The Bombay High Court while hearing a large batch of writ petitions has raised serious doubts over the legality of issuing a single consolidated show cause notice covering multiple financial years under Sections 73 and 74 of the CGST Act, 2017 and referred the issue to a larger bench due to conflicting judicial precedents across High Courts.
The bench of Justice G. S. Kulkarni and Justice Aarti Sathe has observed that the scheme of Sections 73 and 74 of the CGST Act appears to permit flexibility in issuing notices for “any period,” and does not explicitly prohibit clubbing of multiple tax periods. The Court emphasized that sub-sections (1), (2), and (3) of these provisions, when read together, suggest that the legislature did not intend to restrict issuance of notices to a single financial year.
BUY NOW: E-Magzine: Single SCN or Composite Assessment Order for Multiple Tax Periods
The batch of petitions involved several taxpayers challenging the validity of show cause notices issued by GST authorities that clubbed multiple financial years into a single notice. The petitioners argued that such notices violate the statutory framework of the CGST Act, which treats each financial year as a separate tax period with independent limitation periods for adjudication.
The petitioners relied heavily on earlier rulings, particularly the decision in Milroc Good Earth Developers, where a coordinate bench of the Bombay High Court had held that there is no provision under GST law permitting the clubbing of multiple financial years in a single show cause notice. They contended that Sections 73(10) and 74(10) prescribe strict limitation periods linked to each financial year, thereby making consolidated notices without jurisdiction.
However, the Revenue opposed this interpretation, arguing that the GST law does not expressly bar issuance of consolidated notices. It was submitted that as long as limitation is computed separately for each financial year and adhered to, the issuance of a composite notice does not prejudice the taxpayer. The Department also relied on contrary views taken by the Delhi High Court and other High Courts, which have upheld such notices.
The Court noted that there exists a clear divergence of judicial opinion on this issue across various High Courts, including conflicting views between the Bombay High Court (Goa and Nagpur benches) and other courts like Delhi and Allahabad. It also took note of the fact that Special Leave Petitions against some of these contrary rulings were dismissed by the Supreme Court of India, further complicating the legal position.
At the same time, the Court expressed reservations about the correctness of the earlier Milroc judgment, noting that certain key legal aspects and Supreme Court rulings may not have been fully considered. It observed that GST, being an evolving law with complex transactional realities, may require a more practical and purposive interpretation to ensure effective tax administration.
The Court held that the matter requires authoritative determination by a larger bench. The reference aims to settle the legal position on whether GST authorities can validly issue consolidated show cause notices spanning multiple financial years.
Case Details
Case Title: M/s. Rollmet LLP Versus UOI
Case No.: Writ Petition No. 16848 Of 2025
Date: 17/04/2026
Counsel For Petitioner: Arshad Hidayatullah, Senior Advocate
Counsel For Respondent: Subir Kumar
Read More: 21-Month Delay in Recording Satisfaction Note Not ‘Immediate’: Bombay HC Quashes S. 153C Notices
