Composite GST SCN Covering Multiple FYs Quashed: Bombay High Court

The Nagpur Bench of the Bombay High Court has quashed a show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017, holding that clubbed or composite notices covering multiple financial years are impermissible under the statutory scheme of GST law. The Bench of Justice Anil L. Pansare and Justice Nivedita P. Mehta has observed that time limits operate year by year. Section 73(10) and 74(10) of the CGST Act fix the time limit to issue an assessment order within three years (Section 73) or five years (Section 74) from the last date for filing annual returns for the year to which the tax dues relate. The petitioner had challenged a show cause notice dated 30 May 2025, issued by the Joint Commissioner, CGST, Nagpur-I, alleging suppression of taxable value and short payment of tax for a consolidated period spanning April 2018 to March 2024. The notice proposed demand proceedings under Section 74 of the CGST Act, which deals with cases involving fraud, wilful misstatement, or suppression of facts. The core contention raised by the petitioner was that GST law does not permit clubbing of distinct financial years into a single show cause notice, as each tax period is governed by separate limitation timelines and statutory obligations. The Court reiterated that the GST framework is built on definite tax periods, linked to annual returns, and that Sections 73 and 74 prescribe separate limitation periods for each financial year. Consequently, consolidation of multiple years into a single notice would distort the statutory limitation scheme and prejudice the taxpayer’s right to respond effectively. The rdepartment opposed the petition, citing the Delhi High Court’s judgment in Mathur Polymers v. Union of India, where consolidated notices were held permissible in cases involving fraudulent ITC availment across several years. It was also argued that the Supreme Court had declined to interfere with the Delhi High Court ruling. However, the Bombay High Court rejected this argument, observing that the Supreme Court dismissal was in limine, without adjudication on merits, and therefore the doctrine of merger did not apply. The Delhi High Court had not examined critical aspects such as year-wise limitation, statutory definition of “tax period,” and the impact of consolidation on taxpayer rights. The Bench emphasized that within the territorial jurisdiction of Bombay High Court, its own later and reasoned judgments would prevail, especially where they take a different view from another High Court. The Court underlined several principles forming the basis of its decision: GST liability is intrinsically linked to specific financial years, even if returns are filed monthly. Limitation under Sections 73(10) and 74(10) runs independently for each year. A composite notice impermissibly aggregates different limitation periods and tax obligations. Such consolidation undermines procedural fairness and the statutory structure of GST law. Allowing the writ petition in part, the Court quashed and set aside the impugned show cause notice dated 30 May 2025, and granted liberty to the department to re-issue fresh notices strictly in accordance with Section 74, provided there is no other legal impediment. The Court also recorded the revenue’s submission that proposals are under consideration to challenge earlier Bombay High Court rulings before the Supreme Court, and therefore granted liberty to revive proceedings if those judgments are later set aside. Case Details Case Title: M/s. Marfani Steel Impex Versus The Principal Commissioner, Case No.: Writ Petition No. 180 Of 2026 Date: 16/01/2026 Counsel For Petitioner: Shyam Dewani Counsel For Respondent: Ketki Jaltare Click Here To Read Order Read More: Excise Duty Weekly Flashback: 11 To 17 January 2026

Composite GST SCN Covering Multiple FYs Quashed: Bombay High Court

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