Facts of the case:

In this case, the petitioner approached the High Court challenging a composite intimation of tax liability issued in Form GST DRC-01A under Section 74(5) of the CGST Act, covering multiple financial years from 2017-18 to 2023-24, followed by a composite Show Cause Notice issued in Form GST DRC-01 under Section 74(1). It was contended that the tax authorities had clubbed demands pertaining to several financial years into a single DRC-01A and DRC-01, and secondly, that the reply filed to the DRC-01A was not considered before issuance of the show cause notice.

Further, submitted that under Section 2(106) of the CGST Act, the term “tax period” refers to the period for which a return is required to be furnished, and since returns are filed for specific periods, a composite intimation or show cause notice covering multiple financial years is impermissible, particularly when the subject matters for different years are distinct. Reliance was placed on judicial precedents, including the decision of the Supreme Court in Commissioner Trade and Tax, Delhi v. Shanti Kiran India (P) Ltd. and a judgment of the Bombay High Court (Goa Bench) in Micro Good Earth Developers v. Union of India.

Issue:

Whether a composite intimation in Form GST DRC-01A and a composite Show Cause Notice in Form GST DRC-01 covering multiple financial years is legally sustainable under Section 74 of the CGST Act when the subject matters involved in different financial years are distinct, and whether such notices can survive when the taxpayer’s reply to DRC-01A is not considered.

Held that:

The High Court held that the composite intimation and show cause notice issued in the present case were not legally sustainable. The Court observed that although, in principle, a composite notice may not be barred where the issue and subject matter across different financial years are identical, the undisputed position in the present case was that the subject matters for different financial years were different. In such circumstances, the authorities were required to issue separate intimations under Form DRC-01A and, if necessary, separate show cause notices under Form DRC-01 for each financial year, after duly considering the response of the taxpayer.

The Court further noted that the reply submitted by the petitioner to the DRC-01A had admittedly not been considered prior to issuance of the show cause notice, which vitiated the proceedings at the threshold. Accordingly, the intimation and the show cause notice were quashed and set aside.

Case Name: M/s Ekta Enterprises Versus State of Himachal Pradesh & anr. dated 02.01.2026

To read the complete judgement 2026 Taxo.online 77