Karnataka High Court
The Additional Director vs M/S S.R.S Travels And Logistics Private … on 24 April, 2026
Author: S.G.Pandit
Bench: S.G.Pandit
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
®
DATED THIS THE 23RD DAY OF APRIL, 2026
PRESENT
THE HON'BLE MR. JUSTICE S.G.PANDIT
AND
THE HON'BLE MR. JUSTICE K. V. ARAVIND
WRIT APPEAL No. 1751 OF 2024 (T-RES)
C/W
WRIT APPEAL No. 1590 OF 2024 (T-RES)
WRIT APPEAL No. 7 OF 2025 (T-RES)
WRIT APPEAL No. 407 OF 2026 (T-RES)
WRIT APPEAL No. 495 OF 2026 (T-RES)
WRIT APPEAL No. 555 OF 2026 (T-RES)
IN WA No. 1751/2024
BETWEEN:
1. THE COMMISSIONER OF CENTRAL TAX,
BENGALURU, NORTH-WEST DIVISION,
2ND FLOOR, SHIVAJINAGAR,
BMTC BUS STAND, BENGALURU-560051.
2. THE ADDITIONAL COMMISSIONER OF CENTRAL TAX,
ANTI-EVASION, BENGALURU,
NORTH WEST DIVISION,
2ND FLOOR, SHIVAJINAGAR,
BMTC BUS STAND, BENGALURU-560051.
...APPELLANTS
(BY SRI ARAVIND V. CHAVAN, SENIOR STANDING
COUNSEL)
2
AND:
1. M/S CHIMNEY HILLS EDUCATION SOCIETY,
REPRESENTED BY ITS SECRETARY,
SHRI MARI SWAMY G.,
AGED ABOUT 60 YEARS,
SY. No.15 , CHIKKASANDRA,
HESARAGHATTA MAIN ROAD,
BENGALURU URBAN.
KARNATAKA -560090.
...RESPONDENT
(BY SRI.A.SHANKAR, SENIOR COUNSEL FOR
SRI PRANAY SHARMA Y., ADVOCATE)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO SET
ASIDE THE ORDER PASSED BY THE LEARNED SINGLE
JUDGE IN WP No.26164/2024 DATED 30/09/2024.
IN WA No. 1590/2024
BETWEEN:
1. THE ASSISTANT COMMISSIONER OF CENTRAL
TAX,
DIV-4, GST COMMISSIONERATE,
BENGALURU EAST, 2ND FLOOR,
TTMC BMTC BUS STAND,
OLD AIRPORT ROAD,
DOMMALURU, BENGALURU-560 071.
...APPELLANT
(BY SRI M. UNNIKRISHNAN, SENIOR STANDING
COUNSEL)
AND:
1. M/S. VEREMAX TECHNOLOGIE SERVICES
LIMITED,
3
INCORPORATED UNDER THE COMPANIES ACT,
REPRESENTED BY ITS SENIOR
ACCOUNTS EXECUTIVE,
SRI. VENKATESAN B.,
AGED ABOUT 33 YEARS,
No.507, HBR LAYOUT,
1ST STAGE, 4TH BLOCK,
OUTER RING ROAD,
BENGALURU URBAN-560 043.
...RESPONDENT
(BY SRI E.I. SANMATHI, ADVOCATE FOR
SRI M.N. SHANKARE GOWDA, ADVOCATE)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW
THE ABOVE APPEAL FILED BY THE APPELLANT THEREBY
SETTING ASIDE THE ORDER PASSED BY THE LEARNED
SINGLE JUDGE IN WP No.15810/2024 DATED 04/09/2024,
AND CONSEQUENTLY DISMISS THE SAID PETITION.
IN WA No. 7/2025
BETWEEN:
1. ASSISTANT COMMISSIONER OF CENTRAL TAX
(A.E.), BENGALURU SOUTH COMMISSIONERATE,
C.R.BUILDING, 5TH FLOOR,
HEAD QUARTERS PREVENTIVE UNIT,
BENGALURU 560 001.
...APPELLANT
(BY SRI ARAVIND V. CHAVAN, SENIOR STANDING
COUNSEL)
AND:
1. M/S ALBATROSS BUILDERS AND DEVELOPERS
LLP.,
REP. BY ITS PARTNER,
4
SRI.SHARATH H.P.,
No.45, 100 FEET RING ROAD,
OPP.TO MANDAVI MOTORS,
J.P.NAGAR 4TH PHASE,
BENGALURU 560 078.
...RESPONDENT
(BY SRI.K.K.CHYTHANYA, SENIOR COUNSEL FOR
SRI SANMATHI E. I., ADVOCATE)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO SET
ASIDE THE ORDER PASSED BY THE LEARNED SINGLE
JUDGE IN WP No. 23731/2024 DATED 14.11.2024.
IN WA No. 407/2026
BETWEEN:
1. PRINCIPAL COMMISSIONER OF CENTRAL TAX,
MYSORE GST COMMISSIONERATE,
VINAYA MARGA, SIDDHARTHA NAGAR,
MYSURU 570011.
2. THE ADDITIONAL COMMISSIONER OF CENTRAL
TAX,
MYSORE GST COMMISSIONERATE,
S1, S2 VINAYA MARGA,
SIDDHARTHA NAGAR,
MYSURU-570011.
3. THE SUPERINTENDENT OF CENTRAL TAX
HPU, MYSURU GST COMMISSIONERATE,
S1, S2 VINAYA MARGA,
SIDDHARTHA NAGAR,
MYSURU-570011.
4. CENTRAL BOARD OF INDIRECT TAXES
AND CUSTOMS, MINISTRY OF FINANCE,
GOVERNMENT OF INDIA,
5
REPRESENTED BY ITS CHAIRMAN,
NORTH BLOCK, NEW DELHI-110 001.
5. UNION OF INDIA
REPRESENTED BY ITS SECRETARY,
MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
NORTH BLOCK, NEW DELHI-110 001.
...APPELLANTS
(BY SRI ARAVIND V CHAVAN, SENIOR STANDING
COUNSEL)
AND:
1. M/S PRAMUR HOMES AND SHELTERS,
A PARTNERSHIP FIRM HAVING ITS
REGISTERED OFFICE AT
4TH FLOOR, No.37, VENJAY EDIFICE,
JLB ROAD, CHAMARAJAPURAM,
MYSORE 570 005,
REPRESENTED BY ITS MANAGING PARTNER,
SHRI SRINIVASA MURTHY PRAKASH,
AGED ABOUT 66 YEARS,
S/O LATE K. S. MURTHY.
...RESPONDENT
IA.2/26 M/S PAVANPUTRA RESORTS
A PROPRIETARY CONCERN
REPRESENTED HEREINBY IT PROPRIETOR
MR. C. P. DIVAKAR
HAVING ITS REGISTERED OFFICE AT:
PLOT NO.114, 116 AND 117
KIADB INDUSTRIAL AREA
H N PURA ROAD, HASSAN - 573 201.
IA.3/26 M/S EDGE SOLUTIONS
HAVING ITS REGISTERED OFFICE AT
6
NO.91, LAKSHMI NIVASA
GROUND AND 2NDFLOOR
5TH CROSS, BULLET KRISHNAPPA LAYOUT
KODIGEHALLI MAIN ROAD
VIDYARANYAPURA
BANGALORE-560 097.
IA.4/26 M/S ASWAN VENTURES
A PARTNERSHIP FIRM UNDER
THE PROVISIONS OF THE INDIAN
PARTNERSHIP ACT OF 1932
REP. BY ITS PARTNER
MR. MUZZAKIR HUSSAIN
ADDRESS NO.15/5, 3RD FLOOR
PRIME ROSE, ASHOK NAGAR
BENGALURU-560 001
ALSO AT-
R/O 37/23, YELLAPPA CHETTY LAYOUT
ULSOOR ROAD
BEHING MANIPAL CENTRE
BENGALURU-560 075.
IA.5/26 M/S CENTURY REAL ESTATE HOLDING PVT. LTD.
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT:
NO.3/1, 4TH FLOOR, JP TECHNO PARK
MILLERS TANK ROAD, VASANTHNAGAR
BANGALORE-560 052
REP. HEREIN BY ITS
VICE PRESIDENT-FINANCE AND TAXATION
MR. ANANTH KUDVA M.
...INTERVENING APPLICANTS
(BY SRI BHARAT B RAICHANDANI, ADVOCATE FOR C/R1;
SRI SANDEEP HUILGOL, ADVOCATE FOR INTERVENING
APPLICANTS IN IA 2/2026 TO IA 5/2026)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO SET
7
ASIDE THE ORDER PASSED BY THE LEARNED SINGLE
JUDGE IN WP No. 33081/2025 (T-RES) DATED
11.12.2025.
IN WA No. 495/2026
BETWEEN:
1. THE COMMISSIONER OF CENTRAL EXCISE,
BENGALURU NORTH-WEST COMMISSIONERATE,
2ND FLOOR, SOUTH WING,
BMTC BUS STAND COMPLEX,
SHIVAJINAGAR, BENGALURU - 560 051.
2. THE ADDITIONAL COMMISSIONER OF CENTRAL
TAX,
BENGALURU NORTH-WEST COMMISSIONERATE,
2ND FLOOR, SOUTH WING,
BMTC BUS STAND COMPLEX,
SHIVAJINAGAR, BENGALURU - 560 051.
3. THE OFFICE OF THE ADDITIONAL DIRECTOR
GENERAL,
DIRECTORATE GENERAL OF GST INTELLIGENCE,
BELAGAVI ZONAL UNIT,
BELAGAVI - 590 019.
4. THE UNION OF INDIA,
THROUGH THE SECRETARY,
MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
NEW DELHI-110 001.
...APPELLANTS
(BY SRI UNNIKRISHNAN M., ADVOCATE)
AND:
1. M/S. G.M. AGRO AND BEVERAGES
(INDIA) PRIVATE LIMITED,
A COMPANY INCORPORATED
8
UNDER THE COMPANIES ACT, 2013,
HAVING ITS REGISTERED OFFICE AT
PLOT No.5A1, DOOR No.1939,
HARIHAR, SHIVAMOGA ROAD,
HARIHAR TALUK, BELLUDI,
DAVANGERE - 577 601,
REP. BY ITS DIRECTOR.
...RESPONDENT
(BY SRI VINAY N., ADVOCATE)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO ALLOW
THE ABOVE WRIT APPEAL FILED BY THE APPELLANTS
THEREBY SETTING ASIDE THE JUDGEMENT AND ORDER
PASSED BY THE LEARNED SINGLE JUDGE IN WP
No.7470/2025 DATED 17/12/2025 AND CONSEQUENTLY
DISMISS THE SAID PETITION.
IN WA No. 555/2026
BETWEEN:
1. THE ADDITIONAL DIRECTOR,
DIRECTORATE GENERAL OF GOODS AND
SERVICE TAX INTELLIGENCE,
BANGALORE ZONAL UNIT,
No.112, S. P. ENCLAVE,
ADJACENT TO KARNATAKA BANK,
K. H. ROAD, BENGALURU-560027.
2. THE JOINT COMMISSIONER OF CENTRAL TAX,
BENGALURU SOUTH GST COMMISSIONERATE,
C. R. BUILDING, QUEENS ROAD,
BENGALURU-560001.
...APPELLANTS
(BY SRI ARAVIND V. CHAVAN, SENIOR STANDING
COUNSEL)
9
AND:
1. M/S S.R.S TRAVELS AND LOGISTICS PRIVATE
LIMITED
REGISTERED UNDER COMPANIES ACT OF 1956,
No.321, TSP ROAD,
OPPOSITE TO BANGALORE MEDICAL COLLEGE,
KALASIPALAYAM, BANGALORE- 560092,
REPRESENTED BY ITS
MANAGING DIRECTOR,
SMT. MEGHA BANGALORE,
RAJASHEKHARA
D/O LATE K.T.RAJASHEKHARA,
AGED ABOUT 47 YEARS,
OFFICE AT No.321, TSP ROAD,
OPPOSITE TO BANGALORE MEDICAL COLLEGE,
KALASIPALYAM, BENGALURU 560002.
2. THE DEPUTY COMMISSIONER OF
COMMERCIAL TAXES (AUDIT)-3.1,
DGSTO-3, II FLOOR,
BMTC BUILDING, SHANTI NAGAR
BENGALURU-560027.
3. THE COMMERCIAL TAX OFFICER,
OFFICE OF THE ADDITIONAL COMMISSIONER
OF COMMERCIAL TAXES (ENFORCEMENT),
SOUTH ZONE, ROOM No.204,
2ND FLOOR, VTK-2 BUILDING,
RAJENDRANAGAR, KORAMANGALA,
BENGALURU-560047.
...RESPONDENTS
(BY SRI P. B. HARISH, ADVOCATE FOR R1;
SRI ADITYA VIKRAM BHAT, AGA FOR R2 & R3)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF
THE KARNATAKA HIGH COURT ACT PRAYING TO SET
ASIDE THE ORDER PASSED BY THE LEARNED SINGLE
JUDGE IN WP No.27928/2024 (T-RES) DATED 19.12.2025.
10
THESE APPEALS HAVING BEEN HEARD AND RESERVED
FOR ORDER ON 10.03.2026 COMING ON THIS DAY,
S.G.PANDIT J., PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE S.G.PANDIT
and
HON'BLE MR. JUSTICE K. V. ARAVIND
CAV JUDGMENT
(PER: HON’BLE MR JUSTICE S.G.PANDIT)
Since facts involved in all the above appeals are
similar and as they raise common questions of law,
with the consent of learned counsel for the parties,
these appeals are heard together and disposed of by
this common judgment. It is noticed that though
common questions are involved, the financial years
involved are different which would not make any
difference.
2. The above intra-Court appeals are filed
under Section 4 of the Karnataka High Court Act, 1961
by the Revenue, respondent before the learned Single
11
Judge questioning order of the learned Single Judge
quashing common/consolidated show cause notices
issued under Section 73 and 74 of the Central Goods
and Services Tax Act, 2017 (for short, ‘the Act’)
covering more than one tax period or financial years.
The parties shall be referred to hereinafter as per the
rank they hold before this Court.
3. For convenience, the facts in
W.A.No.1751/2024 is taken up for discussion.
4. The facts in brief are that, the
appellants/Revenue issued a show cause notice under
Section 74 of the Act for the period from July 2017 to
March 2023 alleging defaults committed by the
respondents. In other words, the allegations related to
fraud, willful misstatement or suppression of facts. It
is also noticed that the material forming the
foundational basis for issuance of the show cause
12
notice was also enclosed, calling upon the respondents
to submit their reply.
5. Aggrieved by the show cause notice, the
respondents approached this Court under Article 226 of
the Constitution of India basically on the ground that,
under the Act, Sections 73 and 74 are financial year
specific and that show cause notice relating to period
beyond financial year or for multiple financial years is
impermissible. The learned Single Judge held that the
issuance of a common/consolidated show cause notice
for multiple financial years is impermissible and
quashed the show cause notices reserving liberty to
the appellants/Revenue to issue fresh show cause
notices, placing reliance on the order dated 07.08.2024
in M/S. BANGALORE GOLF CLUB VS. ASSISTANT
COMMISSIONER OF COMMERCIAL TAXES1 of this
Court and the decision of the Madras High Court in
1
W.P.No.16500/2024 DATED 07.08.2024
13
M/S. TITAN COMPANY LIMITED VS. JOINT
COMMISSIONER OF GST2.
6. The Revenue aggrieved by the said order of
the learned Single Judge, is in appeal.
7. Heard learned standing counsel Sri.Aravind
V. Chavan and learned counsel Sri.M.Unnikrishnan for
appellants/Revenue, learned Additional Advocate
General Shri Aditya Vikram Bhat for State, learned
senior counsel Sri.A.Shankar for learned counsel
Sri.Pranay Sharma.Y, learned senior counsel
Sri.K.K.Chythanya for learned counsel
Sri.E.I.Sanmathi, learned counsel Sri.M.N.Shankare
Gowda, learned counsel Sri.Bharat B. Raichandani for
caveator/respondent No.1 and learned counsel
Sri.Sandeep Huilgol for intervening applicants in
I.A.No.2/2026 to I.A.No.5/2026 in W.A.No.407/2026,
2
W.P.No.33164/2023
14
learned counsel Sri.Vinay.N., learned counsel
Sri.P.B.Harish for respondents/ assessees. Perused
the appeal papers.
8. Learned senior standing counsel
Sri.Aravind V. Chavan for appellants/Revenue
referring to Sections 73 and 74 of the Act submits that
it would not restrict initiation of proceedings to a
single financial year. Similarly, he submits that the
procedure prescribed for regular assessment under
Chapters IX and XII as well as proceedings under
Chapter XV with regard to demands and recovery is
also not restricted to a single financial year. Further,
learned counsel for Revenue would submit that
Sections 73 and 74 of the Act uses the word “any
period” and when the legislature has used consciously
the expression “any period”, it would be impermissible
to read it as restrictive one, restricting it to a single
financial year.
15
9. It is further submitted that, Sub-Section
(10) of Sections 73 and 74 of the Act protects the
interest of the assessee by prescribing limitation and
use of financial year in Sub-Section (10) cannot be
read as financial year specific to the proceedings
under Sections 73 and 74 of the Act. It is also
submitted that Sections 73 and 74 of the Act would
not prohibit initiation of multiple proceedings within a
financial year also. In the said circumstances, it is
submitted that the contention that show cause notice
issued under Sections 73 and 74 of the Act must be
confined to a financial year would be contrary to the
provision itself and it would amount to reading and
understanding the provision by adding what is not
there in the provision. However, it is pointed out that
show cause notice issued under Sections 73 and 74 of
the Act would be subject to limitation prescribed under
Sub-Section (10) of Sections 73 and 74 of the Act.
