TaxTMI 
TaxTMI 
2026 (6) TMI 576
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Writ Petitioners in WP(C) No. 2922/2025 and WP(C) No. 20/2026 and Mr. D. Das, the learned counsel appearing on behalf of the Petitioner in WP(C) No. 1113/2026. I have also heard Mr. S. C. Keyal, the learned Senior counsel assisted by Mr. K. Jain, the learned counsel appearing on behalf of the Respondents. 2. The writ petitioners in the three writ petitions have alternative and efficacious remedy under the provisions of the Central goods and Service Tax Act, 2017 (for short 'the Act of 2017'). However, the writ petitioners have approached this Court raising a common jurisdictional issue on the maintainability of the proceedings initiated against them. It is under such circumstances, the three writ petitions are taken up for disposal by this common judgment and order. 3. The jurisdictional issue which has been raised in the batch of writ petitions is as to whether the Proper Officer in exercise of the powers conferred under Section 73 or Section 74 of the Act of 2017 would have the jurisdiction to issue a consolidated show cause notice encompassing different financial years. 4. It is the specific case of the Petitioners in the present batch of writ petitions that if ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....No.5 confirmed the demand as proposed in the Show Cause Notices dated 27.12.2023 and 28.12.2023. It is under such circumstances, the Petitioner had approached this Court by filing the present writ petition. 10. At this stage, it is pertinent to observe that in terms with Section 112 of the Act of 2017, any person aggrieved by an order passed against him under Section 107 or Section 108 of the Act of 2017 or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act may appeal to the Appellate Tribunal against such order within a period of 3 (three) months from the date on which the order sought to be appealed against was communicated to the person preferring the appeal or the date as may be notified by the Government, on the recommendation of the GST Council, for filing the appeal before the Appellate Tribunal under the Act of 2017 whichever is later. 11. The records reveal that this Court vide an order dated 09.06.2025 issued notice and passed an interim order to the effect that no coercive action shall be taken against the Petitioner in terms with the Order-in-Appeal dated 06.02.2025. The interim order thereupon had been extended from time to tim....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed the Order-in-Appeal dated 26.08.2025 thereby confirming the demand as was passed in the Order-in-Original dated 04.02.2025. Being aggrieved, the Petitioner had filed the instant writ petition. 18. It may not be out of place to mention that the two partners of the Petitioner who have been imposed penalty under Section 122(1A) of the Act of 2017 have filed separate writ petitions before this Court which are registered and numbered as WP(C) No. 24/2026 and WP(C) No. 25/2026 wherein separate jurisdictional issues have been raised and as such, the said writ petitions are separately dealt with by a separate judgment and order. It may not be out of place to mention that if the jurisdictional issue raised by the Petitioner herein is adjudicated in favour of the Petitioner, the jurisdictional issues raised in the writ petitions filed by the partners need not be gone into. 19. This Court vide an order dated 07.01.2026 issued notice and directed that no coercive action in pursuance to order passed by the Respondent Authorities be initiated against the writ petitioner. The interim order thereupon had been extended from time to time. The Respondents in the instant proceedings have not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the writ petitioner in WP(C) No. 1113/2026 submitted as under: (A) The entire statutory architecture of the Goods and Service Tax regime is built around distinct tax period and independent financial years. Returns are filed tax period wise under Section 39 of the Act of 2017. Annual returns are filed financial year wise under Section 44. Limitation under Sections 73(10) and 74(10) of the Act of 2017 is computed separately for each financial year. Maintenance of books and records is also financial year specific. It is therefore the submission of the learned counsels for the Petitioners that the Act of 2017 itself recognizes every financial year as an independent unit for determination of tax liability. The learned counsels further submitted that Section 2(11) of the Act of 2017 defines "assessment" to mean determination of tax liability under the Act of 2017 and specifically include self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment. A proceeding under Section 73 and 74 of the Act of 2017 is nothing but determination