Bombay High Court
Twinstar Industries Limited vs Union Of India on 17 April, 2026
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
2026:BHC-OS:9682-DB WP 16848-25 & ORS.DOC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 16848 OF 2025
M/s. Rollmet LLP ...Petitioner
Versus
1) The Union of India
2) Central Board of Indirect Tax and Customs
3) Office of the Commissioner of CGST Palghar
4) Office of the Joint Commissioner of State Tax ...Respondents
WITH
WRIT PETITION NO. 1495 OF 2026
1) Shemaroo Entertainment Limited ...Petitioner
Versus
1) The Union of India
2) Central Board of Indirect Tax and Customs
3) The Superintendent CGST CX,
4) Additional Commissioner CGST Central Excise,
5) Principal Commissioner of CGST and CX, Mumbai East
6) Commissioner (Appeals II) of CGST and CX Mumbai ...Respondents
WITH
WRIT PETITION NO. 1698 OF 2026
Uttam Movies ...Petitioner
Versus
1) The Union of India
2) Joint Commissioner CGST Excise,
3) Principal Commissioner of CGST and CX, Mumbai East
4) Commissioner (Appeals II) of CGST and CX Mumbai ...Respondents
WITH
WRIT PETITION NO. 1122 OF 2026
Everest Fleet Private Limited ...Petitioner
Versus
1) The Union of India
2) The State of Maharashtra
3) The Director General of GST Intelligence Mumbai
4) The Additional Commissioner Central Tax Palghar
Commissionerate
5) The Additional Commissioner of CGST and Central
Excise Mumbai Central Commissionerate ...Respondents
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WITH
WRIT PETITION NO. 1847 OF 2026
1) M/S. Golden Bullion
2) Jakin Mahendra Kothari ...Petitioner
Versus
1) Union Of India and Ors Thro. Centra Govt.
2) Additional Commissioner of Central Cgst and Cex,
Mumbai South Commissionerate
3) Joint Commissioner of Central Cgst and Cex,
Mumbai South Commissionerate ...Respondents
WITH
WRIT PETITION NO. 1117 OF 2026
1) M/S. Golden Bullion
2) Jakir Mahendra Kothari ...Petitioner
Versus
1) Union Of India and Ors Thro. Centra Govt.
2) Additional Commissioner of Central Cgst and Cex,
Mumbai South Commissionerate
3) Joint Commissioner of Central Cgst and Cex,
Mumbai South Commissionerate ...Respondents
WITH
WRIT PETITION NO. 2127 OF 2026
Ms JDS Motion Pictures ...Petitioner
Versus
1) Union Of India
2) Joint Commissioner of CGST &Central Excise
3) Principal Commissioner of CGST and CX, Mumbai East
4) Commissioner Appeals II of CGST and CX, Mumbai ...Respondents
WITH
WRIT PETITION NO. 2140 OF 2026
J.V.Media Solutions ...Petitioner
Versus
1) The Union of India
2) Joint Commissioner of CGST &Central Excise
3) Commissioner (Appeals)of CGST and CX, Mumbai ...Respondents
WITH
WRIT PETITION NO. 2202 OF 2026
Ms. Mangal Entertainment ...Petitioner
Versus
1) The Union of India
2) Joint Commissioner of CGST &Central Excise
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3) Principal Commissioner of CGST and CX,
4) Commissioner (Appeals)of CGST and CX, Mumbai ...Respondents
WITH
WRIT PETITION NO. 3388 OF 2026
1) CD Safety and Security Services LLP ...Petitioner
Versus
1) The Union of India
2) State of Maharashtra
3) Joint Commissioner of CGST &Central Excise
4) Principal Chief Commissioner of CGST and Central Excise,
5) Commissioner of CGST and Central Excise,
5) Commissioner of CGST and Central Excise
6) Superintendent Anti Evasion Office of Commissioner CGST
and Central Excise Belapur Commissionerate ...Respondents
WITH
WRIT PETITION NO. 2031 OF 2026
1) CTL Logistics India Private Limited
2) Commissioner, CGST and C Ex, Belapur ...Petitioner
Versus
1) The Union of India
2) Joint Commissioner of CGST &Central Ex Belapur
3) State of Maharashtra ...Respondents
WITH
WRIT PETITION NO. 6359 OF 2025
1) Mahavir Polyfilms Pvt. Ltd. ...Petitioner
Versus
1) The Union of India
2) Commissioner Of CGST &Central Excise
(Appeals -II) ...Respondents
WITH
WRIT PETITION NO. 6902 OF 2025
1) Renault India Pvt. Ltd. ...Petitioner
Versus
1) Union Of India
2) Joint Commissioner Central Goods and Services Tax Pune 1
3) Joint Commissioner Central Goods and Services Tax GST
Audit 1 Pune
4) State of Maharashtra
5) Central Board of Indirect Taxes and Customs ...Respondents
WITH
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WRIT PETITION NO. 17159 OF 2025
1) TIPL JMMIPL JV Pvt Ltd ...Petitioner
Versus
1) Union of India Through the Revenue Secretary)
2) State of Maharashtra
3) Central Board of Indirect Taxes and Customs
4) Additional Commissioner CGST and C Ex, Raigad
5) Additional Director, DGGI, Zonal Unit, Mumbai ...Respondents
WITH
WRIT PETITION NO. 10267 OF 2025
1) State Bank of India Through its Authorized
Signatory Debabrata Bhowmick ...Petitioner
Versus
1) Union of India Through the Revenue Secretary)
2) State of Maharashtra
3) Additional Commissioner of Central GST and Central Excise
4) Joint Director, DGGI ...Respondents
WITH
WRIT PETITION NO. 10274 OF 2025
1) State Bank of India Through its Authorized
Signatory Debabrata Bhowmick ...Petitioner
Versus
1) Union of India Through the Secretary Department of Revenue
2) State of Maharashtra
3) Additional Director, DGGI Lucknow Zonal Unit, 1
4) Additional Commissioner of Central GST and Central Excise
5) Additional Commissioner of Central GST and Central Excise
...Respondents
WITH
WRIT PETITION NO. 18618 OF 2025
1) Safe Climbers ...Petitioner
Versus
1) Union of India Through the Revenue Secretary)
2) State of Maharashtra
3) Joint Commissioner CGST and Central Excise Thane Rural
Commissionerate ...Respondents
WITH
WRIT PETITION NO. 2017 OF 2026
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1) Safe Climbers ...Petitioner
Versus
1) The Additional Commissioner CGST and Central Excise, Nashik
2) Commissioner CGST and Central Excise, Nashik,
3) State of Maharashtra
4) The Union of India ...Respondents
WITH
WRIT PETITION NO. 14606 OF 2025
1) Prabodhan Bahu Uddeshiya Sanstha
2) Sunil Narayan Patil ...Petitioners
Versus
1) The Additional Commissioner Cgst and Central Excise and Ors
2) Commissioner CGST and Central Excise Nashik
3) State Of Maharashtra Through the Secretary Ministry
Of Finance Department of Revenue
4) The Union of India Through the Secretary Ministry
Of Finance Government of India ...Respondents
WITH
WRIT PETITION NO. 16077 OF 2025
1) Vishal Maruti Jadhav ...Petitioners
Versus
1) The Union of India
2) The Commissioner, CGST and CX
3) The Joint Commissioner, CGST and CX
4) State of Maharashtra ...Respondents
WITH
WRIT PETITION NO. 15750 OF 2025
1) Ms Oshmedics Healthcare LLP ...Petitioners
Versus
1) The Union of India
2) The Commissioner, CGST and CX
3) The Joint Commissioner, CGST and CX
4) State of Maharashtra ...Respondents
WITH
WRIT PETITION NO. 17765 OF 2025
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1) Avisha Exim ...Petitioner
Versus
1) The Union of India
2) Assistant Commissioner Mumbai
South Commissionerate ...Respondents
WITH
WRIT PETITION NO. 779 OF 2026
1) Visen Industries Limited ...Petitioner
Versus
1) Union Of India
2) The Commissioner of CGST Palghar Commissionerate
3) The Additional Commissioner CGST and C Ex Palghar
Commissionerate
4) The Superintendent Anti Evasion CGST and CX Palghar
Commissionerate
5) The State of Maharashtra ...Respondents
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 246 OF 2026
Sheth Creaters Sun Vision Pvt. Ltd. ...Petitioner
Versus
1) The Union of India
2) The Commissioner of CGST Mumbai West Commissionerate
3) The Joint Commissioner of CGST, Mumbai West Commissionerate
4) The Joint Commissioner Audit III CGST Mumbai
5) The State of Maharashtra ...Respondents
WITH
WRIT PETITION NO. 1878 OF 2025
Kala Daulat Mehta ...Petitioner
Versus
1) The Union of India
2) Additional Director DGGI
3) Additional Commissioner CGST ...Respondents
WITH
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WRIT PETITION NO. 1659 OF 2025
Boostmetric Solutions Limited ...Petitioner
Versus
1) The Union of India
2) Additional Director DGGI
3) Additional Commissioner CGST ...Respondents
WITH
WRIT PETITION NO. 1658 OF 2025
Twinstar Industries Limited ...Petitioner
Versus
1) The Union of India
2) Additional Director, DGGI
3) Additional Commissioner CGST ...Respondents
WITH
WRIT PETITION NO. 1656 OF 2025
Originet Technologies Limited ...Petitioner
Versus
1) The Union of India
2) Additional Director DGGI
3) Additional Commissioner CGST ...Respondents
WITH
WRIT PETITION (L) NO. 11901 OF 2025
Stuti Comtrade Private Limited ...Petitioner
Versus
1) The Union of India
2) Additional Director DGGI
3) Additional Commissioner CGST ...Respondents
WITH
WRIT PETITION (L)NO. 12468 OF 2025
Min Chem India ...Petitioner
Versus
1) The Union of India
2) State of Maharashtra
3) Additional Commissioner CGST and Cex
4) Joint Commissioner, CGST and C Ex ...Respondents
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WITH
WRIT PETITION NO. 4002 OF 2025
Maharashtra Housing and Area Development
Authority ...Petitioner
Versus
1) The Union of India
2) State of Maharashtra
3) Central Board of Indirect Taxes and Customs
4) Joint Commissioner CGST and CEx ...Respondents
WITH
WRIT PETITION (L) NO. 14256 OF 2025
Jeena And Company ...Petitioner
Versus
1) The Union of India
2) State of Maharashtra
3) Joint Commissioner CGST and CX, Mumbai East
4) Additional Commissioner of Central GST and Central Excise
5) Deputy Commissioner
6) Superintendent Range Ill Division Ill CGST and CX ...Respondents
WITH
WRIT PETITION (L) NO. 13604 OF 2025
State Bank of India ...Petitioner
Versus
1) The Union of India
2) State of Maharashtra
3) Additional Commissioner CGST and C EX,
Palghar Commissionerate
4) Joint Director, DGGI, Vishakhapatnam Zonal Unit ...Respondents
WITH
WRIT PETITION NO. 2021 OF 2025
HHM Shipping India Pvt. ...Petitioner
Versus
1) The Union of India
2) The Additional Commissioner, CGST and Central Excise,
Audit II, Mumbai ...Respondents
WITH
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WRIT PETITION NO. 2608 OF 2025
