciation in the value of the goods with the passage of time, constraints of storage space for the goods or any other relevant considerations, by notification, specify the goods or class of goods which shall, as soon as may be after its seizure ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 subsection (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 not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eously 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 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 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 i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....b-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 under the same proceedings is issued to the 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 and 125] are deemed to be concluded. Explanation 2.- [* * *]" 26. In terms of Section 2(106), the tax period would mean the period for which a return is required to be furnished. 27. Chapter IX of the Act deals with the filing of returns. Section 37 requires every r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....date" is defined in clause (2) of the Explanation thereto. Chapter XII of the Act provides for assessment. Section 59 mandates that every registered person shall self-assess the tax payable under the Act and furnish returns for each tax period as specified under Section 39. Section 39 pertains to the furnishing of monthly returns. Section 60 provides for provisional assessment in cases where a taxable person is unable to determine the value of goods or services or both or the rate of tax applicable thereto. Upon a written request being made to the proper officer, the proper officer may pass an order permitting payment of tax on a provisional basis at such rate or on such value as may be specified. Section 61 enables the proper officer to scrutinize the return and the related particulars furnished by a registered person. While undertaking such scrutiny, if any discrepancies are noticed, the proper officer is required to inform the registered person and seek an explanation. If the explanation furnished is found satisfactory, the registered person is to be informed accordingly, and no further action is contemplated. However, if no satisfactory explanation is furnished within a period ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rroneously refunded, or where input tax credit has been wrongly availed or utilised, the proper officer is required to initiate proceedings under Sections 73 or 74 of the Act. Even in the context of Section 65, therefore, Sections 73 and 74 cannot be construed as being confined to a financial year. 29. Section 66 of the Act prescribes for special audit of the books of account of a registered person by a Chartered Accountant or a Cost Accountant nominated by the Commissioner and such special audit is not confined to a specific period or to a financial year. Sub-section (6) of Section 66 provides that, upon submission of the Special Audit Report, if it is found that tax has not been paid or has been short paid, or has been erroneously refunded, or that input tax credit has been wrongly availed or utilised, the proper officer is required to initiate proceedings under Sections 73 or 74 of the Act. 30. A conjoint reading of Section 66 with Sections 73 and 74 of the Act would not indicate that such proceedings are to be confined to a tax period or a financial year. 31. Section 67 of the Act under Chapter XIV deals with inspection, search, seizure and arrest. The material unearth....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or restrict the scope of issuance of notice under Sections 73 and 74. Only because Sub-Section (10) of Sections 73 and 74 of the Act refers to financial year, the entire provision cannot be construed as being confined to a financial year. A reading of Sections 73 and 74 of the Act would make it clear that it provides a complete mechanism for determination of demand and it constitutes a code in itself. 34. A plain reading of Section 74 would indicate that Sub-section (2) mandates that the show cause notice under sub-section (1) shall be issued at least six months prior to the time limit specified under subsection (10). Sub-section (3) enables issuance of a statement containing details of tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilised, for periods other than those covered under sub-section (1). Upon issuance of such a statement, sub-section (4) deems it to be a notice under Section 73(1), unless the case involves fraud, wilful misstatement, or suppression of facts to evade tax. Sub-section (5) provides an opportunity to the person chargeable to tax to pay the amount of tax along with interest and a penalty equivalent to 15% of such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a financial year, sub-section (3) expressly enables the proper officer to serve a statement containing details of tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilised, for "such periods" other than those covered under sub-section (1). The use of the expression "such periods" in sub-section (3) is significant. If the legislative intent was to confine proceedings strictly to a financial year, the language employed in sub-section (3) would have been materially different. Further, if sub-section (1) were to be restricted to a financial year, i.e., a period of twelve months, no additional period could be brought within the ambit of the same proceedings as contemplated under sub-section (3). Such a restrictive interpretation would render sub-section (3) unworkable and lead to an anomalous situation. Therefore, construing Sections 73/74 in the manner suggested by the respondents would result in manifest absurdity, which is impermissible in statutory interpretation. 35. To appreciate the contention of the learned counsel for the respondent/assessee Sri. Bharath, placing reliance on Form-GST DRC-01, it would be necessary to go through the said f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r under Sections 73 and 74 of the Act. 36. It is contended that, where a consolidated show cause notice is issued, the period covered therein may include cases involving fraud, misrepresentation, or suppression of facts (FMS), as well as cases not involving such elements (non-FMS). Since Section 73 governs non-FMS cases and Section 74 governs FMS cases, each prescribing different periods of limitation for conclusion of proceedings, it is urged that issuance of show cause notices with reference to specific tax periods is necessary to avoid anomalies. However, Circular No.5/2023-GST dated 13.12.2023 answers this contention and the relevant paragraph of the circular reads as follows: "3.3 From the perusal of wording of section 74(1) of CGST Act, it is evident that section 74(1) can be invoked only in cases where there is a fraud or wilful mis- statement or suppression of facts to evade tax on the part of the said taxpayer. Section 74(1) cannot be invoked merely on account of non-payment of GST, without specific element of fraud or wilful mis-statement or suppression of facts to evade tax. Therefore, only in the cases where the investigation indicates that there is material....
