The Karnataka High Court has held that the issuance of consolidated or common show cause notices under Sections 73 and 74 of the Central Goods and Services Tax (CGST) Act, 2017 covering multiple financial years is legally permissible.
The bench of Justice S.G. Pandit and Justice K.V. Aravind delivered the judgment while allowing a batch of writ appeals filed by the department against orders of the Single Judge.
The appeals arose from a series of cases where the Revenue had issued show cause notices alleging tax short payment, fraud, suppression of facts, or misstatement for extended periods spanning several financial years. The Single Judge had earlier quashed such notices, holding that proceedings under Sections 73 and 74 must be confined to a single financial year, and that consolidated notices were impermissible. However, the Division Bench disagreed with this interpretation and overturned the earlier view.
The Court framed the central issue as whether the GST law permits issuance of a common show cause notice covering multiple financial years or tax periods. Answering this in the affirmative, the Bench held that nothing in Sections 73 or 74 of the CGST Act restricts the issuance of notices to a single financial year. It observed that the statutory language uses the expression “any period,” which indicates legislative intent to allow flexibility rather than impose a rigid financial year-wise limitation.
Rejecting the argument that GST proceedings are inherently financial year-specific, the Court clarified that while returns, assessments, and reconciliations may be structured annually, this does not restrict the power of the authorities to initiate demand and recovery proceedings across multiple periods through a single notice. It emphasized that reading such a restriction into the statute would amount to adding words not contemplated by the legislature.
The Bench also addressed concerns relating to limitation, noting that safeguards are already built into Sections 73(10) and 74(10), which prescribe timelines for adjudication. Therefore, even if a consolidated notice is issued, each component of the demand remains subject to the applicable limitation period. The Court found no legal infirmity in combining multiple tax periods within one notice so long as statutory timelines are adhered to.
On the issue of procedural fairness, the Court observed that the issuance of a show cause notice merely initiates proceedings and provides an opportunity to the assessee to respond. It reiterated that such notices should not ordinarily be interfered with at the writ stage, particularly when an effective statutory remedy is available under the GST framework.
The Court also considered the argument that consolidated notices may create complications relating to jurisdiction, pecuniary limits, or mixing of cases involving fraud and non-fraud. However, it held that such concerns can be addressed at the stage of adjudication and do not invalidate the issuance of a common notice itself. It further noted that adjudication can still be carried out year-wise even if the notice covers multiple financial years.
Importantly, the ruling aligns with similar views taken by other High Courts, including the Delhi and Allahabad High Courts, which have upheld the validity of combined show cause notices under GST law. The Karnataka High Court thus reinforced a pro-Revenue interpretation, favouring administrative efficiency and flexibility in enforcement.
The Court allowed the appeals filed by the Revenue and upheld the legality of consolidated show cause notices under Sections 73 and 74 of the CGST Act.
Case Details
Case Title: The Commissioner Of Central Tax Versus M/S Chimney Hills Education Society
Citation: JURISHOUR-1032-HC-2026(KAR)
Case No.: WRIT APPEAL No. 1751 OF 2024 (T-RES)
Date: 23/04/2026
Counsel For Appellant: Additional Advocate General Aditya Vikram Bhat
Counsel For Respondent: Bharat B. Raichandani
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