Neelkanth Mansions & Infrastructure Pvt. Ltd. ...Petitioner
Versus
1) The Union of India
2) State of Maharashtra
3) The Assistant Commissioner Circle D, GST Audit II
4) The Superintendent of CGST Group 14,
5) The Additional Commissioner CGST Audit II
Mumbai ...Respondents
WITH
WRIT PETITION (L) NO. 20775 OF 2025
Sumangal Press Pvt. Ltd. ...Petitioner
Versus
1. The Union of India
2. State of Maharashtra
3. Additional Director DGGI Zonal Unit Pune.
4. Asst.Commissioner of State Tax
5. Commissioner of Customs ...Respondents
WITH
WRIT PETITION NO. 3352 OF 2025
Creative Business Associates ...Petitioner
Versus
1. The Union of India
2. Addl Commissioner CGST
Mumbai Central (Div.VII) ...Respondents
WITH
WRIT PETITION NO. 3755 OF 2025
GIA India Laboratory Pvt. Ltd. ...Petitioner
Versus
1. The Union of India
2. Addl Commissioner CGST C Ex.Audit -II Mumbai.
3. Joint /Addl.Commissioner CGST & C Ex. Mumbai East
Commissionerate
4. Commissioner of CGST & C Ex. Mumbai East ...Respondents
WITH
WRIT PETITION NO. 4894 OF 2024
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Fidesta Logistics Pvt. Ltd. ...Petitioner
Versus
1. The Union of India
2. State of Maharashtra
3. Addl Commissioner of Central GST
& Central Excise ...Respondents
WITH
WRIT PETITION NO. 4279 OF 2025
Runwal Enterprises Ltd. ...Petitioner
Versus
1. The Union of India
2. The Commissioner of Central GST & C Ex. Mumbai East
Commissionerate
3. Addl. Commissioner of Central GST & C X Mumbai East
Commissionerate
4. Addl. Commissioner of Central GST & C X Mumbai East
Commissionerate
5. Addl. Commissioner of Central GST & C X Audit II
Commissionerate Mumbai
6. Municipal Commissioner, Municipal Corporation
of GR.Mumbai
7. State of Maharashtra ...Respondents
WITH
WRIT PETITION (L)NO. 36297 OF 2025
Oasis Realty ...Petitioner
Versus
1. The Union of India
2. State of Maharashtra
3. The Commissioner (Appeals- II)
4. The Pr. Commissioner CGST & Central Excise
5. Joint Commissioner CGST & Central Excise
6. The Asst. Commissioner Div. VII CGST & CX
7. The Addl. Director Directorate General of GST Intelligence
8. The Commissioner Office of the Commissioner
CGST and Central Excise ..Respondents
WITH
WRIT PETITION NO. 5271 OF 2025
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Parinee Realty Pvt.Ltd. ...Petitioner
Versus
1. The Union of India
2. The Commissioner of Central GST
3. Joint Commissioner of Central GST ...Respondents
WITH
WRIT PETITION NO. 4279 OF 2025
Runwal Enterprises Ltd. ...Petitioner
Versus
1. The Union of India
2. The Commissioner of Central GST& C Ex. Mumbai East
Commissionerate
3. Addl. Commissioner of Central GST & C X Mumbai East
Commissionerate
4. Addl. Commissioner of Central GST
& C X Mumbai East Commissionerate ...Respondents
----------------
Mr. Arshad Hidayatullah, Senior Advocate with Ms. Shailaja Kher Hidayatullah,
Mr. Makarand Joshi, Ms. Chandni Tanna and Mr. Prathamesh Chavan i/b. India
Law Alliance for the Petitioner in WP/11701/2024
Mr. Abhishek A. Rastogi aw Ms. Pooja M. Rastogi aw Ms. Minal Songire aw
Ms.Aarya More for the Petitioner in WP/16848/2025, WP(ST)/1495/2026,
WP(ST)/1698/2026, WP(ST)/2127/2026, WP(ST)/2140/2026,
WP(ST)/2202/2026,
Mr. Prakash Shah, Senior Advocate aw Mr. Mihir Mehta aw Mr. Mohit Raval aw
Mr. Jas Sanghavi aw Mr. Vikas Poojary i/b PDS Legal for the Petitioner in
WP/15750/2025, WP/1122/2026, WP/779/2026, WP/16077/2025
Mr. Bharat Raichandani aw Ms. Bhagrati Sahu i/b UBR Legal Advocates for teh
Petitioner in WP(ST)/3388/2026 aw WP/2031/2026 aw WP/17159/2025 aw
WP/10267/2025 aw WP/10274/2025 aw WP(ST)/18618/2025
Mr. Brijesh Pathak aw Ms. Anjali Joshi for the Petitioner in WP(ST)/1847/2026,
WP/1117/2026, WP/6359/2025, WP/17765/2025
Mr. Mahir Chablani aw Mr. Prathamesh Gargate for the Petitioner in
WP/6902/2025
Mr. Keval Shailesh Shah for the Petitioner in WP/2017/2026, WP/14606/2025
Mr. Karan Adik aw Mr. Suman Kumar Das for Respondent in WP/16848/2025
Mr. Karan Adik aw Ms. Niyati Mankad aw Ms. Priyanka Singh for the Respondent
in WP(ST)/1847/2026, WP/1117/2026
Mr. Subir Kumar aw Mr. Sangeeta Yadav aw Mr. Niyanta Trivedi aw Ms. Diksha
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Pandey for the Respondent Nos.1 to 4 in WP/779/2026
Mr. Subir Kumar aw Ms. Mamta Omle aw Ms. Niyanta Trivedi aw Ms. Diksha
Pandey for Respondents Nos.1,2 & 4 in WP/1122/2026
Mr. Jitendra B. Mishra aw Ms. Sangeeta Yadav for Resp No.3 in WP/1122/2026
Mr. Jitendra B. Mishra aw Mr. S.D. Deshpande aw Mr. Rupesh Dubey for
Respondent No.5 in WP/1122/2026
Mr. Ram Ochani aw Ms. Sangeeta Yadav for Respondent in WP(ST)/1495/2026,
WP(ST)/1698/2026, WP(ST)/2127/2026, WP(ST)/2140/2026,
WP(ST)/2202/2026, WP/10267/2025, WP/10274/2025
Mr. Ram Ochani aw Mr. Harshad Shingnapurkar for Respondent Nos.2,3,4,5 in
WP/17159/2025
Ms. Sangeeta Yadav for Respondent No.1/ UOI in WP/6359/2025
Ms. Maya Majumdar aw Ms. Miyati Mankad for Respondent in WP/15750/2025,
WP/16077/2025
Ms. Maya Majumdar aw Mr. Abhishek Mishra for Respondent Nos.1 & 2 in
WP/17765/2025
Ms. S.D.Vyas, Addl. G.P. aw Ms. D.S. Deshmukh, AGP aw Ms. Savita A.
Prabhune, AGP aw Mr. Aditya R. Deolekar, AGP for the State
Mr. Prasad Paranjape a/w. Mr. Kumar Harshvardhan, Ms. Nidhi Doshi i/b.
Lumiere Law Partners, for the Petitoner In WP/5271/2025.
Mr. Prakash Shah Senior Advocate, Mr. Jas Sanghavi, Mr. Mihir Mehta , Mr.