16
Learned counsel for the Revenue places reliance on
the judgment of the Delhi High Court in MATHUR
POLIMERS VS. UNION OF INDIA (2026) 154 GSTR
443 (decided on 26.08.2025) and AMBIKA TRADERS
VS. COMMISSIONER3 to contend that, it is permissible
to issue consolidated show cause notice covering
multiple financial years. It is also submitted that, the
SLPs filed against both the decisions are dismissed.
Learned counsel for the Revenue also placed reliance
on the decision of the High Court of Judicature at
Allahabad in M/S. SA AROMATICS PVT. LTD., AND
ANOTHER VS. UNION OF INDIA AND OTHERS4, which
also permitted issuance of combined show cause
notices for multiple financial years under Sections 73
and 74 of the Act.
3
(2025) 33 Centax 189 (Del)
4
Writ Tax.No.7515/2025 dated 20.01.2026
17
10. Learned Additional Government Advocate
Sri.Aditya Vikram Bhat supporting the learned counsel
for the Revenue submits that writ petition questioning
show cause notice is not maintainable as the show
cause notice would provide an opportunity to the
respondent/assesses to submit their reply and
thereafter efficacious statutory remedy is provided
under the Act.
11. Further, learned Additional Government
Advocate referring to Rule 56 of the Central Goods
and Services Tax Rules, 2017 (for short, ‘the Rules’)
would submit that accounts are to be maintained for
each works contract. It is also submitted that if
common show cause notice covering various financial
years is issued, at the time of adjudication,
adjudication could be for each financial year,
therefore, issuance of common show cause notice
18
involving several financial years cannot be found fault
with.
12. The Learned AGA relied upon the following
judgments:
(i) Singareni Collieries Company Limited vs.
Vemuganti Ramakrishan Rao and Others,
(2013) 8 SCC 789 : 2013 SCC OnLine SC 780
(ii) Union of India and Others vs. V.R.
Nanukuttan Nair, (2019) 19 SCC 690 : 2019
SCC OnLine SC 1435
(iii) Murlidhar Madanlal vs. Commissioner of
Income Tax, Bihar and Orissa, (1954) 26 ITR
231 : 1954 SCC OnLine Pat 41 : AIR 1954 Pat
511
(iv) State of Jammu and Kashmir vs. Caltex
(India) Ltd., 1965 SCC OnLine SC 168 : (1966)
17 STC 612
(v) Bennett and White (Calgary) Ltd. vs.
Municipal District of Sugar City No. 5, Privy
Council Appeal No. 42 of 1950 (decided on
23.07.1951)
19
(vi) Vallabh Textiles vs. Additional/Joint
Commissioner, CGST Delhi East
Commissionerate and Ors., W.P.(C)
13855/2024
(vii) Kasautii The Jewellers vs. Commissioner
of Income Tax & Ors., W.P.(T) No. 2344 of
2015
(viii) Deputy Commissioner (Intelligence) vs.
Minimol Sabu, W.A. No. 238/2025 (Kerala High
Court, Ernakulam)
13. On the contrary, learned counsel
Sri.Bharath appearing for respondent/assessee in
W.A.No.407/2026 submitted that the provisions of the
Act would not permit issuance of common show cause
notice for multiple financial years, as assessment is to
be made for the financial year with independent
returns, liabilities and that too within the period of
limitation prescribed. Further, he submits that annual
returns, along with year-wise re-conciliation of
20
turnover, input tax credit, tax liability, are required to
be furnished. It is also submitted that as per the
scheme of the Act registration, maintenance of
accounts, filing of returns, reconciliation, assessment,
determination and limitation is structured
independently for each financial year. By referring to
Sections 2(11), 44, 62, 34 of the Act and Rule 56 of
the Rules, he submits that scheme framed itself is
financial year specific and any default attracts
consequences under Sections 73 and 74 of the Act.
14. It is further submitted that when the
provisions governing filing of returns and assessment,
whether self-assessment or provisional assessment,
are structured with reference to the financial year, the
consequential proceedings under Sections 73/74 must
necessarily also be with reference to the financial
year. Learned counsel, by referring to Form GST DRC-
01 prescribed under Rules 100 and 142 of the Rules,
21
contends that the prescribed format of the show cause
notice itself refers to the “tax period” and the
“financial year.” It is submitted that the tax period
may be monthly or annual; however, it cannot extend
beyond a financial year. When DRC-01 show cause
notice format indicates and confines the period to a
financial year, issuance of show cause notice for
multiple financial years is impermissible. In that
regard, learned counsel also refers to Form-GST ADT-
01 under Rule 101 of the Rules and Form-GST DRC-07
issued under Rule 100 of the Rules.
15. In support of the aforesaid submissions,
learned counsel relied upon the following judgments:
(i) J.K. Steel Ltd vs. Union of India, 1978
(2) E.L.T. 355 (SC).
(ii) Dhandhania Kedia & Co vs. CIT, [1959]
35 ITR 400 (SC.
22
(iii) Shri Ishar Alloy Steels Ltd vs Jayaswals
Neco Limited, 2001 (3) SCC 609.
(iv) Milroc Good Earth Developers vs. Union of India [2025] 179 taxmann.com 465 (Bombay)/[2025] 112 GST 596
(Bombay)/[2026] 104 GSTL 45 (Bombay) [09-
10-2025].
(v) Joint Commissioner (Intelligence &
Enforcement) vs. Lakshmi Mobile Accessories
[2025] 171 taxmann.com 214 (Kerala)/[2025]
108 GST 750 (Kerala)/[2025] 95 GSTL 356
(Kerala) [05-02-2025].
(vi) Tharayil Medicals vs. Deputy
Commissioner, SGST Department, Thrissur
[2025] 173 taxmann.com 867 (Kerala) [08-04-
2025].
(vii) S.J.Constructions vs. Assistant
Commissioner [2025] 178 taxmann.com 570
(Andhra Pradesh)/[2025] 102 GSTL 348
(Andhra Pradesh) [17-09-2025].
(viii) R A and Co vs. Additional Commissioner
of Central Taxes [2025] 176 taxmann.com 731
(Madras)/[2025] 111 GST 104
23
(Madras)/[2025] 101 GSTL 21 (Madras) [21-
07-2025].
(ix) Titan Company Ltd. vs. Joint
Commissioner of GST & Central Excise [2024]
159 taxmann.com 162 (Madras) [18-12-2023].
(x) Rite Water Solutions vs. Joint
commissioner W.P.No.466 of 2025 (Bombay
High Court).
(xi) ICAD School of Learning vs. Union of
India, W.P.No.736/2026 (Bombay High Court).
(xii) M/s. Hakikatrai and Sons, Akola vs.
Union of India 2026 (3) TMI 248.
(xiii) Instakart Services Private Limited vs.
The Additional Commissioner (W.P. No.31551
of 2025).
(xiv) Kunhayammed vs. State of Kerala, 2001
(129) E.L.T. 11 (S.C.)”
(xv) UBER India Systems Pvt, Ltd., vs.
Deputy Commissioner of Central Tax &
another, W.P.No.19740 of 2024 (AP).
24
(xvi) Dhanlaxmi Bank Limited vs. State of
Kerala & Others, WP (C) No.15618 of 2025
(Kerala).
(xvii) M/s. Aparna Collection vs. UOI & others.,
W.P. (Civil No.890/2025 (SC).
(xviii) M/s. Aparna Collection vs. UOI & others.,
W.P. (C) No.17077/2025 & CM APPL.
70280/2025 (Delhi).
(xix) Berger Paints India Ltd. vs. CIT, 2004 (165)
E.L.T. 488 (S.C.).
16. Learned senior counsel Sri.K.K.Chythanya
for respondent/assessee in W.A.No.7/2025 submits
that issuance of a show cause notice is a jurisdictional
aspect which shall strictly comply statutory
requirements. It is his specific contention that under
the Scheme of the Act, every action either by the
Revenue or by the assessee is financial year specific.
However, he submits that although Sections 73 and
74 of the Act do not expressly prohibits issuance of a
25
combined notice, referring particularly to the
provisions relating to filing of returns and self-
assessment, the notice under Sections 73 and 74 of
the Act, by necessary implication would suggest each
financial year. In that regard, learned senior counsel
refers to Sections 2(11), 106, 39, 44, 59 and 168A of
the Act.
17. Learned senior counsel would submit that
Section 74 of the Act would deal with cases involving
fraud, misrepresentation or suppression of facts,
whereas Section 73 of the Act deals with other than
cases of fraud, misrepresentation or suppression of
facts. However, he submits that Sub-Section (10) of
Sections 73 and 74 of the Act prescribes different
limitation period. By issuing a common show cause
notice for different periods whether it involves fraud,
misrepresentation or suppression, the statutory
limitation applicable to cases falling under Section 73
26
of the Act would effectively stand extended by
application of Section 74 of the Act, which is
impermissible. Learned senior counsel also places
reliance on the circulars prescribing pecuniary limits
for adjudication by the proper officer. It is submitted
that depending on the pecuniary jurisdiction, show
cause notices are to be adjudicated. Issuance of
common or consolidated show cause notice may result
in adjudication of show cause notice by officer having
no pecuniary jurisdiction.
18. It is also contended that in view of the
deeming fiction under sub-section (10) of Section 75,
proceedings are deemed to be concluded if not
adjudicated within the time prescribed under sub-
section (10) of Sections 73 and 74. Such anomalies, it
is submitted, can be avoided if separate show cause
notices are issued for each financial year, which
would, in fact, be advantageous even from the
27
perspective of the Revenue. Learned counsel further
submits that where a consolidated show cause notice
is issued covering multiple years, and some of those
years attract Section 73, such cases may, by legal
fiction, be treated and determined under Section
73(1) of the Act, leading to further inconsistencies.
This anomaly, it is urged, can be obviated if the show
cause notices are confined to individual financial
years.
19. In support of the aforesaid submissions,
learned senior counsel relied upon the following
judgments:
(i) Deputy Commissioner of Income Tax vs.
Sunil Kumar Sharma, [2024] 469 ITR 197
(Karnataka).
(ii) Needle Industries (India) Ltd and Others
vs. Needle Industries Newey (India) Holding
Ltd. and Others, (1981) 3 SCC 333.
28
(iii) R.K. Upadhyaya vs. Shanabhai P. Patel,
[1987] 33 Taxman 229 (SC).
(iv) Deputy Commissioner of Income Tax vs.
Sunil Kumar Sharma, [2024] 168
taxmann.com 77 (SC).
(v) Everest Flavours Ltd. Vs. National
Faceless Assessment Centre, [2024] 166
taxmann.com 621 (Bombay).
(vi) C.C., C.E. and S.T. Bangalore
(Adjudication) and others vs. Northern
Operating Systems Private Limited, (2022) 17
SCC 90.
20. Learned senior counsel Sri.A.Shankar for
respondent/assessee in W.A.No.1751/2024 submits
that circular prescribes pecuniary jurisdiction to each
proper officer and issuance of consolidated show
cause notice would defeat such pecuniary jurisdiction.
It is submitted that when pecuniary jurisdiction is
prescribed to a proper officer, demand in a
consolidated show cause notice would result in shifting
29
of jurisdiction of proper officer. To maintain pecuniary
jurisdiction show cause notice under Sections 73 and
74 of the Act shall be restricted to each financial year.
Further, learned senior counsel would also submit that
when common show cause notice is issued
consolidating various financial years, show cause
notice for some financial years may not be
maintainable or barred by limitation.
21. In support of his submissions, the learned
Senior Counsel relied on the following Judgments:
(i) Milroc Good Earth Developers vs. Union
of India [2025] 179 taxmann.com 465
(Bombay)/[2025] 112 GST 596
(Bombay)/[2026] 104 GSTL 45 (Bombay) [09-
10-2025].
(ii) Paras Stone Industries vs. Union of India
[2026] 182 taxmann.com 643 (Bombay) [09-
01-2026].
(iii) Joint Commissioner (Intelligence &
Enforcement) vs. Lakshmi Mobile Accessories
30
[2025] 171 taxmann.com 214 (Kerala)/[2025]
108 GST 750 (Kerala)/[2025] 95 GSTL 356
(Kerala) [05-02-2025].
(iv) Tharayil Medicals vs. Deputy
Commissioner, SGST Department, Thrissur
[2025] 173 taxmann.com 867 (Kerala) [08-04-
2025].
(v) S.J.Constructions vs. Assistant
Commissioner [2025] 178 taxmann.com 570
(Andhra Pradesh)/[2025] 102 GSTL 348
(Andhra Pradesh) [17-09-2025].
(vi) Pramur Homes and Shelters vs. Union of
India [2025] 181 taxmann.com 541 (Karnataka)
[11-12-2025].
(vii) Gopi Chand vs. Deputy Commissioner of
Commercial Taxes (Audit) [2025]
171 taxmann.com 586 (Karnataka)/[2025] 109
GST 25 (Karnataka) [22-01-2025].
(viii) R A and Co vs. Additional Commissioner
of Central Taxes [2025] 176 taxmann.com 731
(Madras)/[2025] 111 GST 104 (Madras)/[2025]
101 GSTL 21 (Madras) [21-07-2025].
31
(ix) Titan Company Ltd. vs. Joint
Commissioner of GST & Central Excise [2024]
159 taxmann.com 162 (Madras) [18-12-2023].
(x) Ekta Enterprises vs. State of Himachal
Pradesh (2026) 38 Centax 303 (H.P).
(xi) Dream Infotech vs. State Tax Officer
(Ins), Tirunelveli (2026) 183 taxmann.com 272
(madras)[02-02-2026].
(xii) Smt. R Ashaarajaa vs. Senior
Intelligence Officer, Directorate General of GST
Intelligence [2025] 176 taxmann.com 689
(Madras).
(xiii) Speedways Logistics (P.) Ltd. vs. Union
of India (2026) 183 taxmann.com 232
(Bombay) [06-02-2026].
22. Learned counsel Sri.Sandeep Huilgol for
some of the intervening applicants in
W.A.No.407/2026, in addition to the submissions
made on behalf of respondents/assessees submits
that, overall scheme of the Act would suggest
32
issuance of show cause notice under Sections 73 and
74 of the Act for a financial year. Learned counsel
referring to the minutes of 53rd meeting of the GST
Council dated 22.06.2024 to introduce Section 74A of
the Act, submits that proceedings are intended to be
for financial year. Further, referring to Section 36 of
the Act, he submits that retention of books of
accounts are with reference to financial year, as such,
all proceedings under the Act shall have to be
construed to be financial year specific. Learned
counsel places reliance on the judgment of the Hon’ble
Apex Court in NIZAM SUGAR FACTORY VS.
COLLECTOR OF CENTRAL EXCISE, A.P5.
23. Learned counsel Sri.E.I.Sanmathi for
respondent/assesses in W.A.No.1590/2025 submits
that the reason for issuance of a show cause notice
shall have nexus with the conditions stipulated under
5
2006 TAXMANN.COM 2313 (SC)
33
Sections 73 and 74 of the Act. If common or
consolidated show cause notices are issued, it may
not satisfy the necessary ingredients of fraud,
misrepresentation or suppression of facts. Learned
counsel places reliance on the judgment of the Hon’ble
Apex Court in COMMISSIONER OF INCOME TAX VS.
KURBAN HUSSAIN IBRAHIMJI MITHIBORWALA6.
24. On hearing the learned counsel appearing
for the parties and on perusal of the entire appeal
papers, the following point would arise for our
consideration:
Whether it would be permissible to
issue consolidated/common show cause
notice under Sections 73 and 74 of the Act
covering multiple financial years or multiple
tax periods?
6
(1971) 82 ITR 821 (SC)
34
25. Answer to the above point would be in the
affirmative for the reasons stated hereunder.
STATUTORY FRAMEWORK
Before proceeding to answer the contentions, it
is necessary to analyse the scheme of the Central
Goods and Services Tax Act, 2017, particularly in view
of the submissions advanced by the majority of the
learned counsel that Sections 73 and 74 must be
interpreted in the backdrop of the overall statutory
framework. The relevant provisions of the Act are
extracted herein below for ready reference and
convenience:
“2. Definitions.–In this Act, unless the
context otherwise requires,–
*****
(106) “tax period” means the period for
which the return is required to be furnished;”
“37. Furnishing details of outward
supplies.–(1) Every registered person, other
than an Input Service Distributor, a non-
resident taxable person and a person paying
tax under the provisions of Section 10 or
Section 51 or Section 52, shall furnish,
electronically, [subject to such conditions and
35restrictions and] in such form and manner as
may be prescribed, the details of outward
supplies of goods or services or both effected
during a tax period on or before the tenth day
of the month succeeding the said tax period
and such details [shall, subject to such
conditions and restrictions, within such time
and in such manner as may be prescribed, be
communicated to the recipient of the said
supplies]:
[* * *]
[Provided that] the Commissioner
may, for reasons to be recorded in
writing, by notification, extend the
time limit for furnishing such details
for such class of taxable persons as
may be specified therein:
[Provided further that] any
extension of time limit notified by
the Commissioner of State tax or
Commissioner of Union territory
tax shall be deemed to be notified
by the Commissioner.
(2) [* * *]
(3) Any registered person, who has
furnished the details under sub-
section (1) for any tax period [* * *],
shall, upon discovery of any error or
omission therein, rectify such error or
omission in such manner as may be
prescribed, and shall pay the tax and
interest, if any, in case there is a
short payment of tax on account of
such error or omission, in the return
to be furnished for such tax period:
Provided that no rectification of
error or omission in respect of the
details furnished under sub-section
(1) shall be allowed after [the
36thirtieth day of November]
following the end of the financial
year to which such details pertain,
or furnishing of the relevant annual
return, whichever is earlier.
