2026-VIL-373-BOM
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SGST High Court Cases

GST - Clubbing of show cause notice for multiple financial years/tax periods - Petitioner challenged a show cause notice issued under Section 74 of the CGST Act, 2017 by the respondent authorities, covering the period from financial years 2018-19 to 2022-23, alleging suppression of taxable value and short payment of GST - Whether the authorities can issue a consolidated show cause notice covering multiple financial years/tax periods – HELD - The Division Bench in in M/s. Milroc Good Earth Developers Vs. Union of India & Ors. case has held that the authorities cannot issue a consolidated show cause notice covering multiple financial years/tax periods under Section 74 of the CGST Act - 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. If a consolidated notice is issued covering multiple years, it would aggregate different tax periods with different due dates and different limitations, which the statute does not permit - The judgment of the Delhi High Court in M/s Mathur Polymers Vs. Union of India & Ors., which had allowed the issuance of a consolidated notice in cases involving allegations of fraudulent availment of ITC is distinguished. The judgments of the Division Bench will prevail, as they were subsequent to the Delhi High Court judgment and have not been stayed or overruled by the Supreme Court - The impugned show cause notice is quashed and set aside. However, the respondents are at liberty to re-issue notice strictly in terms of the provisions of Section 74 of the CGST Act, if there is no other legal impediment – The petition is disposed of
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