The Karnataka High Court in the case of M/S. VEREMAX TECHNOLOGIE SERVICES LIMITED VERSUS THE ASSISTANT COMMISSIONER OF CENTRAL TAX BENGALURU. vide Order No.  WRIT PETITION NO. 15810 OF 2024 (T-RES) dated 04.09.2024, has held Section 73(10) of the CGST Act sets out specific time limits for issuing show cause notices related to tax dues for each financial year. The consolidation of multiple years into a single notice is held to be improper.

The court refers to the established legal principle that each assessment year must be treated separately, and failure to do so violates the provisions of the CGST Act.

Facts of the case:  The petitioner challenges the validity of a consolidated show cause notice issued by the respondent for multiple tax periods i.e. 2017-18, 2018-19, 2019-20, and 2020-21 u/s 73 of the CGST Act, 2017. 

The Petitioner contended that u/s 73, the respondent cannot group multiple tax periods into a single show cause notice. Instead, the limitation period of three years applies separately to each assessment year, and the law mandates that action must be taken for each year individually.

Reliance is placed on a judgment of the Madras High Court in M/s. Titan Company Ltd. vs. Joint Commissioner of GST, where the court ruled against the consolidation of multiple tax periods. The petitioner also refers to the Supreme Court's ruling in State of Jammu and Kashmir vs. Caltex (India) Ltd., which held that each assessment year must be treated independently.

Held that: The court found merit in the petitioner's argument. Section 73(10) of the CGST Act sets out specific time limits for issuing show cause notices related to tax dues for each financial year. The consolidation of multiple years into a single notice is held to be improper.

It relied on the Supreme Court's decision in State of Jammu and Kashmir v. Caltex (India) Ltd. (AIR 1966 SC 1350), which established that assessments spanning different years must be treated separately, and each assessment order should be distinct.

The Court set aside the impugned show cause notice which consolidated tax periods from 2017-18 to 2020-21 and allowed the Revenue authorities to issue separate show cause notices for each assessment year in accordance with Section 73 of the CGST Act.

To read the complete judgment 2024 Taxo.online 2192