[Provided further that the
rectification of error or omission in
respect of the details furnished
under sub-section (1) shall be
allowed after furnishing of the
return under Section 39 for the
month of September, 2018 till the
due date for furnishing the details
under sub-section (1) for the
month of March, 2019 or for the
quarter January, 2019 to March,
2019.]
[(4) A registered person shall not
be allowed to furnish the details of
outward supplies under sub-section
(1) for a tax period, if the details of
outward supplies for any of the
previous tax periods has not been
furnished by him:
Provided that the Government
may, on the recommendations of the
Council, by notification, subject to
such conditions and restrictions as
may be specified therein, allow a
registered person or a class of
registered persons to furnish the
details of outward supplies under sub-
section (1), even if he has not
furnished the details of outward
supplies for one or more previous tax
periods.]
[(5) A registered person shall not
be allowed to furnish the details of
outward supplies under sub-section
37(1) for a tax period after the expiry of
a period of three years from the due
date of furnishing the said details:
Provided that the Government
may, on the recommendations of the
Council, by notification, subject to
such conditions and restrictions as
may be specified therein, allow a
registered person or a class of
registered persons to furnish the
details of outward supplies for a tax
period under sub-section (1), even
after the expiry of the said period of
three years from the due date of
furnishing the said details.]
Explanation.–For the purposes of
this Chapter, the expression “details
of outward supplies” shall include
details of invoices, debit notes, credit
notes and revised invoices issued in
relation to outward supplies made
during any tax period.
” 38. Communication of details of
inward supplies and input tax credit.–(1)
The details of outward supplies furnished by
the registered persons under sub-section (1) of
Section 37 and of such other supplies as may
be prescribed, [a statement] containing the
details of input tax credit shall be made
available electronically to the recipients of such
supplies in such form and manner, within such
time, and subject to such conditions and
restrictions as may be prescribed.
(2) The [statement referred in] sub-section
(1) shall consist of–
(a) details of inward supplies in respect
of which credit of input tax may be
available to the recipient; [* * *]
38
(b) details of supplies in respect of which
such credit cannot be availed,
whether wholly or partly, by the
recipient, [including] on account of
the details of the said supplies being
furnished under sub-section (1) of
Section 37,–
(i) by any registered person within
such period of taking registration
as may be prescribed; or
(ii) by any registered person, who has
defaulted in payment of tax and
where such default has continued
for such period as may be
prescribed; or
(iii) by any registered person, the
output tax payable by whom in
accordance with the statement of
outward supplies furnished by him
under the said sub-section during
such period, as may be prescribed,
exceeds the output tax paid by him
during the said period by such limit
as may be prescribed; or
(iv) by any registered person who,
during such period as may be
prescribed, has availed credit of
input tax of an amount that
exceeds the credit that can be
availed by him in accordance with
clause (a), by such limit as may be
prescribed; or
(v) by any registered person, who has
defaulted in discharging his tax
liability in accordance with the
provisions of sub-section (12) of
Section 49 subject to such
conditions and restrictions as may
be prescribed; or
39
(vi) by such other class of persons as
may be prescribed.]
[(c) such other details as may be
prescribed.]”
“39. Furnishing of returns.– [(1) Every
registered person, other than an Input Service
Distributor or a non-resident taxable person or
a person paying tax under the provisions of
Section 10 or Section 51 or Section 52 shall,
for every calendar month or part thereof,
furnish, a return, electronically, of inward and
outward supplies of goods or services or both,
input tax credit availed, tax payable, tax paid
and such other particulars, in such form and
manner, [within such time, and subject to
such conditions and restrictions], as may be
prescribed:
Provided that the Government may, on
the recommendations of the Council, notify
certain class of registered persons who shall
furnish a return for every quarter or part
thereof, subject to such conditions and
restrictions as may be specified therein.
(2) A registered person paying tax
under the provisions of Section 10,
shall, for each financial year or part
thereof, furnish a return,
electronically, of turnover in the State
or Union territory, inward supplies of
goods or services or both, tax
payable, tax paid and such other
particulars in such form and manner,
and within such time, as may be
prescribed.]
[(3) Every registered person
required to deduct tax at source under
Section 51 shall electronically furnish
a return for every calendar month of
40the deductions made during the
month in such form and manner and
within such time as may be
prescribed:
Provided that the said registered
person shall furnish a return for every
calendar month whether or not any
deductions have been made during
the said month.]
(4) Every taxable person registered
as an Input Service Distributor shall,
for every calendar month or part
thereof, furnish, in such form and
manner as may be prescribed, a
return, electronically, within thirteen
days after the end of such month.
(5) Every registered non-resident
taxable person shall, for every
calendar month or part thereof,
furnish, in such form and manner as
may be prescribed, a return,
electronically, within [thirteen] days
after the end of a calendar month or
within seven days after the last day of
the period of registration specified
under sub-section (1) of Section 27,
whichever is earlier.
(6) The Commissioner may, for
reasons to be recorded in writing, by
notification, extend the time limit for
furnishing the returns under this
section for such class of registered
persons as may be specified therein:
Provided that any extension of
time limit notified by the
Commissioner of State tax or Union
territory tax shall be deemed to be
notified by the Commissioner.
41
[(7) Every registered person who
is required to furnish a return under
sub-section (1), other than the person
referred to in the proviso thereto, or
sub-section (3) or sub-section (5),
shall pay to the Government the tax
due as per such return not later than
the last date on which he is required
to furnish such return:
[Provided that every registered
person furnishing return under the
proviso to sub-section (1) shall pay to
the Government, in such form and
manner, and within such time, as may
be prescribed,–
(a) an amount equal to the tax
due taking into account
inward and outward supplies
of goods or services or both,
input tax credit availed, tax
payable and such other
particulars during a month;
or
(b) in lieu of the amount
referred to in clause (a), an
amount determined in such
manner and subject to such
conditions and restrictions as
may be prescribed : ]
Provided further that every
registered person furnishing return
under sub-section (2) shall pay to
the Government, the tax due
taking into account turnover in the
State or Union territory, inward
supplies of goods or services or
both, tax payable, and such other
particulars during a quarter, in
42such form and manner, and within
such time, as may be prescribed.]
(8) Every registered person who is
required to furnish a return under
sub-section (1) or sub-section (2)
shall furnish a return for every tax
period whether or not any supplies of
goods or services or both have been
made during such tax period.
(9) [Where] any registered person
after furnishing a return under sub-
section (1) or sub-section (2) or sub-
section (3) or sub-section (4) or sub-
section (5) discovers any omission or
incorrect particulars therein, other
than as a result of scrutiny, audit,
inspection or enforcement activity by
the tax authorities, he shall rectify
such omission or incorrect particulars
[in such form and manner as may be
prescribed], subject to payment of
interest under this Act:
Provided that no such
rectification of any omission or
incorrect particulars shall be
allowed after [the thirtieth day of
November] following [the end of
the financial year to which such
details pertain], or the actual date
of furnishing of relevant annual
return, whichever is earlier.
(10) A registered person shall not
be allowed to furnish a return for a
tax period if the return for any of the
previous tax periods [or the details of
outward supplies under sub-section
(1) of Section 37 for the said tax
period has not been furnished by him:
43
Provided that the Government
may, on the recommendations of the
Council, by notification, subject to
such conditions and restrictions as
may be specified therein, allow a
registered person or a class of
registered persons to furnish the
return, even if he has not furnished
the returns for one or more previous
tax periods or has not furnished the
details of outward supplies under sub-
section (1) of Section 37 for the said
tax period.]
[(11) A registered person shall not
be allowed to furnish a return for a
tax period after the expiry of a period
of three years from the due date of
furnishing the said return:
Provided that the Government
may, on the recommendations of the
Council, by notification, subject to
such conditions and restrictions as
may be specified therein, allow a
registered person or a class of
registered persons to furnish the
return for a tax period, even after the
expiry of the said period of three
years from the due date of furnishing
the said return.]“41. Availment of input tax credit.–(1)
Every registered person shall, subject to such
conditions and restrictions as may be
prescribed, be entitled to avail the credit of
eligible input tax, as self-assessed, in his
return and such amount shall be credited to his
electronic credit ledger.
(2) The credit of input tax availed by a
registered person under sub-section (1) in
44
respect of such supplies of goods or services or
both, the tax payable whereon has not been
paid by the supplier, shall be reversed along
with applicable interest, by the said person in
such manner as may be prescribed:
Provided that where the said supplier makes
payment of the tax payable in respect of the
aforesaid supplies, the said registered person
may re-avail the amount of credit reversed by
him in such manner as may be prescribed.]”
”
44. Annual return.– [(1)] Every registered
person, other than an Input Service
Distributor, a person paying tax under Section
51 or Section 52, a casual taxable person and
a non-resident taxable person shall furnish an
annual return which may include a self-
certified reconciliation statement, reconciling
the value of supplies declared in the return
furnished for the financial year, with the
audited annual financial statement for every
financial year electronically, within such time
and in such form and in such manner as may
be prescribed:
Provided that the Commissioner may, on
the recommendations of the Council, by
notification, exempt any class of registered
persons from filing annual return under this
section:
Provided further that nothing contained in
this section shall apply to any department of
the Central Government or a State
Government or a local authority, whose books
of account are subject to audit by the
Comptroller and Auditor-General of India or an
auditor appointed for auditing the accounts of
local authorities under any law for the time
being in force.]
45[(2) A registered person shall not be
allowed to furnish an annual return under sub-
section (1) for a financial year after the expiry
of a period of three years from the due date of
furnishing the said annual return:
Provided that the Government may, on the
recommendations of the Council, by
notification, and subject to such conditions and
restrictions as may be specified therein, allow
a registered person or a class of registered
persons to furnish an annual return for a
financial year under sub-section (1), even after
the expiry of the said period of three years
from the due date of furnishing the said annual
return.”
“45. Final return.–Every registered person
who is required to furnish a return under sub-
section (1) of Section 39 and whose
registration has been cancelled shall furnish a
final return within three months of the date of
cancellation or date of order of cancellation,
whichever is later, in such form and manner as
may be prescribed.”
“49. Payment of tax, interest, penalty and
other amounts.–(1) Every deposit made
towards tax, interest, penalty, fee or any other
amount by a person by internet banking or by
using credit or debit cards or National
Electronic Fund Transfer or Real Time Gross
Settlement or by such other mode and subject
to such conditions and restrictions as may be
prescribed, shall be credited to the electronic
cash ledger of such person to be maintained in
such manner as may be prescribed.
(2) The input tax credit as self-
assessed in the return of a registered
person shall be credited to his
46
electronic credit ledger, in accordance
with [Section 41 [* * *]], to be
maintained in such manner as may be
prescribed.
(3) The amount available in the
electronic cash ledger may be used
for making any payment towards tax,
interest, penalty, fees or any other
amount payable under the provisions
of this Act or the rules made
thereunder in such manner and
subject to such conditions and within
such time as may be prescribed.
(4) The amount available in the
electronic credit ledger may be used
for making any payment towards
output tax under this Act or under the
Integrated Goods and Services Tax
Act in such manner and subject to
such conditions [and restrictions] and
within such time as may be
prescribed.
(5) The amount of input tax credit
available in the electronic credit
ledger of the registered person on
account of–
(a) integrated tax shall first be
utilised towards payment of
integrated tax and the
amount remaining, if any,
may be utilised towards the
payment of central tax and
State tax, or as the case may
be, Union territory tax, in
that order;
(b) the central tax shall first be
utilised towards payment of
central tax and the amount
remaining, if any, may be
47
utilised towards the payment
of integrated tax;
(c) the State tax shall first be
utilised towards payment of
State tax and the amount
remaining, if any, may be
utilised towards payment of
integrated tax:
[Provided that the input
tax credit on account of State
tax shall be utilised towards
payment of integrated tax
only where the balance of the
input tax credit on account of
central tax is not available
for payment of integrated
tax;]
(d) the Union territory tax shall
first be utilised towards
payment of Union territory
tax and the amount
remaining, if any, may be
utilised towards payment of
integrated tax:
[Provided that the input
tax credit on account of
Union territory tax shall be
utilised towards payment of
integrated tax only where the
balance of the input tax
credit on account of central
tax is not available for
payment of integrated tax;]
(e) the central tax shall not be
utilised towards payment of
State tax or Union territory
tax; and
(f) the State tax or Union
territory tax shall not be
48utilised towards payment of
central tax.
(6) The balance in the electronic
cash ledger or electronic credit ledger
after payment of tax, interest,
penalty, fee or any other amount
payable under this Act or the rules
made thereunder may be refunded in
accordance with the provisions of
Section 54.
(7) All liabilities of a taxable person
under this Act shall be recorded and
maintained in an electronic liability
register in such manner as may be
prescribed.
(8) Every taxable person shall
discharge his tax and other dues
under this Act or the rules made
thereunder in the following order,
namely:–
(a) self-assessed tax, and other
dues related to returns of
previous tax periods;
(b) self-assessed tax, and other
dues related to the return of
the current tax period;
(c) any other amount payable
under this Act or the rules
made thereunder including
the demand determined
under Section 73 or Section
74 [or Section 74-A].
(9) Every person who has paid the
tax on goods or services or both
under this Act shall, unless the
contrary is proved by him, be deemed
to have passed on the full incidence of
such tax to the recipient of such
goods or services or both.
49
Explanation.–For the purposes of
this section,–
(a) the date of credit to the
account of the Government
in the authorised bank shall
be deemed to be the date of
deposit in the electronic cash
ledger;
(b) the expression,–
(i) “tax dues” means the tax
payable under this Act and
does not include interest, fee
and penalty; and
(ii) “other dues” means interest,
penalty, fee or any other
amount payable under this
Act or the rules made
thereunder.
[(10) A registered person may, on
the common portal, transfer any
amount of tax, interest, penalty, fee
or any other amount available in the
electronic cash ledger under this Act,
to the electronic cash ledger for,–
(a) integrated tax, central tax,
State tax, Union territory tax
or cess; or
(b) integrated tax or central tax
of a distinct person as
specified in sub-section (4)
or, as the case may be, sub-
section (5) of Section 25,
in such form and manner and subject
to such conditions and restrictions as
may be prescribed and such transfer
shall be deemed to be a refund from
the electronic cash ledger under this
Act:
50
Provided that no such transfer
under clause (b) shall be allowed if
the said registered person has any
unpaid liability in his electronic liability
register.]
[(11) Where any amount has been
transferred to the electronic cash
ledger under this Act, the same shall
be deemed to be deposited in the said
ledger as provided in sub-section (1).]
[(12) Notwithstanding anything
contained in this Act, the Government
may, on the recommendations of the
Council, subject to such conditions
and restrictions, specify such
maximum proportion of output tax
liability under this Act or under the
Integrated Goods and Services Tax
Act, 2017 (13 of 2017) which may be
discharged through the electronic
credit ledger by a registered person or
a class of registered persons, as may
be prescribed.”
“51. Tax deduction at source.–(1)
Notwithstanding anything to the contrary
contained in this Act, the Government may
mandate,–
(a) a department or establishment of the
Central Government or State
Government; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons
as may be notified by the Government
on the recommendations of the
Council,
(hereafter in this section referred
to as “the deductor”), to deduct tax at
51the rate of one per cent. from the
payment made or credited to the
supplier (hereafter in this section
referred to as “the deductee”) of
taxable goods or services or both,
where the total value of such supply,
under a contract, exceeds two lakh
and fifty thousand rupees:
Provided that no deduction shall
be made if the location of the
supplier and the place of supply is
in a State or Union territory which
is different from the State or as the
case may be, Union territory of
registration of the recipient.
Explanation.–For the purpose of
deduction of tax specified above, the
value of supply shall be taken as the
amount excluding the central tax,
State tax, Union territory tax,
integrated tax and cess indicated in
the invoice.
(2) The amount deducted as tax
under this section shall be paid to the
Government by the deductor within
ten days after the end of the month in
which such deduction is made, in such
manner as may be prescribed.
[(3) A certificate of tax deduction
at source shall be issued in such form
and in such manner as may be
prescribed.]
(4) [* * *]
(5) The deductee shall claim credit,
in his electronic cash ledger, of the
tax deducted and reflected in the
return of the deductor furnished under
sub-section (3) of Section 39, in such
manner as may be prescribed.
52
(6) If any deductor fails to pay to
the Government the amount deducted
as tax under sub-section (1), he shall
pay interest in accordance with the
provisions of sub-section (1) of
Section 50, in addition to the amount
of tax deducted.
(7) The determination of the
amount in default under this section
shall be made in the manner specified
in Section 73 or Section 74 [or
Section 74-A].
(8) The refund to the deductor or
the deductee arising on account of
excess or erroneous deduction shall
be dealt with in accordance with the
provisions of Section 54:
Provided that no refund to the
deductor shall be granted, if the
amount deducted has been credited to
the electronic cash ledger of the
deductee.”
“52. Collection of tax at source.–(1)
Notwithstanding anything to the contrary
contained in this Act, every electronic
commerce operator (hereafter in this section
referred to as the “operator”), not being an
agent, shall collect an amount calculated at
such rate not exceeding one per cent., as may
be notified by the Government on the
recommendations of the Council, of the net
value of taxable supplies made through it by
other suppliers where the consideration with
respect to such supplies is to be collected by
the operator.
Explanation.–For the purposes of
this sub-section, the expression “net
value of taxable supplies” shall mean
53
the aggregate value of taxable
supplies of goods or services or both,
other than services notified under
sub-section (5) of Section 9, made
during any month by all registered
persons through the operator reduced
by the aggregate value of taxable
supplies returned to the suppliers
during the said month.
(2) The power to collect the amount
specified in sub-section (1) shall be without
prejudice to any other mode of recovery from
the operator.
