2026-VIL-53-BOM
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SGST High Court Cases

GST – Validity of clubbing of Show Cause Notice of multiple tax periods, limitation period for demand and recovery of tax – Respondent issued under Section 74 of the CGST Act, 2017 alleging suppression of taxable value and short payment of tax for the financial years 2018-19 to 2023-24 - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act – HELD - Consolidation of multiple financial years/tax periods in a show cause notice under Section 74 of the CGST Act is not permissible. The GST scheme is based on annual returns for each financial year, and the statute fixes a separate five-year time limit for demanding and recovering tax from the due date for furnishing the annual return for that year or from the date of erroneous return. Issuing a single show cause notice covering multiple years would aggregate different tax periods with different due dates and different limitations, which the statute does not permit - Tax period is defined under Section 2(106) of the CGST Act as the period, for which the return is required to be furnished. Return can be monthly or yearly, but the statute treats each financial year as a separate tax period for the purpose of assessment and recovery - The niceties of the GST scheme were not considered by the Delhi High Court in the case of Mathur Polymers Vs. Union of India, relied upon by the respondents - The impugned order and show cause notices are quashed. The respondents were, however, granted liberty to re-issue the notices strictly in terms of the provisions of Section 74 of the CGST Act, if there was no other legal impediment – The petition is partly allowed
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