The Andhra Pradesh High Court has set aside a composite assessment order passed under Section 74 of the Central Goods and Services Tax (CGST) Act, holding that a single assessment order cannot cover multiple financial years.
The bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar directed the GST department to initiate separate proceedings for each assessment year, while preserving their right to proceed afresh in accordance with law.
The petitioner challenged an assessment order passed under Section 74 of the GST Act covering the tax period from January 2020 to September 2022, spanning multiple financial years. The petitioner contended that the order was illegal on several grounds, including that the assessment was barred by limitation for certain financial years. No opportunity of cross-examination was granted, violating the principles of natural justice. A single consolidated assessment order had been passed for multiple assessment years, contrary to law and earlier judicial precedents.
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During the hearing, the petitioner primarily relied upon an earlier Division Bench decision of the Andhra Pradesh High Court in W.P. No. 11028 of 2025 and batch (M/s SJ Constructions).
According to that judgment, the Court had already held that a single show cause notice or a single composite assessment order cannot be issued for more than one tax period. Once the due date for filing the annual return has expired, each financial year constitutes a separate assessment period requiring independent proceedings.
The Bench observed that although several grounds had been raised against the assessment order, the petitioner chose to press only the principal legal issue concerning the validity of the composite assessment order.
The Court noted that the earlier Division Bench judgment squarely covered the controversy. Since the impugned assessment order clubbed together multiple financial years into one proceeding, it could not be sustained under Sections 73 and 74 of the GST Act.
The Andhra Pradesh High Court set aside the assessment order dated 28 March 2026; granted liberty to the GST authorities to initiate fresh proceedings separately for each assessment year; and left all other legal grounds raised by the petitioner open for consideration in future proceedings.
The Court clarified that the period between the passing of the impugned assessment order and the receipt of the High Court’s order shall be excluded while computing the limitation period for initiating fresh proceedings.
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