(3) The amount collected under sub-section
(1) shall be paid to the Government by the
operator within ten days after the end of the
month in which such collection is made, in
such manner as may be prescribed.
(4) Every operator who collects the amount
specified in sub-section (1) shall furnish a
statement, electronically, containing the details
of outward supplies of goods or services or
both effected through it, including the supplies
of goods or services or both returned through
it, and the amount collected under sub-section
(1) during a month, in such form and manner
as may be prescribed, within ten days after the
end of such month.
[Explanation:–For the purposes of
this sub-section, it is hereby declared
that the due date for furnishing the said
statement for the months of October,
November and December, 2018 shall
be the [7th February, 2019] : ]
[Provided that the Commissioner may,
for reasons to be recorded in writing, by
notification, extend the time limit for
furnishing the statement for such class of
54
registered persons as may be specified
therein:
Provided further that any extension of
time limit notified by the Commissioner of
State tax or the Commissioner of Union
territory tax shall be deemed to be notified
by the Commissioner.]
(5) Every operator who collects the amount
specified in sub-section (1) shall furnish an
annual statement, electronically, containing
the details of outward supplies of goods or
services or both effected through it, including
the supplies of goods or services or both
returned through it, and the amount collected
under the said sub-section during the financial
year, in such form and manner as may be
prescribed, before the thirty first day of
December following the end of such financial
year:
[Provided that the Commissioner may,
on the recommendations of the Council and
for reasons to be recorded in writing, by
notification, extend the time limit for
furnishing the annual statement for such
class of registered persons as may be
specified therein:
Provided further that any extension of
time limit notified by the Commissioner of
State tax or the Commissioner of Union
territory tax shall be deemed to be notified
by the Commissioner.]
(6) If any operator after furnishing a
statement under sub-section (4) discovers any
omission or incorrect particulars therein, other
than as a result of scrutiny, audit, inspection or
enforcement activity by the tax authorities, he
shall rectify such omission or incorrect
particulars in the statement to be furnished for
the month during which such omission or
55incorrect particulars are noticed, subject to
payment of interest, as specified in sub-section
(1) of Section 50:
Provided that no such rectification of any
omission or incorrect particulars shall be
allowed after the [thirtieth day of
November] following the end of the financial
year or the actual date of furnishing of the
relevant annual statement, whichever is
earlier.
(7) The supplier who has supplied the goods
or services or both through the operator shall
claim credit, in his electronic cash ledger, of
the amount collected and reflected in the
statement of the operator furnished under sub-
section (4), in such manner as may be
prescribed.
(8) The details of supplies furnished by
every operator under sub-section (4) shall be
matched with the corresponding details of
outward supplies furnished by the concerned
supplier registered under this Act in such
manner and within such time as may be
prescribed.
(9) Where the details of outward supplies
furnished by the operator under sub-section
(4) do not match with the corresponding
details furnished by the supplier under [Section
37 or Section 39], the discrepancy shall be
communicated to both persons in such manner
and within such time as may be prescribed.
(10) The amount in respect of which any
discrepancy is communicated under sub-
section (9) and which is not rectified by the
supplier in his valid return or the operator in
his statement for the month in which
discrepancy is communicated, shall be added
to the output tax liability of the said supplier,
where the value of outward supplies furnished
56
by the operator is more than the value of
outward supplies furnished by the supplier, in
his return for the month succeeding the month
in which the discrepancy is communicated in
such manner as may be prescribed.
(11) The concerned supplier, in whose
output tax liability any amount has been added
under sub-section (10), shall pay the tax
payable in respect of such supply along with
interest, at the rate specified under sub-
section (1) of Section 50 on the amount so
added from the date such tax was due till the
date of its payment.
(12) Any authority not below the rank of
Deputy Commissioner may serve a notice,
either before or during the course of any
proceedings under this Act, requiring the
operator to furnish such details relating to–
(a) supplies of goods or services or both
effected through such operator during
any period; or
(b) stock of goods held by the suppliers
making supplies through such
operator in the godowns or
warehouses, by whatever name
called, managed by such operator and
declared as additional places of
business by such suppliers,
as may be specified in the notice.
(13) Every operator on whom a notice has
been served under sub-section (12) shall
furnish the required information within fifteen
working days of the date of service of such
notice.
(14) Any person who fails to furnish the
information required by the notice served
under sub-section (12) shall, without prejudice
to any action that may be taken under Section
57
122, be liable to a penalty which may extend
to twenty-five thousand rupees.
[(15) The operator shall not be allowed to
furnish a statement under sub-section (4) after
the expiry of a period of three years from the
due date of furnishing the said statement:
Provided that the Government may, on the
recommendations of the Council, by
notification, subject to such conditions and
restrictions as may be specified therein, allow
an operator or a class of operators to furnish a
statement under sub-section (4), even after
the expiry of the said period of three years
from the due date of furnishing the said
statement.]
Explanation.–For the purposes of this
section, the expression “concerned
supplier” shall mean the supplier of
goods or services or both making
supplies through the operator.”
“54. Refund of tax.–(1) Any person claiming
refund of any tax and interest, if any, paid on
such tax or any other amount paid by him,
may make an application before the expiry of
two years from the relevant date in such form
and manner as may be prescribed:
Provided that a registered person,
claiming refund of any balance in the
electronic cash ledger in accordance with
the provisions of sub-section (6) of Section
49, may claim such refund in [such form
and] manner as may be prescribed
.
(2) A specialised agency of the
United Nations Organisation or any
Multilateral Financial Institution and
Organisation notified under the United
Nations (Privileges and Immunities)
58Act, 1947 (46 of 1947), Consulate or
Embassy of foreign countries or any
other person or class of persons, as
notified under Section 55, entitled to
a refund of tax paid by it on inward
supplies of goods or services or both,
may make an application for such
refund, in such form and manner as
may be prescribed, before the expiry
of [two years] from the last day of
the quarter in which such supply was
received.
(3) Subject to the provisions of
sub-section (10), a registered person
may claim refund of any unutilised
input tax credit at the end of any tax
period:
Provided that no refund of
unutilised input tax credit shall be
allowed in cases other than–
(i) zero rated supplies made
without payment of tax;
(ii) where the credit has
accumulated on account of
rate of tax on inputs being
higher than the rate of tax on
output supplies (other than
nil rated or fully exempt
supplies), except supplies of
goods or services or both as
may be notified by the
Government on the
recommendations of the
Council:
[* * *]
Provided also that no refund of
input tax credit shall be allowed, if the
supplier of goods or services or both
avails of drawback in respect of
59central tax or claims refund of the
integrated tax paid on such supplies.
(4) The application shall be
accompanied by–
(a) such documentary evidence
as may be prescribed to
establish that a refund is due
to the applicant; and
(b) such documentary or other
evidence (including the
documents referred to in
Section 33) as the applicant
may furnish to establish that
the amount of tax and
interest, if any, paid on such
tax or any other amount paid
in relation to which such
refund is claimed was
collected from, or paid by,
him and the incidence of
such tax and interest had not
been passed on to any other
person:
Provided that where the
amount claimed as refund is
less than two lakh rupees, it
shall not be necessary for the
applicant to furnish any
documentary and other
evidences but he may file a
declaration, based on the
documentary or other
evidences available with him,
certifying that the incidence
of such tax and interest had
not been passed on to any
other person.
(5) If, on receipt of any such
application, the proper officer is
60satisfied that the whole or part of the
amount claimed as refund is
refundable, he may make an order
accordingly and the amount so
determined shall be credited to the
Fund referred to in Section 57.
(6) Notwithstanding anything
contained in sub-section (5), the
proper officer may, in the case of any
claim for refund on account of zero-
rated supply of goods or services or
both [or of unutilised input tax credit
allowed under clause (ii) of the first
proviso to sub-section (3)] made by
registered persons, other than such
category of registered persons as may
be notified by the Government on the
recommendations of the Council,
refund on a provisional basis, ninety
per cent. of the total amount so
claimed, [* * *] in such manner and
subject to such conditions, limitations
and safeguards as may be prescribed
and thereafter make an order under
sub-section (5) for final settlement of
the refund claim after due verification
of documents furnished by the
applicant.
(7) The proper officer shall issue
the order under sub-section (5) within
sixty days from the date of receipt of
application complete in all respects.
(8) Notwithstanding anything
contained in sub-section (5), the
refundable amount shall, instead of
being credited to the Fund, be paid to
the applicant, if such amount is
relatable to–
61
(a) refund of tax paid
on [“export” and “exports”]
of goods or services or both
or on inputs or input services
used in making such zero-
rated supplies;
(b) refund of unutilised input
tax credit under sub-section
(3);
(c) refund of tax paid on a
supply which is not provided,
either wholly or partially, and
for which invoice has not
been issued, or where a
refund voucher has been
issued;
(d) refund of tax in pursuance
of Section 77;
(e) the tax and interest, if any,
or any other amount paid by
the applicant, if he had not
passed on the incidence of
such tax and interest to any
other person; or
(f) the tax or interest borne by
such other class of applicants
as the Government may, on
the recommendations of the
Council, by notification,
specify.
[(8-A) The Government may
disburse the refund of the State tax in
such manner as may be prescribed.]
(9) Notwithstanding anything to
the contrary contained in any
judgment, decree, order or direction
of the Appellate Tribunal or any court
or in any other provisions of this Act
or the rules made thereunder or in
62
any other law for the time being in
force, no refund shall be made except
in accordance with the provisions of
sub-section (8).
(10) Where any refund is due [* *
*] to a registered person who has
defaulted in furnishing any return or
who is required to pay any tax,
interest or penalty, which has not
been stayed by any court, Tribunal or
Appellate Authority by the specified
date, the proper officer may–
(a) withhold payment of refund
due until the said person has
furnished the return or paid
the tax, interest or penalty,
as the case may be;
(b) deduct from the refund due,
any tax, interest, penalty, fee
or any other amount which
the taxable person is liable to
pay but which remains
unpaid under this Act or
under the existing law.
Explanation.–For the purposes of
this sub-section, the expression
“specified date” shall mean the last
date for filing an appeal under this
Act.
(11) Where an order giving rise to a
refund is the subject matter of an appeal
or further proceedings or where any
other proceedings under this Act is
pending and the Commissioner is of the
opinion that grant of such refund is likely
to adversely affect the revenue in the
said appeal or other proceedings on
account of malfeasance or fraud
63
committed, he may, after giving the
taxable person an opportunity of being
heard, withhold the refund till such time
as he may determine.
(12) Where a refund is withheld under
sub-section (11), the taxable person
shall, notwithstanding anything
contained in Section 56, be entitled to
interest at such rate not exceeding six
per cent. as may be notified on the
recommendations of the Council, if as a
result of the appeal or further
proceedings he becomes entitled to
refund.
(13) Notwithstanding anything to the
contrary contained in this section, the
amount of advance tax deposited by a
casual taxable person or a non-resident
taxable person under sub-section (2) of
Section 27, shall not be refunded unless
such person has, in respect of the entire
period for which the certificate of
registration granted to him had remained
in force, furnished all the returns
required under Section 39.
(14) Notwithstanding anything
contained in this section, no refund
under sub-section (5) or sub-section
(6) [, other than cases where refund of
tax is claimed on account of goods
exported out of India with payment of
tax,] shall be paid to an applicant, if the
amount is less than one thousand
rupees.
[(15) Notwithstanding anything
contained in this section, no refund of
unutilised input tax credit on account of
zero rated supply of goods or of
integrated tax paid on account of zero
64
rated supply of goods shall be allowed
where such zero rated supply of goods is
subjected to export duty.]
Explanation.–For the purposes of this
section,–
(1) “refund” includes refund of tax
paid on zero-rated supplies of goods or
services or both or on inputs or input
services used in making such zero-rated
supplies, or refund of tax on the supply
of goods regarded as deemed exports, or
refund of unutilised input tax credit as
provided under sub-section (3).
(2) “relevant date” means–
(a) in the case of goods exported
out of India where a refund of
tax paid is available in respect
of goods themselves or, as the
case may be, the inputs or input
services used in such goods,–
(i) if the goods are exported by
sea or air, the date on which
the ship or the aircraft in
which such goods are loaded,
leaves India; or
(ii) if the goods are exported by
land, the date on which such
goods pass the frontier; or
(iii) if the goods are exported by
post, the date of despatch of
goods by the Post Office
concerned to a place outside
India;
(b) in the case of supply of goods
regarded as deemed exports
where a refund of tax paid is
available in respect of the
goods, the date on which the
65
return relating to such deemed
exports is furnished;
[(ba) in case of zero-rated supply
of goods or services or both to a
Special Economic Zone
developer or a Special Economic
Zone unit where a refund of tax
paid is available in respect of
such supplies themselves, or as
the case may be, the inputs or
input services used in such
supplies, the due date for
furnishing of return under
section 39 in respect of such
supplies;]
(c) in the case of services exported
out of India where a refund of
tax paid is available in respect
of services themselves or, as
the case may be, the inputs or
input services used in such
services, the date of–
(i) receipt of payment in
convertible foreign
197
exchange [or in Indian
rupees wherever permitted
by the Reserve Bank of
India], where the supply of
services had been completed
prior to the receipt of such
payment; or
(ii) issue of invoice, where
payment for the services had
been received in advance
prior to the date of issue of
the invoice;
(d) in case where the tax becomes
refundable as a consequence of
judgment, decree, order or
66
direction of the Appellate
Authority, Appellate Tribunal or
any court, the date of
communication of such
judgment, decree, order or
direction;
[(e) in the case of refund of
unutilised input tax credit under
clause (ii) of the first proviso to
sub-section (3), the due date
for furnishing of return under
Section 39 for the period in
which such claim for refund
arises;]
(f) in the case where tax is paid
provisionally under this Act or
the rules made thereunder, the
date of adjustment of tax after
the final assessment thereof;
(g) in the case of a person, other
than the supplier, the date of
receipt of goods or services or
both by such person; and
(h) in any other case, the date of
payment of tax.”
“59. Self-assessment.–Every registered
person shall self-assess the taxes payable
under this Act and furnish a return for each tax
period as specified under Section 39.”
“60. Provisional assessment.–(1) Subject
to the provisions of sub-section (2), where the
taxable person is unable to determine the
value of goods or services or both or determine
the rate of tax applicable thereto, he may
request the proper officer in writing giving
reasons for payment of tax on a provisional
basis and the proper officer shall pass an
67order, within a period not later than ninety
days from the date of receipt of such request,
allowing payment of tax on provisional basis at
such rate or on such value as may be specified
by him.
(2) The payment of tax on provisional basis
may be allowed, if the taxable person executes
a bond in such form as may be prescribed, and
with such surety or security as the proper
officer may deem fit, binding the taxable
person for payment of the difference between
the amount of tax as may be finally assessed
and the amount of tax provisionally assessed.
(3) The proper officer shall, within a period
not exceeding six months from the date of the
communication of the order issued under sub-
section (1), pass the final assessment order
after taking into account such information as
may be required for finalizing the assessment:
Provided that the period specified in this
sub-section may, on sufficient cause being
shown and for reasons to be recorded in
writing, be extended by the Joint
Commissioner or Additional Commissioner
for a further period not exceeding six
months and by the Commissioner for such
further period not exceeding four years.
(4) The registered person shall be liable to
pay interest on any tax payable on the supply
of goods or services or both under provisional
assessment but not paid on the due date
specified under sub-section (7) of Section 39
or the rules made thereunder, at the rate
specified under sub-section (1) of Section 50,
from the first day after the due date of
payment of tax in respect of the said supply of
goods or services or both till the date of actual
payment, whether such amount is paid before
68or after the issuance of order for final
assessment.
(5) Where the registered person is entitled
to a refund consequent to the order of final
assessment under sub-section (3), subject to
the provisions of sub-section (8) of Section 54,
interest shall be paid on such refund as
provided in Section 56.”
“61. Scrutiny of returns.–(1) The proper
officer may scrutinize the return and related
particulars furnished by the registered person
to verify the correctness of the return and
inform him of the discrepancies noticed, if any,
in such manner as may be prescribed and seek
his explanation thereto.
(2) In case the explanation is found
acceptable, the registered person shall be
informed accordingly and no further action
shall be taken in this regard.
(3) In case no satisfactory explanation is
furnished within a period of thirty days of being
informed by the proper officer or such further
period as may be permitted by him or where
the registered person, after accepting the
discrepancies, fails to take the corrective
measure in his return for the month in which
the discrepancy is accepted, the proper officer
may initiate appropriate action including those
under Section 65 or Section 66 or Section 67,
or proceed to determine the tax and other
dues under Section 73 or Section 74 [or
Section 74-A].”
“62. Assessment of non-filers of returns.–
(1) Notwithstanding anything to the contrary
contained in Section 73 or Section 74 [or
Section 74-A], where a registered person fails
to furnish the return under Section 39 or
69Section 45, even after the service of a notice
under Section 46, the proper officer may
proceed to assess the tax liability of the said
person to the best of his judgement taking into
account all the relevant material which is
available or which he has gathered and issue
an assessment order within a period of five
years from the date specified under Section 44
for furnishing of the annual return for the
financial year to which the tax not paid relates.
(2) Where the registered person furnishes a
valid return within [sixty days] of the service
of the assessment order under sub-section (1),
the said assessment order shall be deemed to
have been withdrawn but the liability for
payment of interest under sub-section (1) of
Section 50 or for payment of late fee under
Section 47 shall continue:
[Provided that where the registered person
fails to furnish a valid return within sixty days
of the service of the assessment order under
sub-section (1), he may furnish the same
within a further period of sixty days on
payment of an additional late fee of one
hundred rupees for each day of delay beyond
sixty days of the service of the said
assessment order and in case he furnishes
valid return within such extended period, the
said assessment order shall be deemed to have
been withdrawn, but the liability to pay interest
under sub-section (1) of Section 50 or to pay
late fee under Section 47 shall continue.]”
