The Madras High Court has quashed a Goods and Services Tax (GST) assessment order passed against Instakart Services Pvt. Ltd., holding that GST department cannot club multiple financial years into a single show-cause notice or order.
The bench of Justice Krishnan Ramasamy has observed that the show cause notices/orders came to be issued/passed for more than one financial year, which is impermissible in law and hence, the same is liable to be quashed. Accordingly, the show cause notices/orders stand quashed based on the aspect of clubbing of show cause notices for more than one financial year.”
The dispute revolved around the department’s practice of issuing a single show-cause notice covering multiple financial years, in this case spanning from July 2017 to March 2023. Instakart argued that such clubbing was arbitrary, without jurisdiction, and contrary to GST law.
Both the petitioner’s counsel and the government’s counsel acknowledged that the issue had already been addressed in an earlier judgment of the Madras High Court dated July 21, 2025 (W.P. No. 29716 of 2024 and connected cases). That ruling categorically held that show-cause notices must be issued based on the tax period. If annual returns are filed, the entire financial year is treated as the tax period. Notices may be issued on monthly returns only if annual returns are pending. Once annual returns are filed, notices must correspond strictly to the relevant year. Clubbing of more than one financial year in a single notice is impermissible under law.
Relying on the earlier ruling, Justice Ramasamy held that the impugned orders against Instakart were issued without jurisdiction and therefore liable to be quashed.
“The impugned order came to be passed for more than one financial year, which is impermissible in law and hence, the same is liable to be quashed,” the court observed.
Accordingly, the January 6, 2025 assessment order and the April 30, 2025 rectification order were set aside. However, the court granted liberty to the GST department to initiate fresh proceedings separately for each financial year.
The decision is expected to impact similar disputes pending before tax authorities and courts, especially in cases where businesses have been served consolidated notices spanning several years.
The writ petition was disposed of with no order as to costs, and connected miscellaneous petitions were also closed.
Case Details
Case Title: Instakart Services Private Limited Versus The Additional Commissioner
Case No.: W.P.No.31551 of 2025 & W.M.P.Nos.35344 & 35345 of 2025
Date: 22.08.2025
Counsel For Petitioner: Kumar Vishalaksh
Counsel For Respondent: Sai Srujan Tayi
Read More: Lack of DIN on GST Order Is Invalid But Not Void: Andhra Pradesh High Court