Mohit Raval, Mr. Vikas Poapary, Mr. Kshitij Vishwanath i/b. PDS Legal, for the
Petitioner In WP/246/2026 & WP/4279/2025.
Mr. Prasad Paranjape a/w Mr. Kevin Gogri, Ms. Sonakshi Singh i/b. Lumiere Law
Partners, for the Petitioner In WP/3755/2025.
Mr. Darius Shroff Senior Advocate a/w. Mr. Mayank Jain, Ms. Sakshi Upadhyaya,
Mr. Marmik Kamdar, i/b. Khaitan & Co., for the Petitioner In WP/2021/2025.
Mr. Bharat Raichandani a/w Mr. Bhagirati Sahu i/by UBR Legal Advocates in
WPL/12468/2025, WP/4002/2025, WPL/14256/2025, WPL/13604/2025,
WP/2608/2025, WPL/20775/2025, WP/4894/2024, WPL/36297/2025.
Mr. Brijesh Pathak a/w. Ms. Anjali Joshi, for the Petitioner In WP/1878/2025,
WP/1659/2025, WP/1658/2025, WP(L)/11901/2025, WP/1656/2025.
Ms. Deepali Kamble a/w Mr. Gaurav Mhatre for the Petitioner In WP/3352/2025.
Ms. Maya Majumdar, a/w. Mr. Suman Kumar Das, for the Respondent In
WP/2021/2025.
Mr. Karan Adik a/w Mr. Suman Kumar Das for the Respondent in
WP/16848/2025.
Mr. Siddhartha Chandrashekar a/w Mr. Suman Kumar Das, for the Respondent In
WP/1878/2025, WP / 1656 / 2025, WP/1659/2025, WP/1658/2025, &
WP(L)/11901/2025.
Mr. Ram Ochani a/w. Ms. Sangeeta Yadav, for the Respondent In
WP(L)/13604/2025.
Mr. Jitendra B. Mishra a/w. Mr. Abhishek Mishra, Mr. Rupesh Dubey, for the
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Respondent No. 1 & 5 In WP(L)/20775/2025.
Mr. Jitendra B. Mishra a/w. Ms. Megha S Bajoria, Mr. Rupesh Dubey, for the
Respondent No. 1,2,3 & 4 In WP/246/2026.
Mr. Jitendra B. Mishra a/w. Ms. Niyati Mankad, Mr. Rupesh Dubey, for the
Respondent No. 4,5 & 6 In WP(L)/36297/2025.
Ms. Jyoti Chavan, Addl GP, for State of Maharashtra In WP/4002/2025,
WP(L)/13604/2025, WP/2608/2025, WPL/20775/2025 , WP/4894/2024,
WP/4279/2025 & WP(L)/36297/2025.
Mr. Amar Mishra, AGP, for State of Maharashtra In WP/246/2026 &
WP(L)/12468/2025.
Mr. Himanshu Takke AGP, for State of Maharashtra In WP/1657/2025, &
WP(L)/14256/2025.
Ms. Shruti Vyas a/w Ms. Niyati Mankad , for the Respondent No. 2 & 4 In
WP/3755/2025.
Mr. Subir Kumar a/w. Ms. Niyanta Trivedi, Ms. Diksha Pandey, for the
Respondent In WP/3352/2025.
Mr. Saket R. Ketkar for Respondent No. 2, 3 & 4 in WP/4279/2025.
------------------
CORAM: G. S. KULKARNI &
AARTI SATHE, JJ.
DATE: 17 APRIL 2026
P. C.:
1. In this batch of petitions the primary issue raised by the petitioners relates
to the issuance of a single consolidated show-cause notice under Section(s) 73/74
of the Central Goods and Services Tax Act, 2017 (for short, the "CGST ACT")
bunching multiple financial years. It is the Petitioners' contention that the same is
against the mandate of Section 73(10) and 74(10) of the CGST Act, inasmuch as
according to the Petitioners, the statutory scheme requires period-wise self-
assessment and a year-wise limitation, thereby rendering a composite show-cause
notice without jurisdiction.
2. The Petitioners have contended that a co-ordinate Bench of this Court at
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Goa, in the case of Milroc Good Earth Developers vs. Union of India 1 (for short
'Milroc') has held that there is no provision in the CGST Act to club various tax
periods in issuance of a show cause notice, hence, a consolidated show cause notice
issued to the petitioners by clubbing the different periods/financial years, was held
to be invalid and without jurisdiction. It is hence contended that the impugned
notices deserve to be quashed and set aside. It is contended by the petitioners that,
such view of the Division Bench in Milroc is followed by a co-ordinate Bench of
this Court at Nagpur, in the case of M/s Paras Stone Industries Vs. Union of India
& Ors2, and Rite water solutions (India) Ltd. Vs. Joint Commissioner, CGST &
Central Excise, Nagpur and Ors3. The learned counsel for the Petitioners would
submit that a similar view is taken by the Kerala, Madras and Karnataka High
Courts. In this context, reference is made to the decisions in Titan Company Ltd.
vs. JC, GST & Central Excise 4; Bangalore Golf Club vs. AC, Commercial Taxes 5;
Veremax Technologies vs. AC, Central Tax Bengaluru 6; UNO Minda vs. Joint
Commissioner of GST & Central Excise 7; Chimney Hills Education Society vs.
AC, Central Tax8; Gopi Chand vs. DC, Commercial Taxes (Audit)-1 9; Lakshmi
Mobiles vs. Joint Commissioner10; Joint Commissioner vs. Laxmi Mobile 11; X.L
Interiors vs. DC (Intelligence), SGST Department, Ernakulam 12; Tharayil Medicals
1 [2026] 104 GSTL 45 (Bombay)[09-10-2025]
2 W.P. 7718/ 2025- Bombay High Court, Nagpur
3 2025-VIL-1378-BOM
4 [(2024) 15 CENTAX 118 (Mad.)]
5 [WP/16500/2024] - Karnataka HC
6 [2024 167 taxmann.com 332] - Karnataka HC
7 [WP/27776/2024] - Madras HC
8 [(2024) 24 CENTAX 9 (Kar.)] - Karnataka HC
9 [2025 27 CENTAX 288] - Karnataka HC
10 [WP/2911/2025] - Kerala HC
11 [WA/258/2025] - Kerala HC
12 [2025: KER:10722] - Kerala HC
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vs. The Deputy Commissioner13; R.A. and Co. vs. AC of Central Taxes, Chennai
South14; R. Ashaarajaa vs. Senior Intelligence Officer, DGGI 15; Oriental Lotus
Hotel Supplies Pvt. Ltd. vs. JC16; S. J Constructions vs. AC (ST),
Vishakhapatnam17; Pramur Homes And Shelters vs. The Union of India18.
3. Per contra, the Delhi High Court has taken a different view in the case of
Mathur Polymers v. Union of India 19 and Ambika Traders v. Commr.20. Also the
Allahabade High Court in M/s. S.A.Aromatics Pvt. Ltd. And Another Vs. Union of
India21. In such decisions, the Division Bench of these High Courts has
categorically held that a consolidated show-cause notice for various financial years
can be issued and there is no jurisdictional error on the part of the designated
officer in issuing such show-cause notice. The decisions of the Delhi High Court in
the case of Ambika Traders vs. Additional Commissioner22 and Mathur Polymers
vs. UOI & Ors (supra) were carried to the Supreme Court. The Supreme Court by
an order dated 1st September 2025 dismissed the Special Leave Petitions preferred
against the said decision in Ambika Traders (supra) as the Petitioners therein did
not wish to press the aforesaid petition. Further, the Supreme Court by an order
dated 07th November 2025 in the case of Mathur Polymers (supra) dismissed the
Special Leave Petition preferred by the Petitioner and held as follows:-
13 [WA/627/2025] - Kerala HC
14 [(2025) 33 CENTAX 14 (Mad.)] - Madras HC
15 [(2025) 32 CENTAX 453] - Madras HC
16 [2025-VIL-870-MAD] -Madras HC
17 [(2025) 35 CENTAX 165]- Andhra Pradesh HC
18 [(2025) 37 Centax 324(Kar)] - Karnataka HC
19 2025 SCC OnLine Del 6892
20 (2025) 148 GSTR 1
21 2026 SCC OnLine All 191
22 [(2025) 33 CENTAX 189]
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ORDER
1. Delay condoned
2. However, we find no good ground and reason to interfere with the
impugned judgment/order passed by the High Court [2025-VIL-
909-DEL].
3. The special leave petition is, accordingly, dismissed.
4. Pending application(s), if any, shall stand disposed of.
(emphasis supplied)
4. On the backdrop of the above decisions rendered by the various High
Courts and Co-ordinate benches of this Court, it is clear that there is a cleavage of
opinion on the issue, whether a consolidated show-cause notice for multiple
financial years, could be issued by the Department.
5. When the present batch of Petitions were taken up for hearing, the
Petitioners on one hand argued that these Petitions need to be allowed following
the decision of the co-ordinate Bench in Milroc (supra), whereas on the other
hand, on behalf of the Revenue, it was urged that considering the orders passed by
the Supreme Court dismissing Special Leave Petitions in the case of Mathur
Polymers (supra) being law of the land under Article 141 of the Constitution, as
also considering the order passed by the Supreme Court in Ambika Traders
(supra), the issue requires a re-consideration, including to examine whether the
decision in Milroc (supra) lays down the correct position in law.