“63. Assessment of unregistered
persons.–Notwithstanding anything to the
contrary contained in Section 73 or Section 74
or Section 74-A], where a taxable person fails
to obtain registration even though liable to do
so or whose registration has been cancelled
under sub-section (2) of Section 29 but who
70was liable to pay tax, the proper officer may
proceed to assess the tax liability of such
taxable person to the best of his judgment for
the relevant tax periods and issue an
assessment order within a period of five years
from the date specified under Section 44 for
furnishing of the annual return for the financial
year to which the tax not paid relates:
Provided that no such assessment order
shall be passed without giving the person an
opportunity of being heard.”
“64. Summary assessment in certain
special cases.–(1) The proper officer may,
on any evidence showing a tax liability of a
person coming to his notice, with the previous
permission of Additional Commissioner or Joint
Commissioner, proceed to assess the tax
liability of such person to protect the interest
of revenue and issue an assessment order, if
he has sufficient grounds to believe that any
delay in doing so may adversely affect the
interest of revenue:
Provided that where the taxable person
to whom the liability pertains is not
ascertainable and such liability pertains to
supply of goods, the person in charge of
such goods shall be deemed to be the
taxable person liable to be assessed and
liable to pay tax and any other amount due
under this section.
(2) On an application made by the taxable
person within thirty days from the date of
receipt of order passed under sub-section (1)
or on his own motion, if the Additional
Commissioner or Joint Commissioner considers
that such order is erroneous, he may withdraw
such order and follow the procedure laid down
in Section 73 or Section 74 [or Section 74-A].”
71
“65. Audit by tax authorities.–(1) The
Commissioner or any officer authorised by him,
by way of a general or a specific order, may
undertake audit of any registered person for
such period, at such frequency and in such
manner as may be prescribed.
(2) The officers referred to in sub-section
(1) may conduct audit at the place of business
of the registered person or in their office.
(3) The registered person shall be informed
by way of a notice not less than fifteen working
days prior to the conduct of audit in such
manner as may be prescribed.
(4) The audit under sub-section (1) shall be
completed within a period of three months
from the date of commencement of the audit:
Provided that where the Commissioner is
satisfied that audit in respect of such
registered person cannot be completed
within three months, he may, for the
reasons to be recorded in writing, extend
the period by a further period not exceeding
six months.
Explanation.–For the purposes of this sub-
section, the expression “commencement of
audit” shall mean the date on which the
records and other documents, called for by the
tax authorities, are made available by the
registered person or the actual institution of
audit at the place of business, whichever is
later.
(5) During the course of audit, the
authorised officer may require the registered
person,–
(i) to afford him the necessary facility to
verify the books of account or other
documents as he may require;
72
(ii) to furnish such information as he may
require and render assistance for
timely completion of the audit.
(6) On conclusion of audit, the proper
officer shall, within thirty days, inform the
registered person, whose records are audited,
about the findings, his rights and obligations
and the reasons for such findings.
(7) Where the audit conducted under sub-
section (1) results in detection of tax not paid
or short paid or erroneously refunded, or input
tax credit wrongly availed or utilised, the
proper officer may initiate action under Section
73 or Section 74 [or Section 74-A].”
“66. Special audit.–(1) If at any stage of
scrutiny, inquiry, investigation or any other
proceedings before him, any officer not below
the rank of Assistant Commissioner, having
regard to the nature and complexity of the
case and the interest of revenue, is of the
opinion that the value has not been correctly
declared or the credit availed is not within the
normal limits, he may, with the prior approval
of the Commissioner, direct such registered
person by a communication in writing to get
his records including books of account
examined and audited by a chartered
accountant or a cost accountant as may be
nominated by the Commissioner.
(2) The chartered accountant or cost
accountant so nominated shall, within the
period of ninety days, submit a report of such
audit duly signed and certified by him to the
said Assistant Commissioner mentioning
therein such other particulars as may be
specified:
Provided that the Assistant
Commissioner may, on an application made
73to him in this behalf by the registered
person or the chartered accountant or cost
accountant or for any material and sufficient
reason, extend the said period by a further
period of ninety days.
(3) The provisions of sub-section (1) shall
have effect notwithstanding that the accounts
of the registered person have been audited
under any other provisions of this Act or any
other law for the time being in force.
(4) The registered person shall be given an
opportunity of being heard in respect of any
material gathered on the basis of special audit
under sub-section (1) which is proposed to be
used in any proceedings against him under this
Act or the rules made thereunder.
(5) The expenses of the examination and
audit of records under sub-section (1),
including the remuneration of such chartered
accountant or cost accountant, shall be
determined and paid by the Commissioner and
such determination shall be final.
(6) Where the special audit conducted
under sub-section (1) results in detection of
tax not paid or short paid or erroneously
refunded, or input tax credit wrongly availed or
utilised, the proper officer may initiate action
under Section 73 or Section 74 [or Section 74-
A].”
“67. Power of inspection, search and
seizure.–(1) Where the proper officer, not
below the rank of Joint Commissioner, has
reasons to believe that–
(a) a taxable person has suppressed any
transaction relating to supply of goods
or services or both or the stock of
goods in hand, or has claimed input
tax credit in excess of his entitlement
74under this Act or has indulged in
contravention of any of the provisions
of this Act or the rules made
thereunder to evade tax under this
Act; or
(b) any person engaged in the business
of transporting goods or an owner or
operator of a warehouse or a godown
or any other place is keeping goods
which have escaped payment of tax or
has kept his accounts or goods in
such a manner as is likely to cause
evasion of tax payable under this Act,
he may authorise in writing any other
officer of central tax to inspect any
places of business of the taxable
person or the persons engaged in the
business of transporting goods or the
owner or the operator of warehouse
or godown or any other place.
(2) Where the proper officer, not
below the rank of Joint Commissioner,
either pursuant to an inspection
carried out under sub-section (1) or
otherwise, has reasons to believe that
any goods liable to confiscation or any
documents or books or things, which
in his opinion shall be useful for or
relevant to any proceedings under this
Act, are secreted in any place, he may
authorise in writing any other officer
of central tax to search and seize or
may himself search and seize such
goods, documents or books or things:
Provided that where it is not
practicable to seize any such
goods, the proper officer, or any
officer authorised by him, may
serve on the owner or the
75custodian of the goods an order
that he shall not remove, part with,
or otherwise deal with the goods
except with the previous
permission of such officer:
Provided further that the
documents or books or things so
seized shall be retained by such
officer only for so long as may be
necessary for their examination and
for any inquiry or proceedings under
this Act.
(3) The documents, books or
things referred to in sub-section (2) or
any other documents, books or things
produced by a taxable person or any
other person, which have not been
relied upon for the issue of notice
under this Act or the rules made
thereunder, shall be returned to such
person within a period not exceeding
thirty days of the issue of the said
notice.
(4) The officer authorised under
sub-section (2) shall have the power
to seal or break open the door of any
premises or to break open
any almirah, electronic devices, box,
receptacle in which any goods,
accounts, registers or documents of
the person are suspected to be
concealed, where access to such
premises, almirah, electronic devices,
box or receptacle is denied.
(5) The person from whose custody
any documents are seized under sub-
section (2) shall be entitled to make
copies thereof or take extracts
therefrom in the presence of an
76
authorised officer at such place and
time as such officer may indicate in
this behalf except where making such
copies or taking such extracts may, in
the opinion of the proper officer,
prejudicially affect the investigation.
(6) The goods so seized under sub-
section (2) shall be released, on a
provisional basis, upon execution of a
bond and furnishing of a security, in
such manner and of such quantum,
respectively, as may be prescribed or
on payment of applicable tax, interest
and penalty payable, as the case may
be.
(7) Where any goods are seized
under sub-section (2) and no notice in
respect thereof is given within six
months of the seizure of the goods,
the goods shall be returned to the
person from whose possession they
were seized:
Provided that the period of six
months may, on sufficient cause
being shown, be extended by the
proper officer for a further period
not exceeding six months.
(8) The Government may, having
regard to the perishable or hazardous
nature of any goods, depreciation in
the value of the goods with the
passage of time, constraints of
storage space for the goods or any
other relevant considerations, by
notification, specify the goods or class
of goods which shall, as soon as may
be after its seizure under sub-section
(2), be disposed of by the proper
77officer in such manner as may be
prescribed.
(9) Where any goods, being goods
specified under sub-section (8), have
been seized by a proper officer, or
any officer authorised by him under
sub-section (2), he shall prepare an
inventory of such goods in such
manner as may be prescribed.
(10) The provisions of the Code of
Criminal Procedure, 1973 (2 of 1974),
relating to search and seizure, shall,
so far as may be, apply to search and
seizure under this section subject to
the modification that sub-section (5)
of Section 165 of the said Code shall
have effect as if for the word
“Magistrate”, wherever it occurs, the
word “Commissioner” were
substituted.
(11) Where the proper officer has
reasons to believe that any person
has evaded or is attempting to evade
the payment of any tax, he may, for
reasons to be recorded in writing,
seize the accounts, registers or
documents of such person produced
before him and shall grant a receipt
for the same, and shall retain the
same for so long as may be necessary
in connection with any proceedings
under this Act or the rules made
thereunder for prosecution.
(12) The Commissioner or an
officer authorised by him may cause
purchase of any goods or services or
both by any person authorised by him
from the business premises of any
taxable person, to check the issue of
78tax invoices or bills of supply by such
taxable person, and on return of
goods so purchased by such officer,
such taxable person or any person in
charge of the business premises shall
refund the amount so paid towards
the goods after cancelling any tax
invoice or bill of supply issued earlier.”
“73. Determination of tax [ pertaining to
the period up to Financial Year 2023-24,]
not paid or short paid or erroneously
refunded or input tax credit wrongly
availed or utilised for any reason other
than fraud or any wilful-misstatement or
suppression of facts.–(1) Where it appears
to the proper officer that any tax has not been
paid or short paid or erroneously refunded, or
where input tax credit has been wrongly
availed or utilised for any reason, other than
the reason of fraud or any wilful-misstatement
or suppression of facts to evade tax, he shall
serve notice on the person chargeable with tax
which has not been so paid or which has been
so short paid or to whom the refund has
erroneously been made, or who has wrongly
availed or utilised input tax credit, requiring
him to show cause as to why he should not pay
the amount specified in the notice along with
interest payable thereon under Section 50 and
a penalty leviable under the provisions of this
Act or the rules made thereunder.
(2) The proper officer shall issue
the notice under sub-section (1) at
least three months prior to the time
limit specified in sub-section (10) for
issuance of order.
(3) Where a notice has been issued
for any period under sub-section (1),
79the proper officer may serve a
statement, containing the details of
tax not paid or short paid or
erroneously refunded or input tax
credit wrongly availed or utilised for
such periods other than those covered
under sub-section (1), on the person
chargeable with tax.
(4) The service of such statement
shall be deemed to be service of
notice on such person under sub-
section (1), subject to the condition
that the grounds relied upon for such
tax periods other than those covered
under sub-section (1) are the same as
are mentioned in the earlier notice.
(5) The person chargeable with tax
may, before service of notice under
sub-section (1) or, as the case may
be, the statement under sub-section
(3), pay the amount of tax along with
interest payable thereon under
Section 50 on the basis of his own
ascertainment of such tax or the tax
as ascertained by the proper officer
and inform the proper officer in
writing of such payment.
(6) The proper officer, on receipt of
such information, shall not serve any
notice under sub-section (1) or, as
the case may be, the statement under
sub-section (3), in respect of the tax
so paid or any penalty payable under
the provisions of this Act or the rules
made thereunder.
(7) Where the proper officer is of
the opinion that the amount paid
under sub-section (5) falls short of
the amount actually payable, he shall
80
proceed to issue the notice as
provided for in sub-section (1) in
respect of such amount which falls
short of the amount actually payable.
(8) Where any person chargeable
with tax under sub-section (1) or sub-
section (3) pays the said tax along
with interest payable under Section
50 within thirty days of issue of show
cause notice, no penalty shall be
payable and all proceedings in respect
of the said notice shall be deemed to
be concluded.
(9) The proper officer shall, after
considering the representation, if any,
made by person chargeable with tax,
determine the amount of tax, interest
and a penalty equivalent to ten per
cent. of tax or ten thousand rupees,
whichever is higher, due from such
person and issue an order.
(10) The proper officer shall issue
the order under sub-section (9) within
three years from the due date for
furnishing of annual return for the
financial year to which the tax not
paid or short paid or input tax credit
wrongly availed or utilised relates to
or within three years from the date of
erroneous refund.
(11) Notwithstanding anything
contained in sub-section (6) or sub-
section (8), penalty under sub-section
(9) shall be payable where any
amount of self-assessed tax or any
amount collected as tax has not been
paid within a period of thirty days
from the due date of payment of such
tax.
81
[(12) The provisions of this section
shall be applicable for determination
of tax pertaining to the period up to
Financial Year 2023-24.]”
“74. Determination of tax [, pertaining to
the period up to Financial Year 2023-24,]
not paid or short paid or erroneously
refunded or input tax credit wrongly
availed or utilised by reason of fraud or
any wilful-misstatement or suppression of
facts.–(1) Where it appears to the proper
officer that any tax has not been paid or short
paid or erroneously refunded or where input
tax credit has been wrongly availed or utilised
by reason of fraud, or any wilful-misstatement
or suppression of facts to evade tax, he shall
serve notice on the person chargeable with tax
which has not been so paid or which has been
so short paid or to whom the refund has
erroneously been made, or who has wrongly
availed or utilised input tax credit, requiring
him to show cause as to why he should not pay
the amount specified in the notice along with
interest payable thereon under Section 50 and
a penalty equivalent to the tax specified in the
notice.
(2) The proper officer shall issue
the notice under sub-section (1) at
least six months prior to the time limit
specified in sub-section (10) for
issuance of order.
(3) Where a notice has been issued
for any period under sub-section (1),
the proper officer may serve a
statement, containing the details of
tax not paid or short paid or
erroneously refunded or input tax
credit wrongly availed or utilised for
82such periods other than those covered
under sub-section (1), on the person
chargeable with tax.
(4) The service of statement under
sub-section (3) shall be deemed to be
service of notice under sub-section (1)
of Section 73, subject to the condition
that the grounds relied upon in the
said statement, except the ground of
fraud, or any wilful-misstatement or
suppression of facts to evade tax, for
periods other than those covered
under sub-section (1) are the same as
are mentioned in the earlier notice.
(5) The person chargeable with tax
may, before service of notice under
sub-section (1), pay the amount of
tax along with interest payable under
Section 50 and a penalty equivalent to
fifteen per cent. of such tax on the
basis of his own ascertainment of
such tax or the tax as ascertained by
the proper officer and inform the
proper officer in writing of such
payment.
(6) The proper officer, on receipt of
such information, shall not serve any
notice under sub-section (1), in
respect of the tax so paid or any
penalty payable under the provisions
of this Act or the rules made
thereunder.
(7) Where the proper officer is of
the opinion that the amount paid
under sub-section (5) falls short of
the amount actually payable, he shall
proceed to issue the notice as
provided for in sub-section (1) in
83respect of such amount which falls
short of the amount actually payable.
(8) Where any person chargeable
with tax under sub-section (1) pays
the said tax along with interest
payable under Section 50 and a
penalty equivalent to twenty-five per
cent. of such tax within thirty days of
issue of the notice, all proceedings in
respect of the said notice shall be
deemed to be concluded.
(9) The proper officer shall, after
considering the representation, if any,
made by the person chargeable with
tax, determine the amount of tax,
interest and penalty due from such
person and issue an order.
(10) The proper officer shall issue
the order under sub-section (9) within
a period of five years from the due
date for furnishing of annual return
for the financial year to which the tax
not paid or short paid or input tax
credit wrongly availed or utilised
relates to or within five years from the
date of erroneous refund.
(11) Where any person served with
an order issued under sub-section (9)
pays the tax along with interest
payable thereon under Section 50 and
a penalty equivalent to fifty per cent.
of such tax within thirty days of
communication of the order, all
proceedings in respect of the said
notice shall be deemed to be
concluded.
[(12) The provisions of this section
shall be applicable for determination
84
of tax pertaining to the period up to
Financial Year 2023-24.]
Explanation 1.–For the purposes
of Section 73 and this section,–
(i) the expression “all
proceedings in respect of the
said notice” shall not include
proceedings under Section
132;
(ii) where the notice under the
same proceedings is issued
to the main person liable to
pay tax and some other
persons, and such
proceedings against the main
person have been concluded
under Section 73 or Section
74, the proceedings against
all the persons liable to pay
penalty under [Sections 122
and 125] are deemed to be
concluded.
Explanation 2.– [* * *]”
26. In terms of Section 2(106), the tax period
would mean the period for which a return is required
to be furnished.
27. Chapter IX of the Act deals with the filing
of returns. Section 37 requires every registered
person, other than an Input Service Distributor, to
85
furnish, in such form and manner as may be
prescribed, the details of outward supplies of goods or
services or both effected during a tax period, on or
before the 10th day of the month succeeding the said
tax period. For convenience, this may be referred to
as a monthly return. Sub-section (3) of Section 37
provides for rectification of any error or omission in
the return furnished under sub-section (1). Section 38
mandates communication of the details of inward
supplies and input tax credit by the registered supplier
to the recipient of the supply. Section 39 requires
every registered person, other than an Input Service
Distributor or a non-resident taxable person, to
furnish a return of inward and outward supplies of
goods or services or both for every calendar month, in
such form and manner and within such time as may
be prescribed. The other compliances contemplated
under the said section are also structured with
86
reference to each calendar month. Section 41 deals
with the availment of input tax credit on the basis of
self-assessment as reflected in the return, and the
corresponding amount credited to the electronic credit
ledger. Section 44 requires every registered person,
other than an Input Service Distributor, to furnish an
annual return for each financial year. Such return is to
include a self-certified reconciliation statement,
reconciling the value of supplies declared in the
returns furnished for the financial year with the
audited annual financial statements, and is to be filed
electronically within such time and in such form as
may be prescribed. Sub-section (2) prescribes the
outer time limit for furnishing the annual return.