of tax liability and therefore squarely fall within the definition of assessment. It was further submi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r of the Petitioners that there cannot be initiation of consolidated Show Cause proceedings under Section 73 or 74 of the Act of 2017 for multiple financial years. In that regard, the learned counsels referred to the following judgments: (i) M/S Tharayil Medicals Vs. The Deputy Commissioner [2025-TIOL-828-HC-KERALA-GST]; (ii) Dhanlaxmi Bank Limited & Another Vs. Union of India & Others [2026-TIOL-353-HC-KERALA-GST]; (iii) M/S Oriental Lotus Hotel Supplies Private Limited Vs. The Joint Commissioner, Chennai GST Audit II, Commissionerate [2025-TIOL-1869-HC-MAD-GST]; (iv) Titan Company Ltd. Vs. Joint Commissioner of GST & C. Ex. & Another [2024 (1) TMI 619]; (v) Milroc Good Earth Developers Vs. Union of India [WP 2203/2025]; (vi) Marfani Steel Impex Vs. Principal Commissioner, CGST & Central Excise, Nagpur, [(2026) 39 Centax 300 (Bom.); (vii) Aasawa Brother Corporate Avenue Vs. Union of India & Others., [WP No.11644 of 2025]; and (viii) Uber India Systems Private Limited Vs. Deputy Commissioner of Central Tax Superintendent [WP No.19740/2024]. (D) In addition to that, the learned counsels for the Petition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance of statement for period other than those covered under Sub-Section (1) of Sections 73 and 74 of the Act of 2017 which are deemed to be notices for the purpose of adjudication. The use of the expression "for any period" and "for such periods" unmistakably indicates that the legislature consciously permitted consolidated proceedings in respect of multiple years. The said aspect is in clear contrast with Section 73(10) and 74(10) of the Act of 2017 where the expression "financial year" has been specifically employed only for the purpose of computation of limitation for passing adjudication orders. Consequently, while limitation is to be reckoned independently for each financial year, there exists no statutory embargo against issuance of consolidated Show Cause Notice for multiple years. 28. The learned Senior counsel therefore submitted that clubbing of multiple financial years in one Show Cause Notice is merely procedural in nature and does not extend, override or dilute the statutory timelines prescribed under the Act of 2017. It was further submitted that the issuance of the consolidated Show Cause Notices also served upon object of administrative efficiency by avoiding mul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned Senior counsel further submitted referring to Paragraph No. 44(v) of the judgment of the Supreme Court in the case of Kunhayammed (supra) that the statement of law contained in M/S Mathur Polymers (supra) therefore had attained the status of declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution and hence binding. 32. The learned Senior counsel further submitted that the learned Division Bench of the Allahabad High Court in the case of S.A. Aromatics Private Limited and Another Vs. Union of India and Others reported in 2026 SCC OnLine All 191 was of the clear view that it was permissible for the Proper Officer to issue a consolidated Show Cause Notice for different years. In that regard, he referred to paragraph Nos. 65 to 82 of the said judgment. The learned Senior counsel for the Respondents further referred to a recent judgment of the learned Division Bench of the Karnataka High Court in the case of Commissioner of Central Tax, Bengaluru and Another Vs. Chimney Hills Education Society reported in 2026 SCC OnLine Kar 3836 and submitted that the judgment passed by the learned Single Judge in the case of Pramur Homes and Shelters (su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld be required to pass an order under Sections 73(9) or Section 74(9) of the Act of 2017 has to be construed as the Adjudicating Authority. Section 2(8) of the Act of 2017 specifically defines the term "Appellate Authority" to mean the authority appointed or authorized to hear appeals as referred to in Section 107 of the Act of 2017. Section 2(9) defines the term "Appellate Tribunal" to mean the Goods and Service Tax Appellate Tribunal constituted under Section 109 of the Act of 2017. Section 2(11) of the Act of 2017 defines the term "Assessment" to mean determination of the tax liability under the Act of 2017 and includes self-assessment, reassessment, provisional assessment, summary assessment and best judgment assessment. Section 2(91) of the Act of 2017 defines the term "Proper Officer" to mean an Officer in relation to any function to be performed under the Act of 2017 and means the Commissioner or the Officer of the Central Tax who is assigned that function by the Commissioner in the Board. Section 2(106) of the Act of 2017 defines the term "Tax Period" to mean period for which the return is required to be furnished. Section 2(117) of the Act of 2017 defines....