6. We have heard learned Senior counsel, Mr. Hidayatullah, Mr. Darius
Shroff, Mr. Prakash Shah and Mr. Rohan Shah, and learned Advocates Mr.Bharat
Raichandani, Mr. Abhishek Rastogi on behalf of the Petitioners and Mr. Karan
Adik, Ms. Jyoti Chavan Addl.GP, Ms. Maya Majumdar, Mr. Jitendra Mishra and
Mr. Subir Kumar learned counsel on behalf of the Respondent-Department.
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7. Learned counsel on behalf of the Petitioners have made its following
submissions:-
i. Consolidated show-cause notices cannot be issued inasmuch as Sections
73(1)(3) and 74(1)(3) and Sections 73(10) and 74(10) are required to be
conjointly read to mean that each financial year is a separate financial year and the
return as defined in Section 2(97) of the CGST Act must be a return for every
financial year, along with the audited financial statement.
ii. The term “tax period” as defined in Section 2(106) of the CGST Act also
contemplates furnishing of Annual Returns, defined as the period for which the
return is required to be furnished, which contemplates the provision for an “annual
return”. Section 44 of the CGST Act, which may include reconciling the value of
supplies declared in the return furnished for the financial year with the annual
audited financial statement, with every financial year.
iii. Section 73(10) and 74(10) of the CGST Act provide for a period of
limitation in passing orders, being of 3 years and 5 years respectively. Hence, once
such limitation is prescribed, show-cause notices cannot be issued by clubbing
multiple years. Such position is accepted by this Court in the case of Milroc (supra)
and other decisions .
iv. The decision of the co-ordinate Bench would govern the field, and
would be binding, in the context of the principle of uniformity and certainty
in law. Hence, this Court is bound to follow the decision rendered on this issue in
the case of Milroc (supra) and thereafter followed in Paras Stones (supra) and Rite
Water Solutions (supra). There could not be any other divergent view that could
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considered the decisions of the Delhi High Court and have distinguished the same
in the case of Milroc (supra), Paras Stones (supra) and Rite Water Solutions
(supra). In such context, reliance was sought to be placed in the case of Sant Lal
Gupta v/s Modern Co-operative Group Housing Society Limited and Panjumal
Hassomal Advani v/s Harpal Singh, to support the above proposition.
v. It is next contended that the scheme of the GST Law and specifically the
CGST Act, 2017 does not contemplate issuance of a single consolidated show
cause notice for multiple years. In such context, it is submitted that the concept of
‘assessment’ under Section 2(11) of the Act means the determination of tax liability
and includes self-assessment, re-assessment, provisional assessment, summary
assessment and best judgment assessment. The term ‘return’ under Section 2 (97)
is assigned a definite connotation as return prescribed or otherwise required to be
furnished by or under this Act or the rules made thereunder and therefore the
definition of ‘return’ needs to be read with the definition of the term ‘tax period’,
to mean the period for which the return is to be furnished. It is hence submitted
that the notice needs to be issued for any ‘tax period’ based on filing of return
namely, monthly or annual return and if it is based on annual returns, it can be
only for the tax period within the relevant financial year. The Act does not
contemplate assessment beyond the financial year, hence, once the Act mandates
issuance of notice in a particular manner, it has to be only in such manner and in
no other way. Therefore, the issuance of a consolidated show cause notice for
multiple financial years was not justified.
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vi. It was also contended that the provisions of Section 16(4) of the CGST Act,
specify the year-bound nature of availing ITC, hence, the limitation as prescribed
under Sections 73(10) and 74(10) of the CGST Act, would apply and a single
consolidated show cause notice for multiple financial years cannot be issued. This
view finds support in the decision of the Madras High Court in Pramur Home and
Shelters (supra).
8. On the other hand, the Respondents/ Department has contended as
follows:-
i. That the issuance of a consolidated show-cause notice is firmly grounded in the
legal provisions, as the limitation period is prescribed for each financial year. The
consolidation of proceedings does not operate to extend or alter the limitation
period prescribed for each individual year. Each financial year is treated as a
separate and distinct period for the purposes of limitation and even in such cases,
the notices/orders have been issued within the prescribed limitation
ii. The issuance of a composite show-cause notice does not in any way breach any
of the provisions of the CGST Act or in any manner prejudice the rights of the
assessee. A consolidated show-cause notice when issued, does not disturb/override
the statutory timeline set for each financial year, as the limitation period is
reckoned separately and strictly adhered to in respect of each of the years. Hence,
each year stands on its own for the purpose of calculating the limitation.
iii. On a plain and conjoint reading of Section 73(1) and Section 73(3), as also
Section 74(1) and Section 74(3) of the CGST Act, it is clear that the Statute does
not prescribe any restriction/limitation on issuing a composite/consolidated show-
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within the statutory framework, (which includes the prescribed period of
limitation). Thus for example when notices are required to be issued for assessment
years within five years because the maximum time available to the department to
issue the aforesaid notices is five years from the date of filing the return by the
assessees.
iv. The transactions leading to the issuance of a composite/consolidated show
cause notice are usually a maze of transactions, prima facie interconnected with
each other, spread over a period of time. Both Sections 73(2) and 74(2) specify and
indicate that notices should be issued at least 3 months prior to the time limit
specified in Sections 73(10) and 74(10) respectively for issuance of orders. The
word used in both the sections is “at least”, therefore there is no fetter on the power
of the department to issue a show-cause notice as long as the said show cause notice
is issued within the period of limitation, and therefore, no prejudice is caused to
the Assessees in issuing a consolidated show cause notice.
v. The issuance of a consolidated show-cause notice does not create any bar in
applying or availing of amnesty schemes under Section 128A and Section 138 of
the CGST Act. Section 160(1) of the CGST Act protects all notices from defect,
omission or mistake.
vi. Also there is no embargo on the department to issue a consolidated show-
cause notice even on a plain purport of Section 73(10) and Section 74(10 ) of the
CGST Act which contemplates that the authorities have three years and five years
respectively, to pass an order, as Section 73(9) and Section 74(9) of the CGST Act
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clubbing more than one year and/or issuing a consolidated show-cause notice
under the Act.
vii. The judgment of the Division Bench in the case of Milroc (supra) is per
incuriam and sub-silentio, considering that the said judgment, according to the
Respondents does not give any reason for taking a view that a show-cause notice
issued under the correct provisions of Sections 73 and 74 of the CGST Act for
different tax periods is a jurisdictional issue.
viii. The view taken by the Division Bench in Milroc (supra) is on the reliance
on the judgment of the Madras High Court in the case of R.A & Co. v. Additional
Commissioner of Central Taxes23, which inter alia has relied upon the judgment of
the Supreme Court in State of Jammu and Kashmir vs Caltex India 24. It is the
submission of the Respondent, that the Madras High Court in relying on the said
judgment of the Supreme Court in Caltex India (supra) itself was an unacceptable
proposition, considering the issue in question. According to the respondents, this
has resulted in bringing about an incongruous position in law, rendering the
judgment in Milroc (supra) to be per incuriam. It is submitted that the judgment
of the Supreme Court in Caltex India (supra) was dealing with a case of one
common assessment order passed for various years. The said judgment
categorically held that if a part of the assessment order is valid and some part of the
assessment order is invalid, then the entire assessment order cannot be set aside.
This ratio of the said decision of the Supreme Court could not have been relied
23 [2025] 176 taxmann.com 731/ 111 GST 104/101 GSTL 21 (Madras)
24 AIR 1966 SC 1350Page 21 of 47
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Commissioner of GST & Central Excise.25 Further, in R.A & Company(supra) &
Titan Company Ltd. (supra), the issues arose in the context of an attempt on part
of the department, to revive a period which had otherwise expired, through
consolidated notices issued under Section 74 of the CGST Act. It is in such
context, the Madras High Court held that a consolidated show-cause notice could
not have been used in respect of the period for which limitation has expired. This
has not been considered in the decision rendered in Milroc (supra).
ix. It is not in dispute that various Writ Petitions filed by the Petitioners
concern fraudulent/ wrongful availment of ITC and if the department acts under
the show-cause notice creating a cascading effect qua the GST returns of the
relevant period, in such event, within the framework of law issuance of a show
cause notice for multiple financial years, was perfectly permissible, valid and
justified.
x. The Karnataka High Court in the case of Pramur Homes and Shelters vs
Union of India26 was persuaded to take a view that a consolidated show-cause
notice for multiple financial years would disentitle the Petitioner to take a ground
of limitation under Section 73 of the CGST Act again relying upon the judgment
in Titan Company Ltd. (supra) which inter alia relied upon the judgment of
Supreme Court in the case of State of Jammu and Kashmir vs Caltex India (supra)
which proceeded on a very different context and circumstances, and rather upheld
the validity of assessment orders passed for different assessment years by the
25 [2024] 159 taxmann.com 162 (Madras).