Section 45 requires every registered person, who is
required to furnish a return under Section 39 and
whose registration has been cancelled, to furnish a
final return in such form and manner as may be
87
prescribed. Section 49, falling under Chapter X, deals
with the payment of tax, interest, penalty, and other
amounts. Section 51 deals with tax deduction at
source and requires deduction of tax at the prescribed
rate from payments made towards taxable supplies of
goods or services or both. Section 52 deals with the
collection of tax at source. Section 54 deals with
refund of tax and prescribes a limitation period of two
years from the relevant date. The “relevant date” is
defined in clause (2) of the Explanation thereto.
Chapter XII of the Act provides for assessment.
Section 59 mandates that every registered person
shall self-assess the tax payable under the Act and
furnish returns for each tax period as specified under
Section 39. Section 39 pertains to the furnishing of
monthly returns. Section 60 provides for provisional
assessment in cases where a taxable person is unable
to determine the value of goods or services or both or
88
the rate of tax applicable thereto. Upon a written
request being made to the proper officer, the proper
officer may pass an order permitting payment of tax
on a provisional basis at such rate or on such value as
may be specified. Section 61 enables the proper
officer to scrutinize the return and the related
particulars furnished by a registered person. While
undertaking such scrutiny, if any discrepancies are
noticed, the proper officer is required to inform the
registered person and seek an explanation. If the
explanation furnished is found satisfactory, the
registered person is to be informed accordingly, and
no further action is contemplated. However, if no
satisfactory explanation is furnished within a period of
thirty days from the date of such intimation, or if the
registered person fails to take corrective measures in
the return for the period in which the discrepancy is
accepted, the proper officer may initiate proceedings
89
under Sections 73 or 74 for determination of tax and
other dues. Section 62 deals with the assessment of
non-filers of returns, and in such cases, proceedings
may be initiated under Sections 73 or 74 of the Act.
Similarly, Section 63 deals with the assessment of
unregistered persons, and in such cases, proceedings
may be initiated under Sections 73 or 74 of the Act.
Section 64 enables the proper officer to undertake
summary assessment in certain special cases, and
such assessment is to be carried out in accordance
with the procedure contemplated under Sections 73 or
74 of the Act. A combined reading of Sections 59, 60,
61, 62, 63, and 64, which govern various modes of
assessment, indicates that in the event of any default,
the consequence is initiation of proceedings under
Sections 73 or 74 of the Act. The aforesaid provisions
do not indicate that such proceedings are to be
90
confined to a financial year; rather, they are default-
specific.
28. In accordance with the provisions of the
Act, a registered person is required to comply with the
prescribed requirements in the prescribed manner and
in the event of non-compliance, it contemplates
determination under Sections 73 and 74 of the Act
without reference to a financial year. If the default
pertains to a monthly return, proceedings may relate
to that month and if default pertains to annual return,
the proceedings may relate to the said period.
Therefore, the tax period defined has to be
understood in the contest in which the requirement is
prescribed and it cannot be confined to a month or a
financial year. It would be useful to refer the
provisions contained in Chapter XIII in respect of
audit. Section 65 enables the Commissioner or any
officer authorised by him to undertake an audit of any
91
registered person for such period, at such frequency,
and in such manner as may be prescribed. Such audit
is not confined to a tax period or a financial year;
rather, it may extend to such period as the
Commissioner or the authorised officer deems fit.
Sub-section (7) of Section 65 provides that, upon
completion of audit, where it is found that tax has not
been paid or has been short paid, or has been
erroneously refunded, or where input tax credit has
been wrongly availed or utilised, the proper officer is
required to initiate proceedings under Sections 73 or
74 of the Act. Even in the context of Section 65,
therefore, Sections 73 and 74 cannot be construed as
being confined to a financial year.
29. Section 66 of the Act prescribes for special
audit of the books of account of a registered person
by a Chartered Accountant or a Cost Accountant
nominated by the Commissioner and such special
92
audit is not confined to a specific period or to a
financial year. Sub-section (6) of Section 66 provides
that, upon submission of the Special Audit Report, if it
is found that tax has not been paid or has been short
paid, or has been erroneously refunded, or that input
tax credit has been wrongly availed or utilised, the
proper officer is required to initiate proceedings under
Sections 73 or 74 of the Act.
30. A conjoint reading of Section 66 with
Sections 73 and 74 of the Act would not indicate that
such proceedings are to be confined to a tax period or
a financial year.
31. Section 67 of the Act under Chapter XIV
deals with inspection, search, seizure and arrest. The
material unearthed in the course of such inspection
search or seizure may lead to initiation of proceedings
under Sections 73 and 74 of the Act, as the case may
93
be. Such proceedings are also not confined to any
specific tax period or financial year. Combined reading
of the above said provisions would indicate that
wherever the legislature intended the proceedings to
be confined to a specific tax period, be it a month or a
financial year, it has expressly provided so.
Conversely, whenever such confinement was not
intended, the statute either employs the expression
“such period” or does not refer to any period at all.
32. We have to take note of the expressions
used in the Act by the legislature i.e., “tax period”,
“financial year”, “such period” or in some provisions,
no reference to a period. On a combined reading of
the provisions of the Act and particularly Sections 73
and 74 of the Act, the irresistible conclusion would be
that the proceedings under Sections 73 and 74 of the
Act were never intended to be confined to a financial
year.
94
33. Sections 73 and 74, falling under Chapter
XV, deal with demands and recovery. Sections 73 and
74 deal with determination of defaults arising under
the provisions of the Act, other than those relating to
assessment. The scope and ambit of Sections 73 and
74 must be understood in the context in which they
are enacted. Significantly, the provisions consciously
employ the expression “any period” while providing for
issuance of notice. In the backdrop of the statutory
scheme analysed hereinabove, such expression cannot
be rendered otiose or ignored. The expression “any
period” is not defined under the Act and cannot be
equated with “tax period.” A “tax period” denotes the
period for which a return is required to be furnished,
which may be monthly or annual. Therefore, the
concept of “tax period” is relevant in the context of
provisions dealing with furnishing of returns, and
cannot be imported into the interpretation of Sections
95
73 and 74. It is, however, contended that sub-section
(10) of Sections 73 and 74 prescribes a limitation for
passing orders under sub-section (9) with reference to
a financial year, thereby indicating that proceedings
under Sections 73 and 74 are financial year-specific.
This contention cannot be accepted. The prescription
of limitation under sub-section (10) operates within a
limited sphere and does not control or restrict the
scope of issuance of notice under Sections 73 and 74.
Only because Sub-Section (10) of Sections 73 and 74
of the Act refers to financial year, the entire provision
cannot be construed as being confined to a financial
year. A reading of Sections 73 and 74 of the Act would
make it clear that it provides a complete mechanism
for determination of demand and it constitutes a code
in itself.
34. A plain reading of Section 74 would indicate
that Sub-section (2) mandates that the show cause
96
notice under sub-section (1) shall be issued at least
six months prior to the time limit specified under sub-
section (10). Sub-section (3) enables issuance of a
statement containing details of tax not paid, short
paid, erroneously refunded, or input tax credit wrongly
availed or utilised, for periods other than those
covered under sub-section (1). Upon issuance of such
a statement, sub-section (4) deems it to be a notice
under Section 73(1), unless the case involves fraud,
wilful misstatement, or suppression of facts to evade
tax. Sub-section (5) provides an opportunity to the
person chargeable to tax to pay the amount of tax
along with interest and a penalty equivalent to 15% of
such tax, either on the basis of self-ascertainment or
as ascertained by the proper officer, and to inform the
proper officer in writing of such payment before
service of notice under sub-section (1). As per sub-
section (6), upon receipt of such information, the
97
proper officer shall not issue a notice under sub-
section (1) in respect of the tax so paid or the penalty.
However, if the proper officer is of the opinion that the
amount so paid falls short of the actual liability, sub-
section (7) enables issuance of a show cause notice to
the extent of the shortfall. Sub-section (8) provides
for deemed conclusion of proceedings under sub-
section (1) where the person chargeable pays the tax
along with interest and a penalty equivalent to 25% of
such tax within thirty days of issuance of notice. In
cases where objections are filed to the show cause
notice, sub-section (9) empowers the proper officer to
determine the amount of tax, interest, and penalty,
and to pass an order. Sub-section (10) prescribes the
limitation for passing such an order under sub-section
(9). The proceedings under sub-section (1) may relate
to defaults arising from monthly returns, annual
returns, or even periods extending beyond a financial
98
year. While prescribing a limitation period of five
years, the statute necessarily provides a reference
point for commencement of such limitation. For this
purpose, the due date for furnishing the annual return
for the relevant financial year pertaining to the period
covered under the show cause notice is adopted. Mere
reference to “financial year” in sub-section (10)
neither indicates, nor can it be construed to mean,
that Sections 73/74 are confined to a financial year.
Such an interpretation is not borne out from a plain
reading of the provisions. It is a settled principle that,
while interpreting a fiscal statute, the provisions must
be construed strictly in accordance with their plain
language. Nothing can be added, omitted, or implied.
Any such exercise would amount to rewriting the
legislation, which is impermissible. The contention
urged by the respondents that Sections 73/74 are to
be read as confined to a financial year does not
99
withstand scrutiny when sub-sections (2), (3), and (4)
of Section 74 are examined in their proper context. By
way of illustration, if a notice under sub-section (1) is
assumed to cover a period of twelve months
corresponding to a financial year, sub-section (3)
expressly enables the proper officer to serve a
statement containing details of tax not paid, short
paid, erroneously refunded, or input tax credit wrongly
availed or utilised, for “such periods” other than those
covered under sub-section (1). The use of the
expression “such periods” in sub-section (3) is
significant. If the legislative intent was to confine
proceedings strictly to a financial year, the language
employed in sub-section (3) would have been
materially different. Further, if sub-section (1) were to
be restricted to a financial year, i.e., a period of
twelve months, no additional period could be brought
within the ambit of the same proceedings as
100
contemplated under sub-section (3). Such a restrictive
interpretation would render sub-section (3)
unworkable and lead to an anomalous situation.
Therefore, construing Sections 73/74 in the manner
suggested by the respondents would result in manifest
absurdity, which is impermissible in statutory
interpretation.
35. To appreciate the contention of the learned
counsel for the respondent/assessee Sri.Bharath,
placing reliance on Form-GST DRC-01, it would be
necessary to go through the said form, which reads as
follows:
Reference No.:……………….
Date:……………….
To
………………. GSTIN/Temp.ID
………………. Name
………………. Address
Tax Period…………….. F.Y. ……………
Act –
Section/sub-section under which SCN is being issued –
SCN Reference No. …………….. Date
………
Summary of Show Cause Notice
(a) Brief facts of the case :
(b) Grounds :
(c) Tax and other dues :
101
(Amount in Rs.)
2
[Sr Ta Turnov Tax Ac POS Ta Intere Penalt Fe Other Tot
. x er Period t (Place x st y e s al
No. rat of
Fro T
e Suppl
m o
y)
1 2 3 4 5 6 7 8 9 10 11 12
Tot
al
………………………………..
Signature
Name………………………..
Designation…………………
Jurisdiction………………….
Address………………………
Notes—-
1. Only applicable fields may be filled up.
2. Column Nos. 2,3,4 and 5 of the above Table i.e. tax rate, turnover and
tax period are not mandatory.
3. Place of Supply (POS) details shall be required only if the demand in
created under the IGST Act.”
The above is the prescribed format of show cause
notice to be issued under Sections 73 and 74 of the
Act. It is contended that as the form refers to tax
period and financial year, the proceedings under
Sections 73 and 74 of the Act must necessarily be
confined to a financial year. However, on going
through the above format, it is gathered that it
requires furnishing certain particulars in a tabular
format. Though column No.4 refers to the tax period,
102
note appended to the form clarifies that column No.4
is not mandatory. Therefore, reference to tax period
or financial year in the format cannot be relied upon
to say that show cause notice shall be confined to a
financial year. It could at the best may be relevant for
computation of limitation under Sub-Section (10) and
it would not affect the exercise of power under
Sections 73 and 74 of the Act.
36. It is contended that, where a consolidated
show cause notice is issued, the period covered
therein may include cases involving fraud,
misrepresentation, or suppression of facts (FMS), as
well as cases not involving such elements (non-FMS).
Since Section 73 governs non-FMS cases and Section
74 governs FMS cases, each prescribing different
periods of limitation for conclusion of proceedings, it is
urged that issuance of show cause notices with
reference to specific tax periods is necessary to avoid
103
anomalies. However, Circular No.5/2023-GST dated
13.12.2023 answers this contention and the relevant
paragraph of the circular reads as follows:
“3.3 From the perusal of wording of
section 74(1) of CGST Act, it is evident that
section 74(1) can be invoked only in cases
where there is a fraud or wilful mis- statement
or suppression of facts to evade tax on the
part of the said taxpayer. Section 74(1) cannot
be invoked merely on account of non-payment
of GST, without specific element of fraud or
wilful mis-statement or suppression of facts to
evade tax. Therefore, only in the cases where
the investigation indicates that there is
material evidence of fraud or wilful mis-
statement or suppression of fact to evade tax
on the part of the taxpayer, provisions of
section 74(1) of CGST Act may be invoked for
issuance of show cause notice, and such
evidence should also be made a part of the
show cause notice.”
Even otherwise, the text of Section 74 is unambiguous
in its application to cases involving fraud, wilful
104
misstatement, or suppression of facts. Sub-section (4)
of Section 74 enables a notice issued under sub-
section (3) to be treated as one under Section 73(1)
where the element of fraud, wilful misstatement, or
suppression is not made out. The principle underlying
sub-section (4) would equally apply in the context of
sub-section (1), inasmuch as, unless the proper officer
establishes fraud, wilful misstatement, or suppression
of facts, the limitation prescribed would
correspondingly be governed by Section 73(10). It
cannot be contended that merely because certain
issues are included in a show cause notice issued
under Section 74(1), the protection available under
Section 73(10) stands displaced.
37. The extended period of limitation under
Section 74(10) is not automatic; it is attracted only
upon a determination under sub-section (9) that the
case involves fraud, wilful misstatement, or
105
suppression of facts. In all other cases, the limitation
would be governed by Section 73(10). Thus, the
scheme preserves the limitation in favour of the
assessee, except in cases where the statutory
conditions for invoking the extended period are duly
established.
38. It is contended that the Central Board of
Indirect Taxes and Customs, for the purposes of
Sections 74A to 75(2), has prescribed pecuniary
jurisdiction for different ranks of proper officers. In
support, reliance is placed on Circular No.
254/11/2025-GST dated 27.10.2025, wherein the
table specifies the functions of the proper officers and
the corresponding monetary limits for issuance of
show cause notices namely, Superintendent of Central
Tax up to Rs.10,00,000/-, Deputy/Assistant
Commissioner up to Rs.1,00,00,000/-, and
106
Additional/Joint Commissioner without any monetary
limit.
39. It is submitted that proper officer is
determined based on the monetary limit based on the
tax demand proposed for issuance of show cause
notice under Sub-Section (1) of Sections 73 and 74 of
the Act. Sub-Section (3) further enables issuance of
additional statements for the same or extended
period. The Circular, taking note of the possibility that
such additional statements may alter the pecuniary
jurisdiction, provides a mechanism, whereby
jurisdiction is determined based on the total amount
involved in the proceedings. It is further clarified that,
if the pecuniary jurisdiction changes by virtue of
subsequent statements, the proceedings stand
transferred to the appropriate proper officer having
the requisite jurisdiction.
107
40. Thus, it is not a case where adjudication
would be undertaken dehors pecuniary jurisdiction.
The submission that, if show cause notices are
confined to a financial year or tax period, the
pecuniary jurisdiction would remain at a lower level,
whereas aggregation would enhance the quantum and
shift jurisdiction to a higher authority, is of no
relevance. The assessee’s concern is only that the
show cause notice be adjudicated by a proper officer
vested with jurisdiction, whether territorial or
pecuniary.
41. It is settled position of law that an assessee
has no right to chose the Adjudicating Authority.
Merely because combining of more than one financial
year, the pecuniary jurisdiction shifts to an officer of
the higher rank, no prejudice would be caused to the
assessee, since statutory safeguards, remedies and
determination of tax would remain as it is. Therefore,
108
the respondent/assessees contention with regard to
pecuniary jurisdiction cannot be accepted.
42. Learned counsel for the respondents
contends that, if a consolidated show cause notice is
issued, the entire period covered therein would be
reckoned for the purpose of sub-section (10), thereby
depriving the assessee of the benefit of limitation. We
find no merit in the said contention. Sub-section (10)
operates with reference to the financial year, and each
component period covered in the show cause notice
must independently satisfy the test of limitation
prescribed therein. If any portion of the period
covered by the notice is demonstrated to be beyond
the limitation stipulated under sub-section (10), the
same would be liable to be excluded as being time-
barred. However, issuance of a consolidated show
cause notice would not dilute or take away the
protection of limitation available under Sub-Section
109
(10) of Sections 73 and 74 of the Act. Each period
forming part of notice must satisfy scrutiny on the
touchstone of limitation and any portion falling short
of such test cannot be sustained.
