The Gauhati High Court ruled that a single GST show cause notice and adjudication order can validly cover multiple financial years, as long as the proceedings for each year are initiated and concluded within the limitation period prescribed under the CGST Act. This decision arose from cases involving M/s Tata Projects Limited, M/s Quantum Infratech, and Bitchem Asphalt Technologies Limited, all of whom challenged the validity of consolidated notices covering different financial years.
M/s Tata Projects Limited received show cause notices for FY 2017-18 to FY 2021-22 under Sections 73 and 74 of the CGST Act. M/s Quantum Infratech was issued a consolidated notice for July 2017 to March 2023, while Bitchem Asphalt Technologies Limited faced allegations of tax evasion for FY 2018-19 to FY 2020-21 under Section 74. All petitioners questioned if a Proper Officer could issue a single notice and order for multiple years.
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The Court clarified that Sections 73 and 74 do not require separate notices for each year, only that proceedings start within the limitation period. The limitation operates independently for each year but does not prohibit consolidating multiple years into one notice. The Court supported consolidated adjudication, citing legislative language and decisions from other High Courts, emphasizing administrative convenience and the avoidance of multiple proceedings.
Order Date - 08 June 2026
Parties: M/s Tata Projects Limited, M/s Quantum Infratech, Bitchem Asphalt Technologies Limited Vs Union of India and other GST authorities.
Facts -
- M/s Tata Projects Limited was subjected to GST audit for FY 2017-18 to FY 2021-22 and received show cause notices under Sections 73 and 74 covering multiple financial years. After the appellate authority confirmed the demand, the company approached the High Court challenging the validity of consolidated notices.
- M/s Quantum Infratech faced search and investigation proceedings, culminating in a consolidated show cause notice covering the period from July 2017 to March 2023. After adverse adjudication and appellate orders, it challenged the jurisdiction of the authorities to issue a combined notice.
- Bitchem Asphalt Technologies Limited received a notice under Section 74 clubbing FY 2018-19 to FY 2020-21 alleging suppression of taxable turnover and tax evasion exceeding ₹12.34 crore. Instead of pursuing the statutory appeal, it directly approached the High Court.
- All three petitioners raised a common legal question: whether the Proper Officer can issue a consolidated show cause notice and pass a consolidated order covering different financial years under Sections 73 and 74 of the CGST Act.
Issue -
- Whether the Proper Officer has jurisdiction under Sections 73 and 74 of the CGST Act, 2017 to issue a single show cause notice and pass a common adjudication order for multiple financial years.
Order -
- The Court observed that Sections 73(1) and 74(1) merely prescribe the circumstances in which proceedings can be initiated and do not expressly mandate issuance of separate notices for each financial year. The provisions only require that the proceedings must be commenced within the prescribed limitation period.
- The Court noted that the limitation under Sections 73(10) and 74(10) operates independently for each financial year, but such independent computation of limitation does not create a statutory prohibition against clubbing multiple years into one notice or order.
- Referring to Sections 73(3) and 74(3), the Court held that the legislature itself contemplated proceedings relating to "other periods" through statements deemed to be notices. This language indicates legislative acceptance of proceedings spanning multiple periods and supports consolidated adjudication.
- The Court agreed with the views of the Delhi, Karnataka and Allahabad High Courts that consolidated notices are legally permissible and disagreed with contrary decisions of the Kerala and certain Madras High Court judgments. According to the Court, administrative convenience and avoidance of multiple proceedings also support such an interpretation.
