Consolidated Notices Covering Multiple FY U/s 74 Are Impermissible Under CGST Act: Bombay HC

The Nagpur bench of Bombay High Court has held that consolidated notices covering multiple Financial Years (FYs) under Section 74 are impermissible under CGST Act. The bench of Justice Anil L. Pansare and Justice Nivedita P. Mehta has observed that the GST statutory framework is based on distinct tax periods and annual returns, and limitation periods run separately for each financial year. GST liability is linked to specific tax periods. Separate limitation periods apply for each financial year. Consolidation of tax periods would distort statutory timelines. Clubbing multiple years into a single notice undermines the taxpayer’s ability to respond effectively. The bench stated that the time limit operates 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 return for the year to which the tax dues relate. VI] Consolidation would collapse these years, specific steps and grounds, harming the tax payers’ ability to respond year by year and violating the explicit year wise structure of the statute. These niceties were not considered by the Delhi High Court in the case of M/s Mathur Polymers Vs. Union of India & Ors. The petition was filed by Speedways Logistics Pvt. Ltd. challenging a show cause notice issued by the GST Audit Commissionerate, Nagpur. The notice covered the period from April 2019 to March 2023 and alleged suppression of taxable value, short payment of GST, and wrongful availment of input tax credit (ITC). The primary contention of the petitioner was that the department had no jurisdiction to issue a consolidated notice covering multiple financial years under Section 74 of the CGST Act, as each financial year constitutes a separate tax period under the statutory framework. The petitioner relied on earlier decisions of the Bombay High Court, including the ruling in the case of Milroc Good Earth Developers, where the Court held that GST assessment and recovery proceedings must be conducted separately for each tax period. It was argued that the GST law is structured around distinct tax periods linked to returns filed for each financial year, and therefore, consolidation of multiple years into a single SCN is not permissible. The petitioner also relied on another Bombay High Court decision in Rite Water Solutions India Ltd, which reaffirmed that clubbing multiple tax periods in a single notice violates the statutory scheme and limitation provisions under Sections 73 and 74 of the CGST Act. The tax department opposed the petition, arguing that consolidated notices are permissible, particularly in cases involving allegations of fraudulent ITC. The department relied on a judgment of the Delhi High Court in Mathur Polymers, where the Court had allowed consolidated notices for multiple years in cases involving fraud. It was also argued that the Delhi High Court judgment had attained finality after the Supreme Court of India declined to interfere with the ruling. The Bench observed that since the Bombay High Court had already taken a consistent view on the issue, authorities within its jurisdiction are bound to follow those decisions unless they are stayed or overturned by the Supreme Court. The Court also noted that any proposed challenge to earlier Bombay High Court judgments would not affect their binding nature unless set aside by a higher court. The Court quashed the impugned show cause notice and held that consolidated notices covering multiple financial years under Section 74 are not permissible under the CGST Act. However, the department was granted liberty to issue fresh notices for each relevant financial year, subject to limitation and other legal requirements. Case Details Case Title: Speedways Logistics Pvt. Ltd Versus UOI Citation: JURISHOUR-187-HC-2026(Bom) Case No.: WRIT PETITION NO. 7419 OF 2025 Date: 06-02-2026 Counsel For Appellant: Ankit Kanodiya, Advocate Counsel For Respondent: Ketki Jaltare-Vaidya, Advocate Click Here To Read Order Read More: Yacht Not Liable to Duty on Return After Foreign Cruising: U.S. Customs Authority

Consolidated Notices Covering Multiple FY U/s 74 Are Impermissible Under CGST Act: Bombay HC

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