The Bombay High Court addressed the validity of consolidated GST show cause notices that cover multiple financial years, as challenged by M/s Rollmet LLP and other petitioners. These notices were issued under Sections 73 and 74 of the CGST Act. The petitioners argued that the GST law mandates year-wise assessments and separate notices for each financial year, referencing prior rulings from the Bombay High Court Goa Bench and other state high courts which struck down similar composite notices.
Conversely, the Revenue authorities cited judgments from the Delhi and Allahabad High Courts that upheld such consolidated notices, particularly for fraudulent Input Tax Credit cases spanning multiple years. The primary issue was whether a single show cause notice could lawfully encompass multiple financial years under the CGST Act.
The court recognized conflicting judicial opinions across various high courts regarding the legality of these notices, suggesting the need for a Larger Bench to reconsider the issue. The court observed that the language in Sections 73(1), 73(3), 74(1), and 74(3), using terms like “any period” and “such periods,” suggests no legislative intent to limit proceedings to a single financial year.
Read More: Madras High Court: GST authorities cannot pass two separate assessment orders for same taxpayer, same discrepancies, and same assessment year; Permitted to continue proceedings only of later assessment order [Order attached]
The court further noted that the limitation provisions in Sections 73(10) and 74(10) pertain to adjudication orders rather than the issuance of notices, allowing for consolidated proceedings if each year's limitation is independently observed. The court emphasized the practicality of addressing interconnected transactions over multiple years in one proceeding to enhance the effectiveness of GST fraud investigations.
Order Date - 17 April 2026
Parties: M/s Rollmet LLP, Shemaroo Entertainment Ltd., Uttam Movies, Everest Fleet Pvt. Ltd., Golden Bullion, Renault India Pvt. Ltd., State Bank of India, MHADA, Runwal Enterprises Ltd., Oasis Realty and others. Vs Union of India, Central Board of Indirect Taxes and Customs (CBIC), State of Maharashtra, CGST authorities and DGGI authorities
Facts -
- M/s Rollmet LLP and several other petitioners received consolidated GST show cause notices under Sections 73 and 74 of the CGST Act covering multiple financial years in one proceeding.
- The petitioners argued that GST law follows a year-wise assessment and limitation structure, therefore separate notices were mandatory for each financial year and clubbing years together was without jurisdiction.
- The taxpayers relied heavily on the Bombay High Court Goa Bench decision in Milroc Good Earth Developers and similar rulings from Kerala, Madras and Karnataka High Courts which had earlier quashed composite notices covering several years.
- The Revenue authorities opposed the petitions by relying on Delhi High Court and Allahabad High Court judgments which upheld consolidated notices, especially in cases involving fraudulent Input Tax Credit transactions spread across several years.
Issue -
- Whether a single consolidated show cause notice under Sections 73 and 74 of the CGST Act can validly cover multiple financial years?
Order -
- The Court noted that there was a clear conflict of judicial opinion among various High Courts on the legality of consolidated GST show cause notices. While Bombay Goa Bench, Madras and Kerala High Courts had invalidated such notices, Delhi and Allahabad High Courts had upheld them. Because of this divergence, the issue required reconsideration by a Larger Bench.
- The Court prima facie observed that Sections 73(1), 73(3), 74(1) and 74(3) use expressions like “any period” and “such periods”, which indicate that the legislature did not intend to restrict proceedings only to one financial year. According to the Bench, reading such restriction into the statute would amount to rewriting the law.
- The Bench further observed that limitation under Sections 73(10) and 74(10) applies to passing of adjudication orders and not necessarily to issuance of show cause notices. Therefore, the limitation provision by itself may not prohibit issuance of a consolidated notice covering different periods, provided each year’s limitation is independently respected.
- The Court also highlighted the practical realities of GST fraud investigations, especially fraudulent Input Tax Credit chains, where transactions are interconnected across several financial years. The Bench observed that examining such transactions through one consolidated proceeding could make the statutory machinery more workable and effective.