26 [2025] 181 taxmann.com 541 (Karnataka)[11-12-2025]
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department when the same were within the prescribed limitation. The Supreme
Court in such case upheld the assessment order, with the rider that part of the
assessment order for a certain tax period, which is barred by law, would not make
the entire assessment order invalid in law. Hence, the decisions relied upon by the
Petitioners and more particularly in Milroc (supra) which inter alia rely upon the
judgment of the Supreme Court would not assist the Petitioners.
xi. It is hence submitted that the Division Bench of this Court in Milroc
(supra) when is based on the judgment of the Madras High Court, in R.A.&
Company (supra) and Titan Company Ltd. (supra) which according to the
Respondents could not have relied upon the judgment of the Supreme court in the
case of State of Jammu and Kashmir vs Caltex India (supra), Milroc would not lay
down the correct position in law. It is submitted that this Court in Milroc (supra),
also did not consider the effect of Section 74(10) vis-a-vis the scope of Section
74(1) and 74 (3), thus also on such ground, the judgment in the case of Milroc
(supra) does not lay down the correct position in law. Further the said judgment is
in conflict with the constitution bench judgment in the case of Smt. Ujjam Bai vs.
State of Uttar Pradesh.27
xii. The Central Board of Indirect Taxes and Customs, for the Financial Years
2019- 2020 and 2020-21 extended the time limit/ due date to furnish the annual
return and in view of the same, the show-cause notice which has been issued does
not seek to revive any period which has elapsed.
xiii. The judgment of the Supreme Court in the case of Union of India and
27 1962 SCC OnLine SC 8
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Another vs Rajeev Bansal and Another 28, has held that the expression “assessment”
comprehends the entire procedure for ascertaining and imposing liability upon
taxpayers. In paragraph 28 of the said decision, the Supreme Court has defined
jurisdiction to mean the power of court, tribunal, and the authority to hear and
determine the cause or exercise any judicial power concerning such cause. Also,
the Supreme Court in paragraph 33 of the said decision explained the principle of
strict interpretation and workability. It is held that a strict interpretation of a statute
does not encompass strict literalism, which leads to absurdity or goes against the
express legislative intent. What is important in the said judgment is the finding of
the Supreme court in paragraphs 36-38 which held that ” in a taxing statute, the
charging section has to be construed strictly, but the machinery provision must be
interpreted in accordance with the ordinary rules of statutory interpretation. The
purpose is to give effect to the clear intent of the legislature ” It further held that
while interpreting the provision that set up the machinery of assessment, the rule is
that construction should be preferred in a way which makes the machinery
workable.
xiv. The determination of tax under Section 74 of the CGST Act is a provision
meant for adjudication and is a provision where a complete mechanism is provided
for adjudication. If at every stage, the proceedings are being challenged by the
Petitioners, which is not contemplated under the said provision, the adjudication
of show-cause notice under Section 74 will become unworkable. The Court hence
needs to take a purposive view and not follow the judgment in the case of Milroc
28 (2024)469 ITR 46
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(supra), which according to the respondents is per incuriam and sub-silentio, not
only being contrary to the statutory provisions but also the position in law as
recognized by the Supreme Court in Mathur Polymers (supra), as it has failed to
take note of various Supreme Court judgments, including on interpretation of the
machinery provisions, also it has further failed to follow the distinction between
the power to issue the show-cause notice having jurisdiction, with wrongful
exercise of power to issue a show-cause notice.
(xv) The Respondents have also relied on the clarification issued by the GST
Policy Wing dated 16th September 2025 on the issuance of a consolidated show-
cause notice. In the said policy document, it is categorically stated that the clubbing
of several financial years in one show-cause notice does not compromise the
timelines prescribed in Section 73(10) and Section 74(10) of the CGST Act and
does not result in an indirect extension in the limitation period, contrary to judicial
precedents. Instead, a single notice/order covering multiple years is bound by the
limitation for each financial year individually, by issuing an order/show-cause
notice within the prescribed time limit.
Analysis
9. Having heard the Learned Counsel on behalf of the parties, we are of the
opinion that although the Court would be bound by the decision of the co-
ordinate bench in Milroc (supra), however, there are significant legal issues as
raised by the Respondent-Department, including to rely on the decisions of the
Supreme Court, which in our opinion deserve due consideration by a larger bench.
Such issues, we find are not the subject matter of an express contention and
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consideration of the Division Bench in the case of Milroc (supra), as also in the
other decisions, which have taken a similar view that a single consolidated show-
cause notice cannot be issued for multiple financial years.
10. In the context of the GST law which is evolving and considering the nature
in which it operates, and its legal characteristics, in our opinion not only on first
principles as also on the plain application of law and on the principles on which
GST law is founded, there ought not to be any embargo on the department to issue
a consolidated show cause notice covering different periods. The following
discussion would aid our conclusion:
11. At the outset it would be imperative to examine the relevant provisions of
the CGST Act to decide the aforesaid issue.
Section 2(11)
assessment.― assessment means determination of tax liability under this
Act and includes self-assessment, re-assessment, provisional assessment,
summary assessment and best judgment assessment;
Section 2(97)
return.― return means any return prescribed or otherwise required to
be furnished by or under this Act or the rules made thereunder;
Section 2(106)
tax period.― tax period means the period for which the return is
required to be furnished;
Section 73: Determination of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised for any reason
other than fraud or any willful-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
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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),
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 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
subsection (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
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.
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Section 74 : Determination of tax 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 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 subsection (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 respect
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
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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.
(emphasis supplied)
12. At the outset, we may observe that Sections 73 and 74 are part of the
demand and recovery provisions falling under Chapter XV, titled as “Demand and
Recovery”. Section 73 provides for ” Determination of tax pertaining to the period
upto Financial Year 2023-24, not paid or short paid or erroneously refunded or
input tax credit wrongly availed or utilized for any reason “other than fraud or any
wilful misstatement or suppression of facts “. It is in such context, sub-section (1)
thereof provides that the proper officer shall serve notice in such circumstances, on
the person chargeable with tax, 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. Sub-section
(2) provides that the proper officer shall issue notice under sub-section (1) at least
three months prior to the time limit specified in sub-section (10) for issuance of an
order. Sub-section (3) provides that when such show cause 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 utilized for such periods other than those
covered under sub-section (1), on the person chargeable with tax. Sub-section (4)
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to sub-section (8) are the provisions which determine the further course of action,
which includes the situation as contemplated in sub-section (5) that a 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. The proper officer, in such case, in accordance
with the provisions of sub-sections (6), (7) and (8) is required to consider whether
the tax paid is adequate or they fall short of the actual payment which is required to
be made.
13. It is in the aforesaid context, the effect of sub-sections (9) and (10) of
Section 73 is required to be considered. Sub-section (9) of the said provisions
ordains that the proper officer shall, after considering the representation, if any,
made by the 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. In passing such order, the
prescribed limitation as provided in sub-section (10) becomes applicable which
provides that 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
utilized relates to or within three years from the date of erroneous refund.
14. Similar is the provision of Section 74 which pertains to determination of tax
not paid or short paid or erroneously refunded or input tax credit wrongly availed
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or utilized by reason of “fraud or any wilful misstatement or suppression of facts”.
The provision except for the context and the prescribed period of limitation as
provided in sub-section (10), which permits the proper officer to 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 utilized relates to or within five years from the
date of erroneous refund is quite similar to Section 73.
15. Thus, on a holistic reading of Sections 73 and 74 of the CGST Act, insofar
as determination of tax in both situations as contemplated by these provisions are
concerned, the provisions appear to be a code by itself which includes machinery
provisions in the nature of sub-section (1) and the other sub-sections.
16. The contention of the petitioners, however, is confined to and/or in relation
to what is the effect of sub-section (1) when these provisions provide for issuance
of show cause notice, and that it would not be permissible for the proper officer to
issue a show cause notice by clubbing different periods or to issue a consolidated
show cause notice for different periods. The reason inter alia being primarily of the
limitation as prescribed under sub-section (10), which enables the proper officer to
pass an order in relation to payment only in regard to the prescribed period and
not otherwise in the context of the other provisions as noted by us hereinabove.
17. On a plain reading of the provisions, we find it difficult to accept that the
intention of the legislature in providing for sub-section (1) of Section 73/74 was to
confine the authority of the proper officer to a issue show cause notice not for the
different periods but for a specific period for which one return could be filed. This
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prima facie is clear from the plain language of the provisions and more
importantly, from the conjoint reading of sub-sections (1), (2) and (3). Sub-
section (3) specifically uses the word “for any period under sub-section (1)”.
Further, compounded by using the words ” such periods other than those covered
under sub-section (1) …..”, when sub section (3) permits issuance of a statement
for a period other than the period of the notice under sub-section (1), deeming it
to be a notice as provided for in sub-section (4), it gives a credence to the
respondents contention of it being permissible for the proper officer to issue a
notice for different periods under sub-section (1), as permissible under sub-section
(3) and (4).
18. In our view when the legislature has used such specific words, it is difficult
to accept a proposition that the legislature was not aware or would not be
conscious, that a show cause notice can be issued for different periods and/or vice-
versa, it could be issued only for a limited period. The legislature hence has not
confined the operation of sub-section (1) read with sub-sections (2) and (3) for the
specific period when the definition clause defines the expressions as noted by us
(supra). Thus, to read the provision in the manner the petitioners would suggest,
that there would be no authority with the proper officer to issue a show cause
notice by clubbing of different periods, in our opinion, would amount to reading
something in the provisions which the legislature has avoided to provide, and in
fact would amount to re-writing of the provision, which is neither permissible for
the assessee to canvass nor permissible for the Court to accept.
