The Madhya Pradesh High Court at Jabalpur has directed the authorities not to take any coercive action against an assessee in proceedings initiated under Section 74 of the Madhya Pradesh Goods and Services Tax (MPGST) Act, observing that where assessment proceedings for one year were already being contested before the same Assessing Officer, the authorities ought to proceed with the remaining assessment years sequentially so that the assessee could effectively participate.

The bench of Acting Chief Justice Vivek Rusia and Justice Pradeep Mittal has observed that the petitioner had already participated in the 2019-20 proceedings and that the proceedings had culminated in an order after consideration of its detailed reply, with the demand being substantially reduced. This circumstance was relevant to the Court’s conclusion that the remaining proceedings should not be hurried through simultaneously.

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The dispute arose after the Assistant Commissioner, State Tax, Circle Sehore initiated proceedings under Section 74 of the MPGST Act for several assessment years, namely 2019-20, 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25.

According to the High Court’s order, show cause notices in respect of these proceedings were issued in August 2025. Thus, the tax proceedings covered six consecutive assessment years and were being dealt with by the same assessment authority. 

Section 74 proceedings under the GST law concern cases involving alleged tax not paid, short paid, erroneous refund or wrongly availed or utilised input tax credit where the authorities allege fraud, wilful misstatement or suppression of facts.

A significant aspect considered by the High Court was the manner in which the assessment proceedings for the different years were being conducted.

For the assessment year 2019-20, the petitioner had participated in the proceedings and submitted a detailed reply to the show cause notice. After considering the assessee’s response, the Assessing Officer passed the final order and substantially reduced the demand. 

The order therefore records that the assessee was not avoiding the statutory proceedings. Rather, it had actively participated in the proceedings for one assessment year and had obtained a reduction in the demand after its submissions were considered.

At the same time, the same Assessment Officer continued proceedings concerning the assessment years 2020-21, 2021-22, 2022-23 and 2023-24.

During these proceedings, the petitioner sought an adjournment, pointing out that it was already participating in the proceedings relating to assessment year 2019-20 before the same officer. The record specifically noted the simultaneous proceedings and the assessee’s participation in the earlier assessment year. 

The petitioner’s grievance before the High Court was essentially that the authorities were proceeding with multiple assessments simultaneously despite the assessee already being engaged in proceedings concerning another assessment year before the same officer.

The Court took note of the fact that proceedings for one assessment year were already being pursued between the same parties before the same Assessment Officer.

The Bench observed that, in such circumstances, there was no urgency to proceed with the assessment proceedings for the remaining years simultaneously. Instead, the authorities were required to take up the proceedings one by one, enabling the petitioner-assessee to participate effectively. 

The observation assumes significance from the perspective of procedural fairness in GST assessment proceedings. While the order does not hold that multiple-year proceedings under Section 74 are inherently impermissible, it makes clear that the manner and timing of such proceedings must allow the assessee a meaningful opportunity to participate.

Taking these circumstances into consideration, the High Court directed that no coercive action be taken against the petitioner. 

The order records that the State accepted notice through its Government Advocate and sought time to file a reply. The Court consequently issued notice and granted protection against coercive measures at this stage. 

The order was passed by a Bench comprising Acting Chief Justice Vivek Rusia and Justice Pradeep Mittal. 

The core observation of the High Court was that the authorities were required to take the assessment proceedings one by one so that the petitioner-assessee could effectively participate. 

The order, however, is an interim procedural order and does not finally adjudicate the underlying tax liability for the assessment years concerned. The State has been given an opportunity to file its reply, while the petitioner has received protection from coercive action during the pendency of the proceedings.

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