X X X X Extracts X X X X
X X X X Extracts X X X X
....atements for the same or extended period. The Circular, taking note of the possibility that such additional statements may alter the pecuniary jurisdiction, provides a mechanism, whereby jurisdiction is determined based on the total amount involved in the proceedings. It is further clarified that, if the pecuniary jurisdiction changes by virtue of subsequent statements, the proceedings stand transferred to the appropriate proper officer having the requisite jurisdiction. 40. Thus, it is not a case where adjudication would be undertaken dehors pecuniary jurisdiction. The submission that, if show cause notices are confined to a financial year or tax period, the pecuniary jurisdiction would remain at a lower level, whereas aggregation would enhance the quantum and shift jurisdiction to a higher authority, is of no relevance. The assessee's concern is only that the show cause notice be adjudicated by a proper officer vested with jurisdiction, whether territorial or pecuniary. 41. It is settled position of law that an assessee has no right to chose the Adjudicating Authority. Merely because combining of more than one financial year, the pecuniary jurisdiction shifts to an officer ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 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 2023-2024, 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.- (1) and (2)... (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 for such tax periods other than those covered under sub-section (1) are the same as are mentioned in the ear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 utilisation of ITC in one financial year may actually not be capable of by itself establishing the pattern of fraudulent availment or utilisation. It is only when the series of transactions are analysed, investigated, and enquired into, and a consistent pattern is established, that the fraudulent availment and utilisation of ITC may be revealed. The language in the abovementioned provisions, i.e., the word "period" or "periods" as against "financial year" or "assessment year" are therefore, significant. 48. The ITC mechanism is one of the salient features of the GST regime....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ictitious entities in the alleged evasion of ITC. As per the contents of the said press release, a total of 29,273 non-genuine firms have purportedly been found to be involved in the evasion of ITC amounting to approximately Rs. 44,015 crores, as unearthed during a sustained enforcement drive undertaken by the GST authorities across the country since May 2023 against non-existent taxpayers. The relevant portion of the said release reads as under: "To curb frauds in Goods and Services Tax (GST) and increase compliance, the GST formations, under the Central Board of Indirect Taxes and Customs (CBIC) and the State/UT Governments, across the country are carrying out a focused drive on the issue of non-existent/bogus registrations and issuance of fake invoices without any underlying supply of goods and services. Since the initiation of the special drive against fake registrations in mid-May 2023, a total of 29,273 bogus firms involved in suspected input-tax credit (ITC) evasion of Rs. 44,015 crores have been detected. This has saved Rs. 4,646 crores of which Rs. 3,802 crores is by blocking of ITC and Rs. 844 crores is by way of recovery. So far, 121 arrests have been m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ible under the purview of section 74 of the CGST Act, and hence, the said argument cannot be a ground for entertaining a writ petition. 54. The present case appears to be one such case where a substantial amount of ITC is alleged to have been availed/utilised running into more than Rs. 83 crores. The petitioner is alleged to be one of the main entities/persons involved in the said activity. The transactions are between the years 2017 to 2021. A consolidated notice is, therefore, not merely permissible but, in fact, required in such cases in order to establish the illegal modality adopted by such businesses and entities. The language of the provision itself does not prevent issuance of SCN or order for multiple years in a consolidated manner. 55. Even in the order which has been impugned before this court, the details of the amounts for each year are set out clearly in the content of the order itself and is, therefore, clearly decipherable. Thus, it cannot be held that the issuance of consolidated notice or order violates the language of the provisions. Especially, in the case of fraudulent availment of ITC or utilisation of ITC such consolidated notice and order w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of tax, wrongful refund or wrongful availment or utilization of ITC. The challenge to the proceedings on the ground of multiple noticees has arisen (in this batch of petitions), in adjudication proceedings arising under Section 74 of the Acts and not under Section 73 of the Acts. As extracted above, the provisions of Section 74(12) of the Acts are specific. Clearly, they allow for multiple noticees to be included in one notice. Upon that specific inclusion made by the legislature, the submission to the contrary carries no weight. Suffice to note, there is no challenge to the validity of Section 74(12) of the Acts. Once the legislature clearly contemplates issuance of one notice with respect to disputed quantified demand, there survives no room to consider that submission, any further. 88. Wherever it may be disputed that multiple noticees have been wrongly roped in together, that issue by very nature, would remain a mixed question of fact and law. Evidence would have to be led before any firm conclusion may be drawn, i.e. whether the dispute is such as may involve more than one noticee. It may normally be examined during statutory proceedings. 