19. In such context, the question therefore is whether the provisions of sub-
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section (10) which prescribe limitation in any manner restrict the operation of sub-
section (1) read with sub-sections (2) and (3). On a plain consideration, there is no
such indication that sub-section (10) which confines itself to an order being passed
under sub-section (9), when providing for limitation in that regard, in any manner
controls, restricts or creates an embargo on the proper officer exercising
jurisdiction to issue a show cause notice by clubbing the different periods, which in
our opinion is wholly available and permissible under sub-section (1). In other
words, we do not find that there is any legislative indication that sub-section (10)
would restrict the operation of sub-section (1).
20. Therefore, there is a grave doubt on the tenability of such contentions of the
petitioners that the show cause notice under sub-section (1) of Sections 73 and 74
would be required to be issued, keeping in mind the period of limitation as
prescribed under subsection (10) and/or it is wholly impermissible to club different
periods in a show cause notice issued under subsection (1). This prima facie would
in fact be a wrong reading of provisions of sub-section (1) of Sections 73 and 74.
21. We now consider whether Milroc Good Earth Developers (supra) considers
the legal position as the legislature would postulate to prevail. In such case the
Division Bench, after considering the provisions of Sections 73 and 74 of the
CGST Act and the limitation prescribed thereon, has reached to a conclusion that
there is no scope for consolidating various financial years/tax periods, subject
matter of the impugned show cause notice assailed in the said proceedings.
Following observations are required to be noted:
“18. When we have perused the scheme of assessment and payment of tax,
we find that the taxes payable under the Act commensurate with Return filedPage 33 of 47
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WP 16848-25 & ORS.DOCfor ‘each tax period’ and this is may be in the form of self-assessment or
provisional assessment as provided in the Act. However, what is important to
note is that there is a prescription of period of five years of due date on which
‘annual Return’ is filed for the relevant financial year and provision of
payment and recovery is also included in the statutory scheme in form of
Section 73 and 74, which underwent significant amendment by the Act 15 of
2024 and the provision as per sub-section (12) shall be applicable for
determination of tax pertaining to the period up to Financial Year 2023-24
and for financial year 2024-25 and onwards, the provision under Section
74A will be relevant.
19. From the perusal of the entire Scheme, it is evidently clear to us that the
statutory provision for assessment of tax for each financial year expect the
Show Cause Notice to be issued at least 3 months prior to the time limit
specified in Section 73(10) and 74(10) of the Act, for issuance of assessment
order as sub-section (10) provide that the proper officer shall issue the order
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/short paid or input tax
credit wrongly availed or utilised relates to or within five years from the date
of erroneous Return. Thus, there is limitation prescribed for demand of tax
and its recovery.
The Act of 2017, therefore involve a definite tax period, based on the
filing of the Return, which can be either monthly or annual Return and if the
assessment is based on annual Return, the tax period shall be the relevant
financial year.
In the light of the statutory scheme, we find that there is no scope for
consolidating various financial years/tax period which is attempted by the
impugned Show Cause Notices assailed in the Petition.”
(emphasis supplied)
22. In reaching the above conclusion, the Court was guided by the observations
of the Madras High Court in R.A & Company (supra). Also the Court was
persuaded to take such view considering the decision of High Court of Kerala in
Tharayil Medicals vs. The Deputy Commissioner 29 and the decision of Madras
High Court in Titan Company Ltd. (supra) as noted in paragraphs 20 and 21 in
Milroc Good Earth Developers (supra). The following are the observations of the
Division Bench in such context :
20. In arriving at the aforesaid conclusion, we are guided by the observations
of the Madras High Court in the case of Ms R A And Co. (supra), where this
very issue with regards to ‘bunching of show cause notices’, i.e. issuance of29(2025) 29 Centax 395 (Ker.)
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WP 16848-25 & ORS.DOCsingle show cause notice by the respondent Revenue for more than one
financial year was raised and on detailed scrutiny of the provision under the
statute and by placing reliance upon the earlier authoritative pronouncement,
the High Court recorded thus:
“10. Section 73(10)/74(10) of the GST Act specifically provides
the time limit of 3 years/5 years from the last date for filing the
annual returns for the financial year to which the tax dues relates
to. Thus, the GST Act considered each and every financial year as
separate unit, due to which, the limitation has been fixed for each
and every financial year separately. When such being the case,
clubbing more than one financial year, for the purpose of issuance
of show cause notice, would not be considered as in accordance
with the provisions of Section 73/74 of the GST Act. Therefore,
the limitation period of 3 years/5 years would be separately
applicable for every financial year, thus, the limitation period
would vary from one financial year to other. It is not that the
limitation would be carried over or continuing in nature, so as to,
club the financial years together. For these reasons also, the
bunching of show cause notice is impermissible. In this regard, the
Constitution Bench of the Hon’ble Apex Court in the decision
rendered, which was reported in AIR 1966 SC 1350 (State of
Jammu and Kashmir and Others v. Caltex (India) Ltd) has held as
follows:
“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.”
11. Section 73(3)/74(3) of the GST Act refers to issuance of
“statement”, for subsequent “tax periods”, containing the details of
tax liabilities pertaining to the respective tax periods. If a notice,
under Section 73(1)/74(1) of the GST Act, is issued for any
particular tax period, a statement shall be issued, in terms of
Section 73(3)/74(3) of GST Act, for the subsequent months and
the said statements shall deemed to be a notice issued under
Section 73(1)/74(1) of the GST Act.
12. In Section 73(3)/74(3) of the GST Act, it has been stated that
“Where a notice has been issued for any period under sub-
section (1)….. “Therefore, an argument was made by the
learned Additional Solicitor General that “any period”
means, the period, which may be more than one financial
year and hence, he raised a contention that the notice under
Section 73(1)/74(1) of the GST Act can be issued for more
than one financial year.
13. In Section 73(4)/74(4) of the GST Act, it has been stated as
follows:
“(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 forPage 35 of 47
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(1) are the same as are mentioned in the earlier notice.”
In making the aforesaid observations, the High Court was guided by
the definition of term ‘Tax period’ and the term ‘Return’ as defined under
Section 2 of the Act.
The observations of the Co-ordinate Bench in Titan Company
Limited (supra) were gainfully reproduced where the bunching of the show
cause notices was held to be against the spirit of the provision of Section 73
of the Act.
21. The relevant observation in the judgment rendered in M/s. Tharayil
Medicals v/s. The Deputy Commissioner2, by the Division Bench of Kerala
High Court was also re-produced which read to the following effect:
“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 assesse 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 prescribed
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 recourse
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 6 months to the time limit prescribed under sub-sectionPage 36 of 47
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WP 16848-25 & ORS.DOC(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.
In the wake of the aforesaid, the following conclusion is derived
by the Madras High Court:
“27. In view of the above discussion, it is clear that issuance of
composite show cause notice covering multiple financial years
making composite demand for multiple years without separate
adjudication per year frustrate the limitation scheme and prevents
the petitioner from giving year-specific rebuttals, which results in
jurisdictional overreach, i.e., the proper officer acts without
authority of law, rendering the order void ab initio. Further, the
impugned order is passed in contravention of clear statutory
safeguards under Section 74(10) and Section 136 of GST Act.”
(emphasis supplied)
23. The principle of law of “strict interpretation” in interpreting taxing statues is
well settled. It would not be permissible for the Court to substitute the wisdom of
the legislature and more so in the absence of any ambiguity by a method of judicial
interpretation. In our respectful opinion, the decision of the Madras High Court
and the High Court of Kerala on such principle whether could be applied is also a
valid issue as raised by the respondents.
24. Thus, it is quite clear that the Division Bench was primarily guided by the
aforesaid decisions of the Madras High Court and High Court of Kerala. However,
significantly a contrary view is taken by the Division Bench of Delhi High Court in
M/s. Mathur Polymers (supra) in which the Division Bench considering the
judgment of the Madras High Court in Titan Company Ltd. (supra) as also
referring to Ambika Traders v. Commr. (supra) held that the Court having fully
considered the statutory scheme also the legislative history of the GST Act ,
issuance of consolidated notice for multiple financial years would be permissible
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and tenable. The relevant observations as made by the Division Bench of the
Delhi High Court in M/s. Mathur Polymers (supra) are required to be noted,
which read thus:
15. The second issue that is being raised herein is in respect of Section 74(10) of
the Act, stating that a combined Show Cause Notice and order cannot be given and
separate orders have to be passed in respect of separate financial years.
16. In support of the said submission, reliance is placed upon by the Petitioner on
the decision of the Supreme Court in State of Jammu and Kashmir and Others Versus
Caltex (India) Ltd. 1965 SCC OnLine SC 168, wherein reference was also made to the
decision in Bennet and White (Calgary) Ltd. v. Municipal District of Sugar City No. 5,
[1953] S.C.R. 1069.
17. The judicial committee, in Bennet & White (supra) observed that when the
assessment is not for an entire sum but for separate sums, the same ought to be
dissected and earmarked, each to a separate assessable item. The said decisions were,
however, rendered in the context of sales tax.
