The Andhra Pradesh High Court has held that a single assessment order covering multiple financial years is unsustainable under the GST law. 

The bench of  Justice R. Raghunandan Rao and Justice Tuhin Kumar Gedela set aside the assessment order issued and directed the tax authorities to initiate separate proceedings for each assessment year. 

The petitioner argued that the assessment order violated the statutory framework under Sections 73 and 74 of the Central Goods and Services Tax (CGST) Act, 2017, because it clubbed more than one financial year into a single adjudication. According to the petitioner, the GST law contemplates independent assessment proceedings for each tax period, making the composite order legally unsustainable. 

Although several grounds were raised in the writ petition, the company confined its challenge primarily to the legality of the composite assessment itself. 

The High Court relied on its earlier Division Bench decision wherein it had categorically held that authorities cannot issue a single show cause notice or pass a composite assessment order covering more than one tax period. The earlier ruling clarified that where the due date for filing the annual return has already elapsed, each financial year must be assessed separately. 

Applying that precedent, the Bench concluded that the assessment against Piyush Pharmachem India Pvt. Ltd., which combined two financial years into one order, was contrary to law and liable to be set aside. 

The department argued that the petitioner had already pursued the statutory appellate remedy and, having failed before the appellate authority, could not subsequently challenge the original assessment order through a writ petition.

Allowing the writ petition, the High Court set aside the assessment order dated September 23, 2024, and remanded the matter to the GST authorities. The Court granted liberty to the department to commence fresh assessment proceedings separately for each assessment year in accordance with law. 

However, the relief was made subject to a condition requiring the petitioner to deposit 20% of the disputed tax within six weeks. The Bench further directed that any payments already made or amounts recovered after the impugned assessment order would be adjusted against this deposit requirement. 

The Court also protected the Revenue’s right to initiate fresh proceedings by directing that the period between the issuance of the impugned assessment order and the receipt of the High Court’s judgment would be excluded while computing the limitation period for fresh proceedings.

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