89. Therefore, while....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sue of composite notice, for different FYs and multiple noticees, is decided against the petitioners.........." 47. The High Court of Jammu & Kashmir and Ladakh, in New Gee Enn & Sons vs. Union of India, 2025 SCC OnLine J&K 1180, framed the question and answered it as under: "Q. No. 4. Whether the bunching of two show cause notices pertaining to tax period with effect from July 2017 to April 2019 which falls in two financial years i.e., 2017-2018 and 2018-2019 is permissible under the provisions of CGST Act, 2017/JKGST Act of 2017? 37. From the reading of entire CGST/JKGST Act, one would not find any prohibition for issuing one composite show cause notice for multiple financial years. Sections 73 and 74 would only require that: (1) the period of demand must be specified; (2) show cause notice must be issued within limitation; (3) the notice must contain clear grounds, specific allegations and year wise quantification; 38. If the aforesaid requirements are met, there would be no bar in bunching of financial years, more particularly, when the requirement of principles of natural justice is adequately met. 39. We are th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions 73/74, it has been held that issuance of a common show cause notice covering multiple financial years is permissible. 48. Learned counsel for the respondents/assesses in support of their contention that show cause notices issued under Sections 73 and 74 of the Act shall confine to a financial year and cannot be for multiple financial years, relied upon certain judgments and some of the judgments are discussed below: The Bombay High Court, in Milroc Good Earth Developers vs. Union of India, [(2025) 179 taxmann.com 465 (Bom.)], while referring to the judgment of the Kerala High Court in Tharayil Medicals vs. Commissioner, Audit Division-IV, [(2025) 173 taxmann.com 867 (Kerala)], and also taking note of the judgment of the Delhi High Court in Ambika Traders (supra), held that the action of the respondent No. 2 (proper officer) in issuing consolidated show cause notices for multiple financial years was without jurisdiction, and, treating the same as a case of judicial overreach, quashed the notices. The Bombay High Court, in Paras Stone Industries vs. Union of India, [(2026) 182 taxmann.com 643 (Bom.)], placing reliance on its earlier decision in Milroc Good ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Apex Court in the decision reported in. Caltex (India) Ltd's case supra has held that 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. The said law was laid down keeping in mind that each and every Assessment Year will have a separate period of limitation and the limitation will start independently and that is the reason why the Hon'ble Supreme Court has held that each assessment year could be easily split up and dissected and the items can be separated and taxed for different periods. The said principle would apply to the present case as well." 50. The High Court of Kerala, in Tharayil Medicals vs. Commissioner, Audit Division-IV, [(2025) 173 taxmann.com 867 (Kerala)/ 2025 SCC OnLine Ker 2334], has held as under: "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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., in S.J. Constructions vs. Commissioner, 2025 SCC OnLine AP 3334 / (2025) 178 taxmann.com 570 (Andhra Pradesh), has held as under: "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. 14. Section 73 is applicable where tax has not been determined and paid properly, for reasons other than fraud or willful-misstatement or suppression of facts. Section 74 applies to determination of tax where such tax has not been properly determined or tax not paid or calculated on account of fraud, willful-misstatement or suppression of facts. Both these provisions envisage issuance of notice to the registered person for bringing to his attention, the view of the competent authority that appropriate tax has not been dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 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." 52. The Kerala High Court in Tharayil Medicals (supra), while deciding the issue, has primarily proceeded on the basis of the reference to "financial year" in sub-section (10) of Sections 73/74, to conclude that a show cause notice covering multiple financial years is not permissible. However, the said judgment does not examine the entire scheme of the Act, nor does it analyse the scope and ambit of Sections 73/74 in their proper context. As observed hereinabove, the effect of sub-section (3) of Sections 73/74, which enables ext....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Bombay, Kerala, Madras, Andhra Pradesh, and Himachal Pradesh. Accordingly, we respectfully decline to follow the said judgments. 60. Learned Single Judge in the impugned order held that common/consolidated show cause notice and the period covering beyond financial year is not permissible. Such finding is arrived by following the judgment of the Madras High Court in Titan Company Limited and also on interpreting Section 73(10) of the Act. 61. In view of the findings recorded hereinabove, the conclusion reached by learned Single Judge is contrary to scheme of the Act resulting in rewriting of the provisions, which is not permissible. The order of learned Single Judge is not sustainable and is to be set aside. 62. In W.A.No.1590/2014, the respondents challenged the show cause notice issued under Section 74 of the Act as well as the Order-in-Original dated 21.11.2023. The learned Single Judge quashed the show cause notice issued under Section 74 of the Act on the ground that issuance of a common show cause notice for multiple financial years is not permissible. In light of the findings recorded hereinabove, we hold that issuance of a consolidated/common show cause notice f....