18. In the case of Caltex (India) (supra), there was one assessment order passed
from the period January, 1, 1955 to May, 1959, but the assessment could be easily split
up and dissected and the items of sales could be separated and taxed for different
periods. Hence, the Supreme Court held that in such a case, the assessment for the
period from January 1, 1955 to September 6, 1955 can be separated from the
assessment of the rest of the period.
19. However, the decision in Caltex (India)(supra) cannot be applied to the facts
in the present case, since the case in hand pertains to allegations of fraudulent availment
of Input Tax Credit (hereinafter, ‘ITC’). The impugned order contains the record of a
long drawn investigation over a period of time which led to the confirmation of tax
demand of ITC amounting to Rs.81,54,990/-.
20. Another decision relied upon by the Petitioner is W.P. No. 33164 of 2023
titled Titan Company Ltd. v. Joint Commissioner of GST & Central Excise. In the said
case, the issue of bunching of Show Cause Notices (SCNs) was considered by the
Madras High Court and the Court was of the opinion that under Section 73, Central
Goods and Service Tax Act, 2017, bunching of SCNs would not be permissible.
21. Heard. This Court has, in the past, considered several orders-in original
involving demands on the ground of allegations of fraudulent availment of ITC and has
held that there are several factual issues in such cases, which would need to be looked
into, which cannot be adjudicated in a writ petition. In the decision of W.P.(C)
4853/2025 titled Ambika Traders through Proprietor v. Additional Commissioner,
Adjudication, DGGSTI, CGST Delhi North, in the context of issuance of multiple
consolidated SCNs and passing of a consolidated order, this Court observed 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 utilized 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.
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Similar is the language even in Section 73 of the CGST Act. The relevant
provisions read as under:
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 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 utilization of ITC in one financial year may
actually not be capable of by itself establishing the pattern of fraudulent
availment or utilization. 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 utilization 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 Hon’ble President of India, who addressed the
Nation at the launch of the GST on 1st July, 2017, ITC was highlighted as
one of the core features integral to the framework of the GST regime. The
relevant extract of the said speech of the Hon’ble 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.”
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49. It is seen that the said feature of ITC has been misused by large
number of unscrupulous dealers, businesses who have in fact utilized 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.
In the above decision, the Court has fully considered the statutory scheme as also
the legislative history of the GST Act and held that in cases relating to availment of
Input Tax Credit, considering the maze of transactions and due to the fact that the
transactions may be spread over several years, issuance of a consolidated notice for
multiple Financial Years would be permissible and tenable.”
(emphasis supplied)
25. On behalf of the respondents, reliance is placed on the recent decision of
the Allahabad High Court in M/s. S.A.Aromatics Pvt.Ltd. And Another (supra),
wherein the Allahabad High Court was examining the very same contention as
urged on behalf of the petitioners and as considered by the Division Bench in
Milroc Good Earth Developers (supra). In such context, the Division Bench of
Allahabad High Court was of the clear view that it was permissible for the proper
officer to issue a consolidated show cause notice for different years. The
observations as made by the Allahabad High Court are required to be noted, which
read thus:
“65 Therefore, it requires examination, whether by exclusion of such words or
by not using same or similar phrases under Section 73 and 74 of the Acts, the
legislature has intended otherwise. To us, it appears that the scheme of the Acts
is in two parts, first with respect to assessment as has been discussed above and
the other with respect to demand of tax or penalty short paid or short levied or
refund wrongly paid or ITC wrongly availed etc.
66. While the assessment procedure traces its legacy to the pre-existing sales tax
laws, whether under sales tax or entry tax laws and is comparable to assessment
procedures under Income Tax Act, 1961, Sections 73 and 74 of the Acts trace
their legacy primarily to the Central Excise and Service Tax laws. These are
popularly referred to as adjudication proceedings.
67. Thus, an assessment may be made primarily to test the correctness and
completeness of returns filed for any tax period referable to a FY or partPage 40 of 47
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WP 16848-25 & ORS.DOCthereof. However, adjudication provisions are separate. They stand on a
completely different footing and must be read and understood in the context of
the own language of the relevant provisions.
68 Keeping that in mind, Sections 73 and 74 appear after Chapter XIII
(pertaining to Audits) and Chapter XIV (pertaining to Inspection, Search,
Seizure and Arrest). They are part of Chapter XV pertaining to Demand of
Recovery. Yet, they deliberately do not begin with any word, phrase or
sentence indicating that they are subject to assessment of tax liability for any
specific tax period.
69. On the contrary, they refer to a dispute with respect to specified tax
amount, or penalty that may not have been paid, or may have been short-paid
or erroneously refunded or where Input Tax Credit may have been wrongly
availed or utilized for any reason. The use of the words “where it appears” that
“any tax has not been…” enable the Proper Officer to identify a dispute of the
nature specified in the later part of Sections 73(1) and 74(1) of the Acts.
70. In that context, sub-Section (1) of Sections 73 and 74 provide that the
Proper Officer ‘shall serve notice’ with respect to specified amount of tax not
paid, tax short-paid or tax, wrongly refunded or ITC that may have been
erroneously granted or wrongly availed or wrongly utilized. With respect to
that dispute, the noticee is required to “show cause” as to why they may not be
required to pay the disputed amount of tax, along with interest and penalty.
71. By very nature of that proceeding contemplated by the legislature, the
legislature has avoided conditioning it within the limits of a ‘period’ or ‘tax
period’ or to one FY. Therefore, there is no warrant to restrict the application
of Sections 73 and 74 of the Acts to singular ‘tax period’, emerging from
obligation to file return for such tax period. It further appears that the
legislature has deliberately avoided the language used under Chapter XII of the
Acts pertaining to assessments, whether on the strength of returns or on a best
judgment assessment basis and whether provisional or summary. On the
contrary, the legislative intent is to demand specified amount of tax, penalty
etc., arising from a dispute as to liability on a transaction or nature of
transaction etc.
72. Thus, the legislative scheme is where returns or obligation to file returns
exist for any ‘tax period’ and doubts emerge as to their correctness or
completeness, it is open to the Proper Officer to adopt the assessment
procedure and make a return-based assessment for that ‘tax period’. By very
nature of that proceeding, it would be confined to the ‘unit of assessment for
which that proceeding is drawn, being linked to the obligation to file return for
such assessment unit i.e. month, quarter or year.
73. However, when a dispute arises of the nature contemplated under Sections
73(1) and 74(1) of the Acts, the obligation to file returns and the tax period for
which such returns are to be filed lose significance for the purpose of subject
matter of the notice. The demand may be of (i) tax, or penalty short levied or
short paid; (ii) refund wrongly granted or (iii) ITC wrongly granted or availed
or utilized. Therefore, we reason, for the purposes of adjudicating a dispute
under Sections 73 and 74 of the Acts, the return-based assessment procedure is
extraneous. The legal prescriptions with respect to such demands may neither
be introduced nor inferred by force of artificial legal reasoning, as they do not
spring from the plain language employed by the legislature. Rather, those
provisions refer to dispute of ‘specified tax amount’ that the revenue seeks toPage 41 of 47
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74. To introduce assessment procedures and its concepts, to adjudication
proceedings would not only be alien/to the concept of adjudication as created
by the legislature but if taken to its logical end, it would result in duplication of
procedures to deal with the same contingencies; one by way of assessment and
another by way of adjudication. That duplicity or surplusage of provisions is
not desirable on first principle test. As noted above, we are of the opinion that
assessment is a return-based procedure, whereas adjudication is a dispute-based
procedure linked to specified tax amount etc. If that line of distinction is
maintained between these two sets of procedures prescribed by the Acts, no
dispute may survive.
75. In this regard, we may also note, under the classic return-based assessment
procedures under the sales tax laws, there existed provisions for reassessment in
certain circumstances, involving escapement of turnover, etc. That concept
does not find any place under the Acts. To that extent, the adjudication
procedure, especially under Section 73 of the Acts, is a clear replacement for
reassessment procedure. Thus, the adjudication procedure is traceable to the
procedures of Central Excise and Service Tax regimes. The primary difference
is the reassessment procedure recognizes the FY or AY as a distinct unit of
assessment, whereas the adjudication procedure breaches the end boundaries
thereof and looks at the ‘dispute’ with respect to payability of specified amounts
of tax or penalty or reversal of refund or availment of ITC etc., as the subject
matter of the proceedings to be drawn.
76. In support of the above, we find further validation in the statutory
provisions in Sections 73(3) and 74(3) of the Acts. The Proper Officer is
permitted to issue a statement containing details of tax not paid or short-paid
for ‘such (other) periods’, that may not have been included in or for which
notice may not have been issued under Sections 73(1) and/or 74(1) of the
Acts. By virtue of Sections 73(4) and 74(4), the Proper Officer has been
specifically enabled to include within the scope of a pending adjudication
‘periods’, involving the same dispute irrespective of FY or unit of assessment to
which such ‘periods’ may relate, or to which the initial notice may relate.
77. The legislature has carefully avoided the use of the words ‘tax period’ under
those sections as may have required a further reference of FY to which they
may relate. Even though, by way of a general rule, the definition clause may
apply unless the context otherwise requires, there is no ambiguity here. The
legislative intent is not to link the statement issued by the Proper Officer under
Sections 73(3) and/or 74(3) to a specific ‘tax period’. Instead, it refers to any
another ‘period’, including a ‘tax period’ or unit of assessment that may fall
outside the FY to which the original notice under Sections 73(1) or 74 (1)
relates.