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cipal place of business at certain locations. 37. Chapter XII of the Act of 2017 is with the heading "Assessment". The said chapter contains Sections 59 to 64 of the Act of 2017. 38. Section 59 of the Act of 2017 relates to "self-assessment" whereby a registered person self-assess the taxes payable under the Act of 2017 and furnishes a return for each tax period as specified under Section 39 of the Act of 2017. 39. Section 60 of the Act of 2017 is in relation to "provisional assessment". Provisional assessment is made where the taxable person is unable to determine the value of the goods or services or both or determine the rate of tax applicable and in such circumstances, the taxable person request the Proper Officer in writing giving reasons for the payment of tax on provisional basis and the Proper Officer shall pass an order within a period not later than 90 days from the date of receipt of such request allowing the payment of tax on provisional basis at such rate or on such value as may be specified by him. 40. Section 61 of the Act of 2017 deals with "scrutiny of returns" whereby the Proper Officer scrutinizes the return and the related particulars furnished by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt order within a period of 5 (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. 43. Section 64 of the Act of 2017 relates to "Summary assessment in certain special cases". In the circumstance, the Proper Officer may on any evidence showing a tax liability of a person coming to his notice, with the previous permission of the Additional Commissioner or the Joint Commissioner, proceed to assess the tax liability of such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue. It is however relevant to mention that in such circumstances, the taxable person may file an application within 30 (thirty) days from the date of receipt of the order passed under Sub-Section (1) of Section 64 of the Act of 2017 before the Additional Commissioner or the Joint Commissioner or the said Authorities suo moto may withdraw the order passed under Section 64(1) of the Act of 2017 if the said Authorities consider such order to be erroneous and follow the proceedings laid down und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unt of tax along with interest payable thereon under section 50 on 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) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the amount actually payable, he shall proceed to issue the notice as provided for in sub-section (1) in respect of such amount which falls short of the amount actually payable. (8) Where any person chargeable with tax under sub-section (1) or sub-section (3) pays the said tax along with interest payable under section 50 within thirty days of issue of show cause notice, no penalty shall be payable and all proceedings in respect of the said notice shall be deemed to be concluded. (9) The proper officer shall, after considering the representation, if any....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 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) The person chargeable with tax may, before service of notice under sub-section (1), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen per cent of such tax on 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) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder. (7) Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the am....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sions stipulates the procedure to be followed for the purpose of determination of tax. The procedure stipulated in both the provisions appears to be similar except the cause of action for initiation of proceedings under Section 73 of the Act of 2017 is different from the cause of action for initiation of proceedings under Section 74 of the Act of 2017. 47. A reading of Section 73(1) of the Act of 2017 would show the cause of action for the purpose of issuance of a notice upon the person chargeable with tax. The cause of action is when it appears to the Proper Officer- (a) Any tax has not been paid; or (b) Short paid; or (c) Erroneously refunded; or (d) Where input tax credit have been wrongly availed or utilized for any reason. Other than the reason of fraud or any willful misstatement or suppression of facts to evade tax, A notice would be issued requiring the person chargeable with tax to show cause as to why the person chargeable with tax should not pay the amount specified in the notice along with interest payable thereon under Section 50 of the Act of 2017 and a penalty leviable under the