The Bombay High Court ruled that a single GST show cause notice cannot encompass multiple financial years or tax periods, deeming such notices as lacking jurisdiction and therefore subject to being quashed. This decision came in the case of M/s Rithwik Projects Private Limited, which faced a consolidated GST demand notice covering the period from July 1, 2017, to August 31, 2021. The notice demanded ₹2.54 crore in GST, along with interest and penalties. Following personal hearings, an order was issued in December 2023 confirming the tax demand and imposing penalties under Section 122(2)(b). A subsequent recovery notice led the company to seek relief from the High Court.
The central issue was whether the GST department could issue a single show cause notice under Section 74 for multiple financial years. The Court, referencing its earlier decision in Milroc Good Earth Developers, emphasized that the GST framework regards each financial year as a separate tax period. The statutory provisions, including Sections 73 and 74, are tied to specific financial years, and consolidating them into a single notice violates the legislative scheme.
Read More: Madras High Court - Merely because an intimation was initially issued u/s 73, Department is not precluded from subsequently invoking Section 74 [Order attached]
The Court noted that any order issued without jurisdiction is void, and principles like waiver or admission of liability cannot legitimize it. As the show cause notice was jurisdictionally defective, the subsequent adjudication and recovery processes were invalid. The Court exercised its writ jurisdiction despite the existence of an alternate statutory remedy, underscoring the importance of jurisdictional validity in legal proceedings.
Order Date - 09 June 2026
Parties : M/s Rithwik Projects Private Limited Vs Union of India & Others
Facts -
- M/s Rithwik Projects Private Limited, engaged in infrastructure and construction activities, paid royalty and other charges to the Government for allocation, permission and leasing of natural resources during the period from 1 July 2017 to 31 August 2021.
- The GST department issued a consolidated show cause notice dated 29 June 2022 demanding GST of ₹2.54 crore along with interest and penalty for the entire period covering multiple financial years.
- After personal hearings, the Additional Commissioner passed an order dated 21 December 2023 confirming the tax demand, imposing equal penalty under Section 122(2)(b), and directing recovery.
- Subsequently, a recovery notice dated 21 November 2025 was issued to Punjab National Bank for debit of the petitioner’s account, leading the petitioner to approach the High Court.
Issue -
- Whether the GST department can issue a single show cause notice under Section 74 covering multiple financial years?
Order -
- The Court relied on its earlier decision in Milroc Good Earth Developers and held that the GST framework treats each financial year as a distinct tax period. The statutory scheme does not permit consolidation of multiple financial years into a single show cause notice for assessment and recovery proceedings.
- The limitation provisions under Sections 73 and 74 are linked to specific financial years and corresponding returns. Therefore, clubbing different tax periods in one notice defeats the legislative scheme and renders the proceedings jurisdictionally defective.
- The Court observed that an order passed without jurisdiction is a nullity in law. Consequently, principles such as waiver, acquiescence, estoppel or even admission of liability by the taxpayer cannot validate an otherwise void proceeding.
- Since the show cause notice itself lacked jurisdiction, the consequent adjudication order and recovery proceedings were also unsustainable. The existence of an alternate statutory remedy could not prevent the High Court from exercising writ jurisdiction in such circumstances.