43. Another submission advanced is that
Section 74A, having been made applicable from the
financial year 2024-25 onwards, indicates that
proceedings under Sections 73, 74, and 74A are
financial year-specific. This contention also cannot be
accepted. Section 74A, though newly introduced with
certain modifications, expressly provides under sub-
section (12) that it applies to determination of tax
pertaining to the financial year 2024-25 onwards.
However, the scope of issuance of show cause notice,
namely for “any period,” remains unchanged.
44. The Delhi High Court, in Ambika Traders
vs. Commissioner, 2025 SCC OnLine Del 6913 /
110
(2025) 33 Centax 189 (Del.), while examining the
validity of a common show cause notice covering
multiple financial years, and upon analysing the
scheme of the Act, has held as under:
“43. Insofar as the issue of consolidated
notice for various financial years is concerned,
a perusal of section 74 of the CGST Act would
itself show that at least insofar as fraudulently
availed or utilised ITC is concerned, the
language used in section 74(3) of the CGST Act
and section 74(4) of the CGST Act is “for any
period” and “for such periods” respectively.
This contemplates that a notice can be issued
for a period which could be more than one
financial year. Similar is the language even in
section 73 of the CGST Act. The relevant
provisions read as under:
“73. Determination of tax, pertaining to
the period up to financial year 2023-2024,
not paid or short paid or erroneously
refunded or input-tax credit wrongly availed
or utilised for any reason other than fraud
or any wilful misstatement or suppression of
facts.–
(1) and (2)…
(3) Where a notice has been issued for
any period under sub-section (1), the
proper officer may serve a statement,
containing the details of tax not paid or
short paid or erroneously refunded or input-
111
tax credit wrongly availed or utilised for
such periods other than those covered
under sub-section (1), on the person
chargeable with tax.
(4) The service of such statement shall
be deemed to be service of notice on such
person under sub-section (1), subject to the
condition that the grounds relied upon for
such tax periods other than those covered
under sub-section (1) are the same as are
mentioned in the earlier notice.
…
“74. Determination of tax, pertaining to the
period up to financial year 2023-2024, not paid
or short paid or erroneously refunded or input-
tax credit wrongly availed or utilised by reason
of fraud or any wilful misstatement or
suppression of facts.–(1) and (2)…
(3) Where a notice has been issued for any
period under sub-section (1), the proper officer
may serve a statement, containing the details
of tax not paid or short paid or erroneously
refunded or input-tax credit wrongly availed or
utilised for such periods other than those
covered under sub-section (1), on the person
chargeable with tax.
(4) The service of statement under sub-
section (3) shall be deemed to be service of
notice under sub-section (1) of section 73,
subject to the condition that the grounds relied
upon in the said statement, except the ground
of fraud, or any wilful misstatement or
suppression of facts to evade tax, for periods
other than those covered under sub-section (1)
112
are the same as are mentioned in the earlier
notice.”
44. Some of the other provisions of the
CGST Act, which are relevant, include section
2(106) of the CGST Act, which defines “tax
period” as under:
“2. (106) ‘tax period’ means the period for
which the return is required to be furnished.”
45. Thus, sections 74(3), 74(4), 73(3) and
73(4) of the CGST Act use the term “for any
period” and “for such periods”. This would be
in contrast with the language used in sections
73(10) and 74(10) of the CGST Act where the
term “financial year” is used. The said
provisions read as under:
“73. (10) The proper officer shall issue the
order under sub-section (9) within three years
from the due date for furnishing of annual
return for the financial year to which the tax
not paid or short paid or input-tax credit
wrongly availed or utilised relates to or within
three years from the date of erroneous refund.
74.(10) The proper officer shall issue the
order under sub-section (9) within a period of
five years from the due date for furnishing of
annual return for the financial year to which
the tax not paid or short paid or input-tax
credit wrongly availed or utilised relates to or
within five years from the date of erroneous
refund.”
The Legislature is thus, conscious of the fact
that insofar as wrongfully availed ITC is
concerned, the notice can relate to a period
113
and need not to be for a specific financial
year.”
46. The nature of ITC is such that
fraudulent utilization and availment of the
same cannot be established on most occasions
without connecting transactions over different
financial years. The purchase could be shown
in one financial year and the supply may be
shown in the next financial year. It is only
when either are found to be fabricated or the
firms are found to be fake that the maze of
transactions can be analysed and established
as being fraudulent or bogus.
47. A solitary availment or utilisation of ITC
in one financial year may actually not be
capable of by itself establishing the pattern of
fraudulent availment or utilisation. It is only
when the series of transactions are analysed,
investigated, and enquired into, and a
consistent pattern is established, that the
fraudulent availment and utilisation of ITC may
be revealed. The language in the
abovementioned provisions, i.e., the word
“period” or “periods” as against “financial year”
or “assessment year” are therefore, significant.
48. The ITC mechanism is one of the salient
features of the GST regime which was
introduced to encourage genuine businesses.
In the words of Shri Pranab Mukherjee, the
then honourable President of India, who
addressed the Nation at the launch of the GST
on July 1, 2017, ITC was highlighted as one of
the core features integral to the framework of
the GST regime. The relevant extract of the
114
said speech of the honourable President is set
out below:
“I am told that a key feature of the system
is that buyers will get credit for tax paid on
inputs only when the seller has actually paid
taxes to the Government. This creates a strong
incentive for buyers to deal with honest and
compliant sellers who pay their dues
promptly.”
49. It is seen that the said feature of ITC
has been misused by large number of
unscrupulous dealers, businesses who have in
fact utilised or availed of ITC through non-
existent supplies/purchases, fake firms and
non-existent entities. The ultimate beneficiary
of the ITC in the most cases may not even be
the persons in whose name the GST
registration is obtained. Businesses,
individuals, and entities have charged
commissions for passing on ITC. In several
cases, it has also been noticed that the
persons in whose name the GST registration
stands are in fact domestic helps, drivers,
employees, etc., of businessmen who are
engaged on salary and who may not even be
aware that their identities are being misused.
50. In fact, Parliamentary questions have
been raised on such fraudulent availment of
ITC. In one such Parliamentary question, it
was revealed as under:
“The press release issued by Ministry of
Finance on January 7, 2024 (annexure 1)
brought out that 29,273 bogus firms involved
in suspected input-tax credit (ITC) evasion of
115Rs 44,015 crores were detected in a sustained
drive against non-existent tax payers by GST
formations across the country since May 2023.
An amount of Rs. 44,015 crores
(Rs. 15,240 crores (State) + Rs. 28,775
crores (Centre)) of fake ITC has been detected
[ Answer by the Minister of State in Ministry of
Finance, Mr. Pankaj Chaudhary to a
questionraised on Monday, February 5, 2024 in
Lok Sabha being unstarred question No.
435titled as ‘Unearthing of fake input-tax
credit’.] ).”
51. On January 7, 2024, vide a press
release issued by the Press Information
Bureau, New Delhi, the Ministry of Finance
brought to light the said large-scale
involvement of fictitious entities in the alleged
evasion of ITC. As per the contents of the said
press release, a total of 29,273 non-genuine
firms have purportedly been found to be
involved in the evasion of ITC amounting to
approximately Rs. 44,015 crores, as unearthed
during a sustained enforcement drive
undertaken by the GST authorities across the
country since May 2023 against non-existent
taxpayers. The relevant portion of the said
release reads as under:
“To curb frauds in Goods and Services Tax
(GST) and increase compliance, the GST
formations, under the Central Board of Indirect
Taxes and Customs (CBIC) and the State/UT
Governments, across the country are carrying
out a focused drive on the issue of non-
existent/bogus registrations and issuance of
116
fake invoices without any underlying supply of
goods and services.
Since the initiation of the special drive
against fake registrations in mid-May 2023, a
total of 29,273 bogus firms involved in
suspected input-tax credit (ITC) evasion of Rs.
44,015 crores have been detected. This has
saved Rs. 4,646 crores of which Rs. 3,802
crores is by blocking of ITC and Rs. 844 crores
is by way of recovery. So far, 121 arrests have
been made in the cases.
In the quarter ending December, 2023,
4,153 bogus firms that involved suspected ITC
evasion of around Rs. 12,036 crore were
detected. 2,358 of these bogus firms were
detected by the Central GST Authorities. This
has protected revenue of Rs. 1,317 crores of
which Rs. 319 crore has been realised and Rs.
997 crore has been protected by blocking ITC.
41 persons were arrested in these cases. 31 of
these arrests were by Central GST Authorities.
State wise details are annexed.”
52. Moreover, a co-ordinate Bench of this
court vide order dated October 3, 2024 in W.P.
(C) No. 13855 of 2024 titled
Vallabh Textile vs. Additional/Joint
Commissioner, CGST, has held as under:
“1. The instant writ petition seeks to assail
the validity of a show-cause notice (‘SCN’)
dated May 29, 2024 and which raises issues
pertaining to financial years (‘FYs’) 2017-2018
to 2021-2022.
2. The principal ground of challenge which
was addressed before us was with respect to
117the action of the respondents who have
proceeded to issue a consolidated notice for
the aforesaid period.
3. On an ex-facie perusal of section 74 of
the Central Goods and Services Tax Act, 2017
(‘CGST’)/Delhi Goods and Services Tax Act,
2017 (‘DGST’), we find ourselves unable to
sustain that challenge in the absence of any
prohibition that may have been statutorily en
grafted in this respect. That in any case would
not constitute a jurisdictional challenge
warranting the writ petition being entertained
against a SCN.
4. Insofar as FY 2017-2018 is concerned, it
was the submission of learned counsel for the
writ petitioner that the same would not sustain
bearing in mind the provisions contained in
section 74(10) of the CGST Act, 2017/DGST
Act, 2017. Insofar as that question is
concerned, we leave it open to the writ
petitioner to initiate appropriate proceedings
independently.
5. Bearing in mind the well-settled
principles which govern situations and
contingencies in which a SCN challenge may be
entertained by a court under article 226 of the
Constitution, we find no ground to entertain
the instant writ petition.
6. It shall, subject to the aforesaid
observation, stand dismissed.”
53. Vide the said decision, the co-ordinate
Bench of this court has clarified the position in
law that a consolidated SCN for multiple years
is permissible under the purview of section 74
118
of the CGST Act, and hence, the said argument
cannot be a ground for entertaining a writ
petition.
54. The present case appears to be one
such case where a substantial amount of ITC is
alleged to have been availed/utilised running
into more than Rs. 83 crores. The petitioner is
alleged to be one of the main entities/persons
involved in the said activity. The transactions
are between the years 2017 to 2021. A
consolidated notice is, therefore, not merely
permissible but, in fact, required in such cases
in order to establish the illegal modality
adopted by such businesses and entities. The
language of the provision itself does not
prevent issuance of SCN or order for multiple
years in a consolidated manner.
55. Even in the order which has been
impugned before this court, the details of the
amounts for each year are set out clearly in
the content of the order itself and is, therefore,
clearly decipherable. Thus, it cannot be held
that the issuance of consolidated notice or
order violates the language of the provisions.
Especially, in the case of fraudulent availment
of ITC or utilisation of ITC such consolidated
notice and order would not just be permissible
but may, in fact, be required to show the wilful
misstatement or suppression or the fraudulent
availment/utilisation.”
119
45. In Mathur Polymers vs. Union of India,
(2026) 154 GSTR 443 / 2025 SCC OnLine Del
6892, the Delhi High Court has held as under:
“22. Thus, this court is of the opinion that in
cases involving allegations of fraudulent
availment of ITC, where the transactions are
spread across several years, a consolidated
notice may in fact be required in such cases in
order to establish the illegal modality adopted
by such businesses and entities. The language
of the legislation, itself, does not prevent
issuance of SCN or order for multiple years in a
consolidated manner.”
46. An identical issue came up for
consideration before the High Court of Judicature at
Allahabad in SA Aromatics (P) Ltd. vs. Union of
India, 2026 SCC OnLine All 191. The Court held as
follows:
“82. To read “tax period not beyond the
Financial Year”, into Sections 73(1) and 74(1)
would be to introduce an artificial restriction in
the scope of Sections 73(1) and 74(1), not on
strength of legislative language, but based on
imagined restriction. In contrast, the
adjudication procedure contemplates decision
on disputes pertaining to specified tax,
120penalty, refund and ITC amounts. The
legislature has specifically authorised the
Proper Officer to, in addition to issuing notices
under Section 73(1)/74(1), issue further
statements with respect to other periods
beyond that specified in the notice itself. Once
that specific provision has been made, there is
no room to introduce the concept of
adjudication proceedings being confined to a
unit of assessment/FY. To do that would be to
do violence to the plain language of Section
73(3)/74(3) and 73(4)/74(4) of the Acts.
Standard rule to be applied in matters of
interpretation of statutes being that every
word used by the legislature be given its full
and natural meaning unless a conflict arises,
we find no occasion to restrict the scope of
Section 73(3)/74(3) and 73(4)/74(4), by
introducing an alien concept of unit of
assessment/FY to adjudication proceedings.
87. Insofar as further objection has been
raised to composite notice being issued to
multiple noticees, adjudication proceedings are
referable to pre-identified and quantified
disputes with respect to non-payment or short
payment of tax, wrongful refund or wrongful
availment or utilization of ITC. The challenge to
the proceedings on the ground of multiple
noticees has arisen (in this batch of petitions),
in adjudication proceedings arising under
Section 74 of the Acts and not under Section
73 of the Acts. As extracted above, the
provisions of Section 74(12) of the Acts are
specific. Clearly, they allow for multiple
noticees to be included in one notice. Upon
that specific inclusion made by the legislature,
121the submission to the contrary carries no
weight. Suffice to note, there is no challenge to
the validity of Section 74(12) of the Acts. Once
the legislature clearly contemplates issuance of
one notice with respect to disputed quantified
demand, there survives no room to consider
that submission, any further.
88. Wherever it may be disputed that
multiple noticees have been wrongly roped in
together, that issue by very nature, would
remain a mixed question of fact and law.
Evidence would have to be led before any firm
conclusion may be drawn, i.e. whether the
dispute is such as may involve more than one
noticee. It may normally be examined during
statutory proceedings.
89. Therefore, while we are not inclined to
accept on principle that a composite notice
may never be issued under Section 74 of the
Acts, we leave that question of validity of
individual notices issued to individual noticees
open to be examined in individual adjudication
proceedings, subject to appropriate objections
being raised. Thus, if any noticee objects that
he is not liable for a disputed transaction
giving rise to the adjudication proceeding or he
has been wrongly included as a noticee, it may
give rise to an objection in that case. That
objection once raised would have to be dealt
with and decided by the Adjudicating Authority
on the own strength of the objection.”
“94. The third issue of limitation to issue a
notice under Section 73 and 74 requires
consideration. As noted above, the provision of
Section 73(10) & 74(10) leave no doubt that
the limitation to pass an adjudication order has
been fixed with reference to the due date for
furnishing annual return for the FY, to which
122the dispute may relate. Thus, if the dispute
sought to be adjudicated pertains to or falls in
‘tax periods’ falling in three different FYs, the
period of limitation to make a composite order
would start running from the due date of
furnishing of annual return for earliest/first FY
(to which any ‘period’ may relate), such that if
that date is crossed, the adjudication
proceedings with respect to that FY would
lapse but not the entire notice if segregation of
the dispute exists, ‘period’ wise. The entire
proceedings initiated by such notice may be
declared time barred only if the limitation to
make the order from the due date of filling
annual return for the last FY (for which dispute
is referred to adjudication), also lapses. In
short, that issue will have to be dealt with, on
individual facts.”
“100. In view of the above conclusion
drawn, the writ petitions must meet mixed
results. While issue of composite notice is
served under Section 74 of the Acts, both for
different tax periods and FYs and also multiple
assesses, is decided against the petitioners;
the other objection based on Section 6(2)(b) of
the Acts; multiple orders arising from a single
notice, and the issue of limitation provision
being mandatory, are decided in favour of the
petitioners such that any notice issued within
six months from the end of the limitation to
make the adjudication order is time barred.
The issue of composite notice, for different FYs
and multiple noticees, is decided against the
petitioners……….”
123
47. The High Court of Jammu & Kashmir and
Ladakh, in New Gee Enn & Sons vs. Union of
India, 2025 SCC OnLine J&K 1180, framed the
question and answered it as under:
“Q. No. 4. Whether the bunching of two
show cause notices pertaining to tax
period with effect from July 2017 to April
2019 which falls in two financial years
i.e., 2017-2018 and 2018-2019 is
permissible under the provisions of CGST
Act, 2017/JKGST Act of 2017?
37. From the reading of entire CGST/JKGST
Act, one would not find any prohibition for
issuing one composite show cause notice for
multiple financial years. Sections 73 and 74
would only require that:
(1) the period of demand must be specified;
(2) show cause notice must be issued within
limitation;
(3) the notice must contain clear grounds,
specific allegations and year wise
quantification;
38. If the aforesaid requirements are met,
there would be no bar in bunching of financial
years, more particularly, when the requirement
of principles of natural justice is adequately
met.
39. We are thus of considered opinion that
the composite show cause notice cannot be
held invalid if there is year-wise breakup of
tax, interest and penalty; the allegations are
not vague; each period is within limitation and
the notice is speaking and detailed one.
124
40. It is only in the cases where the show
cause notice suffers from vagueness or non
specificity, that bunching may be
impermissible. The show cause notice can be
found fault with on the ground of bunching
only in the following circumstance:–
(1) Where there is no year wise
quantification;
(2) Where there are general and vague
allegations like “tax evaded for several years”;
(3) where there is no specific evidence for
each period;
(4) Where the limitation has expired for any
part of the notice;
(5) Where the court finds that clubbing of
notices for two or more financial years has
caused prejudice to the assessee and is in
violation of principles of natural justice.