provisions of the Act of 2017 or the Rules o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act of 2017 for issuance of the order. Similarly, in terms with Section 74(2) of the Act of 2017, the notice under Sub-Section (1) of Section 74(1) of the Act of 2017 has to be issued at least 6 (six) months prior to the time limit specified in Section 74(10) of the Act of 2017 for issuance of the order. It is however relevant to observe that Sub-Section (2) of Section 73 and Section 74 of the Act of 2017 only imposes restrictions on the time limit for issuance of notice and nothing else. 50. Before further proceeding in seriatum with the other Sub-Sections of Section 73 and Section 74 of the Act of 2017, this Court finds it relevant to take note of Section 73(10) and Section 74(10) of the Act of 2017 as there is a correlation between Section 73(10) and Section 74(10) with Section 73(2) and Section 74(2) of the Act of 2017. 51. Section 73(10) of the Act of 2017 confers the power upon the Proper Officer to pass the order under Section 73(9) of the Act of 2017 within 3 years from the due date for furnishing of the annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates to, or within 3 years fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that financial year in terms with Section 73 or Section 74 as the case may be. (B) Let this Court take the example of three financial years i.e. 2017-18, 2018-19, 2019-20 in respect to a proceeding under Section 73 of the Act of 2017. The due date for filing of the annual returns for the financial years 2017-18, 2018-19 and 2019-20 would be 31.12.2018, 31.12.2019 and 31.12.2020 except in the case of erroneous refund. The notice under Section 73(1) of the Act of 2017 in terms with Section 73(2), for the Financial year 2017-18, 2018-19, 2019-20, has to be issued on or before 30.09.2021, 30.09.2022 and 30.09.2023 respectively. The orders under Section 73(9) in respect to the financial years 2017-18, 2018-19, and 2019-20 are to be passed on or before 31.12.2021, 31.12.2022 and 31.12.2023. For the purpose of convenience, the following table would be helpful: Period Due date for filing of annual return Period within which notice under Section 73(1) is to be issued Period within which order is to be passed under Section 73(9) 2017-2018 31.12.2018 30.09.2021 31.12.2021 2018-2019 31.12.2019 30.09.2022 31.12.2022 2019-2020 31.12.2020 30.0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e a consolidated notice for 5 financial years i.e. 2017-18, 2018-19, 2019-20, 2020-21 and 2021-22 on or before 30.06.2023 and pass a common order on or before 31.12.2023. 55. The above illustrations and a reading of Sub-Section (1), Sub-Section (2), Sub-Section (9) and Sub-Section (10) of both Section 73 as well as Section 74 of the Act of 2017 do not bar issuance of a consolidated notice if for the periods for which the notice have been issued is within the period permissible under Section 73(2) as well as Section 74(2) of the Act of 2017. Likewise, if a consolidated notice is issued in terms with Section 73(1) or Section 74(1) of the Act of 2017 in consonance with Section 73(2) or 74(2) of the Act of 2017 as the case may be, in respect to the various periods, there is no bar in Section 73(9) or Section 74(9) of the Act of 2017 to pass a consolidated order if done so within the period stipulated under Section 73(10) or 74(10) of the Act of 2017 respectively. This Court also finds it relevant to observe that neither the learned counsels for the Petitioners nor a perusal of the provisions of the Act of 2017, any explicit bar could be shown or noticed for issuance of a consolidate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er under Section 73 and Section 74 of the Act of 2017? The jurisdiction so conferred is the jurisdiction to determine the tax. Therefore what would be the effect of a consolidated notice which pertains to various financial years of which in respect to one or more financial years, no notice could be issued on account of the bar contained in Section 73(2) or Section 74(2) of the Act of 2017. The answer to the said question is available in Section 73 as well as Section 74 of the Act of 2017 itself. 