Facts of the Case:

The petitioner was issued a single, composite show cause notice under Section 74 of the CGST/KGST Act covering multiple tax periods spanning several financial years. The notice proposed a consolidated demand of tax, interest and penalty by clubbing together different financial years, followed by consequential adjudication proceedings. Aggrieved by the very assumption of jurisdiction, the petitioner approached the High Court under Article 226 contending that the GST law does not permit issuance of a solitary show cause notice for more than one financial year and that such “bunching” frustrates the statutory limitation scheme, prejudices year-wise defences, and amounts to jurisdictional overreach. The respondents defended the notice by relying on the expression “any period” used in Sections 73(1)/(3) and 74(1)/(3), contending that a composite notice is legally permissible.

Issue:

Whether, under Sections 73 and 74 of the CGST/KGST Act, the proper officer can issue a single, composite show cause notice and pass a consolidated adjudication order covering multiple tax periods or financial years, or whether separate notices and adjudication are mandatorily required for each tax period/financial year.

Held that: 

The High Court held in favour of the petitioner and categorically ruled that clubbing or bunching of multiple tax periods or financial years in a single show cause notice under Sections 73 or 74 of the CGST/KGST Act is illegal, impermissible and without jurisdiction. The Court undertook a conjoint reading of Sections 73(1), (2), (3), (4) and (10) and Sections 74(1), (2), (3), (4) and (10) along with the definitions of “return” under Section 2(97) and “tax period” under Section 2(106), and held that the expression “any period” used in Sections 73/74 can only mean a “tax period”, i.e., a period for which a return is required to be furnished—monthly or annually—but never more than one financial year at a time.

The Court emphasized that the GST statute treats each financial year as a distinct and independent unit for the purposes of limitation, adjudication, penalties, waiver schemes and appellate remedies. Since limitation under Sections 73(10) and 74(10) is prescribed separately for each financial year, issuing a composite notice for multiple years defeats the statutory scheme and allows the department to indirectly bypass limitation and other safeguards. Relying on the Constitution Bench judgment in State of Jammu & Kashmir v. Caltex (India) Ltd., as well as consistent views of the Madras, Kerala, Karnataka and Andhra Pradesh High Courts (including Titan Company Ltd., Tharayil Medicals, Instakart Services, and R.A. & Co.), the Court rejected the contrary view taken by the Delhi High Court.

The Court further held that such composite notices cause serious prejudice to assessees by denying them year-specific defences, affecting their rights under Sections 128 and 138, and by potentially misclassifying proceedings under Section 74 instead of Section 73 for particular years. Since the defect goes to the root of jurisdiction, the writ petition was held to be maintainable despite availability of an alternative remedy. Consequently, the impugned composite show cause notice and all proceedings pursuant thereto were quashed as void ab initio, while liberty was reserved to the department to initiate fresh proceedings strictly in accordance with law by issuing separate notices for each permissible tax period/financial year.

Case Name: M/s. Pramur Homes And Shelters Versus The Union of India, The Central Board of Indirect Taxes And Customs (CBIC), New Delhi, Principal Commissioner of Central Tax, Mysore GST Commissionerate, Additional Commissioner of Central Tax Mysore, Superintendent of Central Tax (HPU) Mysore. dated 11.12.2025

To read the complete judgement 2025 Taxo.online 3341