78. The said sub-section further defines the scope of an adjudication
proceeding to settle a ‘dispute’ for a specified tax amount etc. and not to make
an assessment. It is so because the legislature has chosen to allow the Proper
Officer to issue a statement and thus raise demand for other ‘period’, based
solely on the consideration that such demand may spring on the same grounds
for which the notice may have been issued, either under Section 73(1) or
74(1), the only difference being that for the purposes of Section 74(3), reasons
have to be same for those other ‘period/periods”, and it may not be extended to
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79. Coming to the contention based on Section 73(10) [read with 73(3)] and
Section 74(10) [read with 74(3)], those provisions do not govern the subject
matter of the notice itself. Rather, those provisions refer only to the time
limitation to initiate and conclude adjudication proceedings. They prescribe
clear, predefined time limitation of three years or five years, respectively, from
the due date of furnishing the annual return’. The mere fact that the legislature
has chosen to use the phrase “due date for furnishing of annual return’ under
sub-section (10) of Sections 73 and 74 to prescribe such limitation, it does not
commend to us that therefore the proceedings initiated under those sections
may only relate to or be referable to the individual ‘tax period’ for which an
annual or other return may be filed.
80. The legislative wisdom is to be deciphered from the intent of the legislature
as expressed by specific words used by it. To the extent, the legislature has
clearly provided for the scope of proceedings; the manner of their initiation and
conduct, and their time limitations through the various sub-clauses of Sections
73 and 74, we find no conflict between the language used in Sections 73(1),
(2), (3) and (4) or 74 (1), (2), (3) and (4) with that used in Section 73(10) or
74(10). While Sections 73(1) and 74(1) are provisions providing for the scope/
subject matter of those proceedings, Sections 73(2) read with 73(10) and 74(2)
read with 74(10), ensure that notices are issued and proceedings are concluded
within the time limitations prescribed under those provisions, Sections 73(3)
read with 73(4) and Section 74(3) and 74(4), are provisions for the issuance of
further statements by the Proper Officer that naturally cause increase of the
specified tax dispute etc. arising on same facts, that may be adjudicated
together. These provisions exist for the benefit of the revenue, not the assessee.
They enlarge the pre-specified subject matter of the dispute, without extending
the limitation therefor.
81. Barring cases of fraud etc. [falling under Section 74(4)], the legislature did
not intend that the scope of the adjudication proceedings be curtailed or
limited to a single tax period or to multiple tax periods falling within one
Financial Year. That intent being absent, we are unable to subscribe to the
contrary view taken by some of the other High Courts. With humility, we may
add that we also do not find ourselves completely aligned to the reasoning of
the other High Courts (at the other end of the spectrum), chiefly the Delhi
High Court. Respectfully, we draw this point of distinction based on our
interpretation of the scheme of the Acts, that provide for dual mechanisms one
return-based assessment referable to a ‘tax period’ and the other being
adjudication based, for a pre-specified amount-based dispute pertaining to tax,
penalty or ITC.
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, penalty, 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
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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.
(emphasis supplied)
26. The view taken by the Delhi High Court in Ambika Traders v. Commr.
(supra) was assailed by the petitioner therein before the Supreme Court. Such
Special Leave Petition filed by the petitioner was dismissed by an order dated 1
September, 2025. Thus, the said decision has attained finality in view of the
proceedings not being pressed. However, what is of immense significance is that
the decision of the Delhi High Court in M/s. Mathur Polymers was assailed before
the Supreme Court in the proceedings of a Special Leave Petition which was
dismissed by the Supreme Court by an order dated 7 November, 2025 by a
speaking order (supra). Once the Supreme Court has found that there was no
good ground and reason to interfere with the impugned order passed by the Delhi
High Court in M/s. Mathur Polymers (supra), certainly the principles of law as laid
down by Kunhayammed and Ors. (supra) would become applicable, in which the
Supreme Court has made the following observations:
“(v) If the order refusing leave to appeal is a speaking order i.e. gives
reasons for refusing the grant of leave, then the order has two implications.
Firstly, the statement of law contained in the order is a declaration of law
by the Supreme Court within the meaning of Article 141 of the
Constitution. Secondly, other than the declaration of law, whatever is
stated in the order are the findings recorded by the Supreme Court which
would bind the parties thereto and also the court, tribunal or authority in
any proceedings subsequent thereto by way of judicial discipline, the
Supreme Court being the Apex Court of the country. But, this does not
amount to saying that the order of the court, tribunal or authority below
has stood merged in the order of the Supreme Court rejecting the special
leave petition or that the order of the Supreme Court is the only order
binding as res judicata in subsequent proceedings between the parties.
…………”
27. Also, the issuance of a single consolidated show-cause notice for multiple
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financial years will give the Department a handle to issue show-cause notices,
especially in cases of fraudulent / wrongful availment of ITC, beyond the limitation
period. The single consolidated show-cause notice for multiple financial years
could not be issued being the anxiety of the Petitioner referring to Milroc (Supra)
is also not correct, considering the statement issued by the GST Policy Wing by its
document dated 16th September 2025 wherein it has been clarified as under:-
“The consolidation of proceedings does not operate to extend or alter the
limitation period prescribed for each individual year. Each financial year
is treated as a separate and distinct period for the purposes of limitation
even in such cases and the notices/orders are being issued within the
prescribed limitation time frame applicable to every specific year included
in the consolidated notices/orders. The issuance of a consolidated notice
order as a procedural mechanism must not be misconstrued as indirectly
extending the limitation period prescribed statutorily for acting in relation
to any given financial year. A consolidated instrument does not override
the independent statutory timeline set for each financial year as the
limitation period is reckoned separately and strictly adhered to in respect
of every year and thus, each year stands on its own footing for the purpose
of calculating limitations.”
(emphasis supplied)
28. We may observe that, it is always however permissible for the noticees to
raise objections insofar as the demand or determination of tax not paid or short
paid or erroneously refunded or input tax credit wrongly availed or utilised, to be
time barred. Also it is always open for the proper officer, to consider such
objection, and confine the determination only in respect of such period in regard to
which such limitation is available. Thus to consider a bar under sub-section (1) to
issue a consolidated show cause notice for different periods merely because sub-
section (10) provides for limitation in passing of orders, in our opinion, would
amount to an incorrect reading of sub-section (1), imposing an unwarranted
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restriction to the operation and legislative intent of sub-section (1) of Section
73/74 . It cannot be overlooked that sub-section (10) prescribes limitation, when
the proper officer passes an order as per sub section (9). A limitation to pass any
order cannot be a limitation on issuance of a show cause notice. As the limitation
for passing an order is not the same as issuance of a show cause notice. The two
are independent statutory concepts. Such statutory concepts are quite
compartmentalized, inasmuch as subsection (1) pertains to issuance of show cause
notice and subsection(10) pertains to passing an order within limitation. Thus, the
effect as brought about by the provisions is completely distinct and independent.
29. We may further observe that considering the view which we have taken, we
do not intend to discuss the different decisions of the other High Courts as cited on
behalf of the petitioner except, and as referred hereinabove. However, we may state
that the observations of the Karnataka High Court inter alia in paragraph 8.11 of
the decision Pramur Homes And Shelters vs. The Union of India (supra), as relied
on behalf of the petitioners, in our respectful opinion, for the reasons as discussed
hereinabove, appear to be not in consonance with the legislative scheme of Sections
73 and 74 of the CGST Act.
30. In the light of the above discussion, in our considered view the following
questions of law, need consideration of the Larger Bench.
1) Whether the operation of sub-section (1) of Section 73/74 of the
CGST Act read with the provisions of sub-section (3) is in any manner
controlled by the provisions of sub section (10), so as to create an
embargo, on the department to issue a consolidated show cause notice
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for different years ?
2) Whether the provisions of sub-section (10) of Section 73/74 of
the CGST Act per se prohibits the issuance of single consolidated show
cause notice for multiple financial years/tax periods?
3) What is the effect of Section 160 of the CGST Act on the
proceedings initiated by the proper officer under Section(s) 73/74 of the
CGST Act by issuance of a consolidated show cause notice for different
periods?
4) Whether the decision of the Division Bench in Milroc Good
Earth Developers v/s Union of India & Ors., when it holds that the
proper officer lacks authority to club various financial years/tax periods,
in issuing a single consolidated show cause notice under Section 73(1)
& (3)/74(1) & (3) of CGST Act lays down the correct position in law?
5) In terms of Article 141 of the Constitution of India, what is the
legal position as brought about in the order of the Supreme Court in the
case of Mathur Polymers (supra) ?
31. The proceedings, accordingly, be placed by the Registry before the Hon’ble
the Chief Justice for constitution of Larger Bench for a decision on the aforesaid
questions of law.
32. In all matters where interim orders have been passed, such orders shall
continue till the Larger Bench decides the issues.
(AARTI SATHE, J.) (G. S. KULKARNI, J.)
Signed by: P.V.Rane
Designation: PS To Honourable Judge Page 47 of 47
Date: 17/04/2026 21:46:36 Mane