59. There is no quarrel with the proposition that for each financial year, a notice can be issued under Section 73(1) or Section 74(1) of the Act of 2017 within the period stipulated in Section 73(2) or and Section 74(2) of the Act of 2017. Likewise, an order for each financial year can be passed under Section 73(9) or Section 74(9) of the Act of 2017 on the basis of a valid notice within the time stipulated in Section 73(10) or Section 74(10) of the Act of 2017 as the case may be. It is the opinion of this Court that if separate notices for separate financial years and separate orders for separate financial years can be passed, the consolidated Notice for various financial years as w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rovisional Assessment, Summary Assessment and Best Judgment Assessment. Section 59 of the Act of 2017 stipulates Self Assessment; Section 60 of the Act of 2017 stipulates Provisional Assessment; Section 61 of the Act of 2017 stipulates Scrutiny Assessment; Section 62 and Section 63 of the Act of 2017 stipulates Best Judgment Assessment and Section 64 of the Act of 2017 stipulates Summary Assessment. In the previous segments of the present judgment, this Court had explained when the above forms of assessments are carried out. It is of relevance to note that self assessment is made by the registered person without the involvement of the Taxing Authorities. Scrutiny Assessment are inquisitorial in nature where the Proper Officer scrutinizes the return to verify the correctness and informs the registered person to resolve the discrepancies or explain the discrepancies. If the explanation is found satisfactory or the discrepancies are resolved by the registered person, the assessment is carried out. Provisional Assessment is at the request of the Registered person. Summary Assessment and Best Judgment Assessment are unilateral in nature whereby the Proper Offi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e ascertained or decided whereas it is only in a proceedings under Section 74 of the Act of 2017 such aspect can be decided. 62. This Court now finds it relevant to take note of Sub-Section (3) and Sub-Section (4) of Section 73 and Section 74 of the Act of 2017 which appears to be the basis of the judgments of the Delhi High Court in the case of Ambika Traders (supra) as well as M/S Mathur Polymers (supra). A perusal of Sub-Section (3) of Section 73 of the Act of 2017 shows that if a notice is issued under Sub-Section (1) of Section 73 of the Act of 2017 for any period, a discretion is also conferred upon the Proper Officer to 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. This statement is issued in terms of Rule 142(1)(b) of the Rules of 2017. It is apposite herein to mention that the notice in terms with Section 73(1) of the Act of 2017 is issued under Rule 142(1)(a) of the Rules of 2017 and the summary of the said notice is issued in FORM GST DRC-01. The statement which is served by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n (4) of Section 74 of the Act of 2017 and more particularly, the expression "those covered under Sub-Section (1)" gives a pluralistic reference to the period(s) covered in the notice under Section 74(1) of the Act of 2017. 65. The other Sub-Sections i.e. Sub-Section (5), (6), (7), (8), (11) and 12 are not necessary for the present discussion. 66. In the backdrop of the above, this Court now finds it relevant to take note of the various judgments relied upon by the learned counsels for the parties. 67. Upon perusal of the various judgments, this Court for the analysis and finding arrived at hereinabove with great respect disagrees with the judgment of the learned Division Bench of the Kerala High Court in M/S Tharayil Medicals (Supra) and Dhanlaxmi Bank Limited (supra). This Court also disagrees with the views of the Madras High Court in M/S Oriental Lotus Hotel Supplies Private Limited (supra) as well as Titan Company Limited (supra). 68. The proposition of law laid down by the Bombay High Court in Milroc Good Earth Developers (supra), Marfani Steel Impex (supra) and Aasawa Brother Corporate Avenue (supra) have been doubted by the learned Division Bench of the Bombay H....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Petitioners and taking into account that the Petitioners in WP(C) No. 2922/2025 and WP(C) No. 20/2026 have alternative and efficacious remedies available under Section 112 of the Act of 2017 and the Petitioner in WP(C) No. 1113/2026 has alternative and efficacious remedies available under Section 107 of the Act of 2017, this Court relegates the Petitioners to avail the statutory remedies stated hereinabove. 73. This Court having perused the materials on record in the three writ petitions is also of the view that the Statutory Authorities would be in a better position to adjudicate the factual issues. The question of fraud or any willful misstatement or suppression of facts to evade tax are essentially factual adjudication and as stated above, the Statutory Appellate Authorities would be in a better position to adjudicate. CONCLUSIONS: 74. Accordingly, all the three writ petitions stands disposed of with the following observations and directions: (i) This Court grants liberty to the Petitioners in the three writ petition to avail remedies before the appropriate forum under the Act of 2017. (ii) This Court further observes that in the circumstance, the....