41. When we examine the show cause
notices issued to the petitioners in the instant
cases, we find that there is year-wise
quantification of the liability and the allegations
are prima facie, cogent and detailed one,
giving fair opportunity to the assesses to
respond and defend themselves. We have also
found that the show cause notices in respect of
both the periods, i.e., Financial Years 2017-
2018 and Financial Year 2018-2019, are not hit
by the limitation prescribed under
Section 74(2) read with Section 74(10) of
the CGST Act, 2017.
42. Viewed thus, it cannot be said that in
the instant case, the bunching of composite
show cause notice issued in respect of tax
periods falling in mentioned year 2017-2018
and mentioned year 2018-2019 is
impermissible and liable to be interfered with.”
125
The above judgments have categorically held that
show cause notice issued under Sections 73 and 74 of
the Act would relate to the period specified in the
show cause notice itself and would not confine to a tax
period or financial year. The above decisions would
aptly support the contentions advanced on behalf of
the appellants/Revenue. The judgments of the High
Courts of Delhi, Allahabad, and Jammu & Kashmir
have considered the issue after a detailed analysis of
the entire scheme of the Act. In the said decisions,
upon examining the statutory framework and
interpreting the plain language of Sections 73/74, it
has been held that issuance of a common show cause
notice covering multiple financial years is permissible.
48. Learned counsel for the
respondents/assesses in support of their contention
that show cause notices issued under Sections 73 and
74 of the Act shall confine to a financial year and
126
cannot be for multiple financial years, relied upon
certain judgments and some of the judgments are
discussed below:
The Bombay High Court, in Milroc Good Earth
Developers vs. Union of India, [(2025) 179
taxmann.com 465 (Bom.)], while referring to the
judgment of the Kerala High Court in Tharayil
Medicals vs. Commissioner, Audit Division-IV,
[(2025) 173 taxmann.com 867 (Kerala)], and
also taking note of the judgment of the Delhi High
Court in Ambika Traders (supra), held that the
action of the respondent No. 2 (proper officer) in
issuing consolidated show cause notices for multiple
financial years was without jurisdiction, and, treating
the same as a case of judicial overreach, quashed the
notices.
The Bombay High Court, in Paras Stone
Industries vs. Union of India, [(2026) 182
127taxmann.com 643 (Bom.)], placing reliance on its
earlier decision in Milroc Good Earth Developers
(supra), reiterated that a consolidated show cause
notice covering multiple financial years is not
maintainable.
Reliance is also placed on the judgment of the
High Court of Himachal Pradesh in Ekta Enterprises
vs. State of Himachal Pradesh, (2026) 38 Centax
303 (H.P.), wherein, following the decision of the
Bombay High Court in Milroc Good Earth
Developers (supra), it was held that a consolidated
show cause notice covering multiple financial years is
not permissible and that separate show cause notices
are required to be issued.
49. The High Court of Madras, in Titan
Company Ltd. vs. The Joint Commissioner of GST
128
and Central Excise, Salem and Others, (2024) 159
taxmann.com 162 (Madras), has held as under:
“13. The main contention of the petitioner
was that bunching of show cause notices was
not allowed in law and it is against the
provisions of Section 73 of the Act. Section
73(10) of the Act specifically provides a time
limit of three years from the due date for
furnishing of annual return for the financial
year to which the tax due relates to. In the
present case, notice was issued under Section
73 of the Act for determination of the tax and
therefore, the limitation period of three years
as prescribed under Section 73(10) would be
applicable. Therefore, the contention of the
respondent that there is no time limit
contemplated under Section 73 of the Act is
not correct.
14. Further, by issuing bunching of show
cause notices for five Assessment Years
starting from 2017-18 to 2021-22, the
respondents are trying to do certain things
indirectly which they are not permitted to do
directly and the same is not permissible in law.
If the law states that a particular action has to
129be completed within a particular year, the
same has to be carried out accordingly. The
limitation period of three years would be
separately applicable for every assessment
year and it would vary from one assessment
year to another. It is not that it would be
carried over or that the limitation would be
continuing in nature and the same can be
clubbed. The limitation period of three years
ends from the date of furnishing of the annual
return for the particular financial year.
15. Therefore, issuing bunching of show
cause notices is against the spirit of provisions
of Section 73 of the Act and the Constitution
Bench of the Hon’ble Apex Court in the
decision reported in. Caltex (India) Ltd‘s case
supra has held that where an assessment
encompasses different assessment years, each
assessment year could be easily split up and
dissected and the items can be separated and
taxed for different periods. The said law was
laid down keeping in mind that each and every
Assessment Year will have a separate period of
limitation and the limitation will start
independently and that is the reason why the
Hon’ble Supreme Court has held that each
130assessment year could be easily split up and
dissected and the items can be separated and
taxed for different periods. The said principle
would apply to the present case as well.”
50. The High Court of Kerala, in Tharayil
Medicals vs. Commissioner, Audit Division-IV,
[(2025) 173 taxmann.com 867 (Kerala)/ 2025
SCC OnLine Ker 2334], has held as under:
“11. When we read sub-sections (9) and (10)
of section 74, which specifically refer to
“financial year to which the tax not paid or
short paid or input tax wrongly availed or
utilised relates” while passing the final order of
adjudication, it presupposes that independent
show-cause notice be issued to the assessee
for each different years of assessment while
proceeding under section 74. We are
constrained to hold so because, as we noted
earlier, the assessee can raise a distinct and
independent defence to the show-cause notice
issued in respect of different assessment
years. In other words, the entitlement to
proceed and assess each year being separate
and distinct, and further the time-limit being
131prescribed under the Statute for each
assessment year being distinct, we see no
reason as to why we should not hold that
separate show-cause notices are required
before proceeding to assess the assessee for
different years of assessment under section
74.
12. There is yet another reason why we
should hold that separate show-cause notices
are issued for different assessment years.
There may be cases where proceedings are
initiated in the guise of a show-cause notice
under section 74 wherein, on facts, the case of
the assessee will fall under section 73 of the
CGST/SGST Act. We find that insofar as the
time-limit prescribed under section 73(10) of
the CGST/SGST Act is concerned, it is three
years instead of five years and further, the
aspect of fraud, wilful misstatement and
suppression do not arise for consideration in
proceedings under section 73. Thus, by issuing
a composite notice, the assessing authority,
cannot bypass the mandatory requirement of
section 73 to complete the assessment by
falling back on a larger period of limitation
under sub-section (10) of section 74. If such a
132recourse is permitted, then certainly the said
action would be a colourable exercise of the
power conferred by the statute and will offend
express provisions of the CGST/SGST Act qua
limitation. This reason would also prompt us to
hold that in cases where the assessing officer
finds that an assessee is liable to be proceeded
either under section 73 or under section 74 for
different assessment years, a separate show-
cause notice has to be issued. Still further,
since proper officer need to issue a show-cause
notice prior to six months to the time-limit
prescribed under sub-section (10) of section
74, if a composite notice is issued, the
assessee will be prejudiced inasmuch as the
availability of a lesser period to submit a
proper and meaningful explanation. This also is
a strong indicative factor which would prompt
us to hold in favour of the assessee.”
51. The High Court of Andhra Pradesh, in S.J.
Constructions vs. Commissioner, 2025 SCC
OnLine AP 3334 / (2025) 178 taxmann.com 570
(Andhra Pradesh), has held as under:
133
“13. The scheme of the Act, is that GST is
payable on supplies of goods and services, at
the rates fixed under the schedules and
notifications that would be issued by the GST
Council. This GST is assessed and calculated as
per the provisions set out in the Act. The
provisions under Section 62 providing
assessment of non-filers of returns and Section
63 providing assessment of unregistered
persons etc., can be ignored for the purpose of
this case. The primary provisions for
determination of tax are Sections 73 and 74.
14. Section 73 is applicable where tax has
not been determined and paid properly, for
reasons other than fraud or willful-
misstatement or suppression of facts. Section
74 applies to determination of tax where such
tax has not been properly determined or tax
not paid or calculated on account of fraud,
willful-misstatement or suppression of facts.
Both these provisions envisage issuance of
notice to the registered person for bringing to
his attention, the view of the competent
authority that appropriate tax has not been
disclosed and paid.
134
15. The question that has now arisen is
whether such a notice has to be given only in
relation to specified period or whether such a
notice can be given for any period. The further
question would be whether one order of
assessment/penalty has to be passed for each
specified period or whether it can be issued, in
relation to any period.
16. For this purpose, Section 73(3) and (4)
are relevant. Under Section 73(3) the notice
that has to be issued can be for “any period”.
The Hon’ble High Court of Delhi, in the
aforesaid judgment, had held that the term
“any period” cannot be restricted to a specified
period but would mean any length of period.
The Hon’ble High Court at Madras had taken
the opposite view. The Hon’ble High Court at
Madras held that while the term “any period”
has been used in Section 73(3), the language
in Section 73(4) is “such tax periods”. The
Hon’ble High court at Madras then went into
the definition of tax period as specified in
Section 2(106) to mean that a period for which
a return is to be filed. Since return, as defined
in Section 2(97) is a return for a month or a
year, the Hon’ble High Court at Madras had
135come to the conclusion that the term “any
period” would have to be understood, in the
light of the use of the term “such tax periods”
in Section 73(4) and consequently “any period”
would have to be understood to be a tax
period. We would respectfully follow the view
taken by the Hon’ble High Court at Madras, in
as much as, the effect of Section 73(4) and
Section 73(3) had not been brought to the
notice of the Hon’ble High Court of Delhi. With
all due respect, the interpretation, of the
interplay between Section 73(3) and Section
73(4), placed by the Hon’ble High Court at
Madras appears to be the correct
interpretation.
17. Section 74(3) is in parimateria with
Section 73(3). However, subsection (4) of
Section 74 does not contain the term “such tax
period”. This non mention would not, in our
opinion, make any difference to the aforesaid
interpretation. Apart from this, there are
certain other provisions, which would also have
to be considered. Any interpretation of an Act
should not result in some of the other
provisions becoming otiose or reduced in
scope. As rightly pointed out by the Hon’ble
136High Court at Madras, the right of a registered
person to obtain benefit under Section 128 of
APGST Act as well as the right to invoke the
remedy of appeal against the orders of
assessment either under Section 73 or under
Section 74 would get impacted if a common
order is permitted to be issued in relation to
more than one assessment/financial year.
18. In the circumstances, we are of the
opinion that a single show cause notice or a
single composite assessment order cannot be
passed in relation to more than one tax period
of either a month if the assessment is taken up
before the due date for filing of the annual
return or for more than one year if the due
date for filing of annual return has been
reached.”
52. The Kerala High Court in Tharayil
Medicals (supra), while deciding the issue, has
primarily proceeded on the basis of the reference to
“financial year” in sub-section (10) of Sections 73/74,
to conclude that a show cause notice covering multiple
financial years is not permissible. However, the said
137
judgment does not examine the entire scheme of the
Act, nor does it analyse the scope and ambit of
Sections 73/74 in their proper context. As observed
hereinabove, the effect of sub-section (3) of Sections
73/74, which enables extension of the period covered
by the show cause notice beyond the initial period,
has not been considered. In our view, the
interpretation adopted by the Kerala High Court
results in effectively rewriting the statutory provision
and renders certain parts of the provision otiose,
leading to unintended anomalies.
53. The Bombay High Court has followed the
view taken by the Kerala High Court in Tharayil
Medicals (supra). Similarly, the Madras High Court,
placing primary reliance on sub-section (10) of
Sections 73/74 of the Act, has concluded that a show
cause notice covering multiple financial years is not
permissible. The reasoning adopted by the Madras
138
High Court is substantially similar to that of the Kerala
High Court.
54. Further, the Division Bench of the Bombay
High Court in M/s.Rollmet LLP V. Union of India,
Writ Petition No.16848 of 2025 and connected
matters, by order dated 17.04.2026, has expressed
doubt regarding the view taken by the earlier Division
Bench of the Bombay High Court in Milroc Good
Earth Developers (supra) and has referred the
matter to a larger Bench.
55. The High Court of Andhra Pradesh, without
examining the scheme of the Act in its entirety, has
proceeded to hold that the expression “tax period” in
Section 73 is to be construed as referring to a single
tax period.
56. The High Court of Himachal Pradesh has
followed the judgment of the Bombay High Court in
139
Milroc Good Earth Developers (supra). In that view
of the matter, no further discussion is required.
57. For the foregoing discussion and the
reasons assigned while analyzing the scheme of the
Act, we conclude that show cause notices issued
under Sections 73/74 do not prohibit coverage of
multiple financial years. Such notices are neither tax
period-specific nor financial year-specific. There is no
statutory bar to issuance of a common show cause
notice covering multiple tax periods or financial years.
Any interpretation to the contrary would amount to
rewriting the language of Sections 73/74, which is
impermissible.
58. In the light of the reasons assigned
hereinabove, we find ourselves in agreement with the
views expressed by the High Courts of Delhi,
140
Allahabad, and Jammu & Kashmir. Accordingly, we
concur with the view taken by the said High Courts.
59. For the reasons assigned hereinabove, we
are not inclined to concur with the view taken by the
High Courts of Bombay, Kerala, Madras, Andhra
Pradesh, and Himachal Pradesh. Accordingly, we
respectfully decline to follow the said judgments.
60. Learned Single Judge in the impugned
order held that common/consolidated show cause
notice and the period covering beyond financial year is
not permissible. Such finding is arrived by following
the judgment of the Madras High Court in Titan
Company Limited and also on interpreting Section
73(10) of the Act.
61. In view of the findings recorded
hereinabove, the conclusion reached by learned Single
Judge is contrary to scheme of the Act resulting in re-
141
writing of the provisions, which is not permissible.
The order of learned Single Judge is not sustainable
and is to be set aside.
62. In W.A.No.1590/2014, the respondents
challenged the show cause notice issued under
Section 74 of the Act as well as the Order-in-Original
dated 21.11.2023. The learned Single Judge quashed
the show cause notice issued under Section 74 of the
Act on the ground that issuance of a common show
cause notice for multiple financial years is not
permissible. In light of the findings recorded
hereinabove, we hold that issuance of a
consolidated/common show cause notice for multiple
financial years is permissible. However, the
respondent should not be rendered remediless in
respect of the Order-in-Original dated 21.11.2023.
Though a statutory remedy of appeal is available, the
scope for condonation of delay by the appellate
142
authority is limited, particularly having regard to the
period during which the writ petition remained
pending.
63. Therefore, while setting aside the order of
the learned Single Judge and relegating the
respondent to avail the remedy of appeal against the
Order-in-Original, we deem it appropriate to grant six
weeks time to the respondent to prefer such appeal. If
the appeal is filed within the time granted
hereinabove, the appellate authority shall not raise
the issue of limitation and shall consider the same on
merits.
64. In W.A.No.495/2026 as well, the
respondent challenged the show cause notice issued
under Section 74 as well as the Order-in-Original
dated 16.12.2024. The learned Single Judge, under
the impugned order, while setting aside the show
143
cause notice, also set aside the Order-in-Original. The
show cause notice was set aside on the ground that
issuance of a consolidated/common show cause notice
covering multiple financial years is impermissible. In
light of the finding recorded above, we hold that
issuance of a consolidated/common show cause notice
for multiple financial years is permissible.
Consequently, the show cause notice as well as the
Order-in-Original are restored.
65. Since the period of limitation for filing an
appeal against the Order-in-Original dated 16.12.2024
has expired, and having regard to the limited power
vested in the appellate authority to condone the delay,
coupled with the fact that the respondent had been
diligently pursuing the remedy by way of writ petition,
we deem it appropriate, while relegating the
respondent to the statutory remedy of appeal, to
grant six weeks’ time to file such appeal. If such
144
appeal is filed within the time granted hereinabove,
the appellate authority shall consider the same on
merits without raising the plea of limitation.
66. In the light of the above, the following;
ORDER
(i) The Writ appeals are allowed.
(ii) The impugned orders passed in
W.P.No.26164/2024, dated
30.09.2024; W.P.No.15810/2024,
dated 04.09.2024;
W.P.No.23731/2024, dated
14.11.2024; W.P.No.33081/2025,
dated 11.12.2025, W.P.No.7470/2025,
dated 17.12.2025 and
W.P.No.27928/2024 dated 19.12.2025
are hereby set aside.
145
(iii) The writ petitions are hereby
dismissed.
(iv) The show cause notices issued under
Section 73/74 of the Act are hereby
restored.
(v) The respondents in
W.A.No.1751/2024, W.A.No.7/2025,
W.A.No.407/2026 and
W.A.No.555/2026 are granted 4
weeks’ time from the date of receipt
of copy of this order to reply to the
show cause notices. Contentions of
the parties insofar as merits
are concerned are left open.
(vi) In W.A.No.1590/2024 and
W.A.No.495/2026, the respondents
are at liberty to file an appeal before
146
the appellate authority within six
weeks from the date of receipt of a
copy of this order. If such appeal is
filed within the time granted by this
Court, the appellate authority is
directed to consider the same on
merits without raising the plea of
limitation.
(vii) Needless to observe that the proper
officer is at liberty to adjudicate the
show cause notice after due
opportunity is provided to the
respondent.
(viii) Any observations made in this order
are confined to the issue under
consideration and shall not be
147
construed as an expression on the
merits of the case.
(ix) Costs made easy.
We place on the record our appreciation for the
able assistance rendered by Sriyuths Damodar M.
Nayak and Amaregouda Kellur, Research Assistants,
and Sri Harshith A., Law Intern.
Sd/-
(S.G.PANDIT)
JUDGE
Sd/-
(K.V.ARAVIND)
JUDGE
MV/NC
CT: bms
