The Central Board of Indirect Taxes & Customs (CBIC) has issued a circular clarifying that consolidated Show Cause Notices (SCNs) for multiple financial years are legally permissible under Sections 73 and 74 of the CGST Act. This is because the law allows notices for “any period,” thus enabling the clubbing of multiple years when the grounds are identical. The circular emphasizes that the limitation periods of three years under Section 73(10) and five years under Section 74(10) apply individually to each financial year, ensuring that the consolidation does not affect statutory timelines.
The CBIC highlights the administrative efficiency and taxpayer convenience of consolidated SCNs, as they reduce duplication and streamline the adjudication process when the same issues span several years. The circular also addresses a common misinterpretation of the term “tax period,” clarifying that it pertains to return filing, not demand notices, which can cover more than one financial year if the facts are consistent.
Judicial support for consolidated SCNs is noted, with the Delhi High Court's decision in Ambika Traders (2025) upholding their validity, particularly in cases involving fraud or ITC-related investigations. The circular acknowledges that while some High Courts have ruled against this practice, these decisions are jurisdiction-specific and not binding across India. The GST Policy Wing supports the use of consolidated SCNs as legally valid and efficient, provided that the statutory limitations for each year are observed.
Date: 14th September 2025
Issued By: Central Board of Indirect Taxes & Customs (CBIC)
Order / Clarification –
- Consolidated SCNs are legally permissible:
Sections 73(1), 73(3), 74(1) and 74(3) of the CGST Act do not restrict issuance of Show Cause Notices (SCNs) to a single financial year. The statute allows notices “for any period”, enabling clubbing of multiple years where grounds are identical. - No violation of limitation timelines:
Even when years are consolidated, limitation under Sections 73(10) (3 years) and 74(10) (5 years) applies individually to each financial year. Consolidation is only procedural and does not extend or override statutory timelines. - Administrative efficiency & taxpayer convenience:
A single consolidated SCN avoids duplication, saves time, and reduces repeated appearances. It streamlines adjudication for both the taxpayer and the department, especially when issues span multiple years. - Misinterpretation of “tax period” addressed:
The term “tax period” (Section 2(106)) relates only to return filing, not to issuance of demand notices. For SCNs, the law permits notices for “any period,” meaning more than one financial year when facts and grounds are common. - Judicial support for consolidated SCNs:
The Delhi High Court in Ambika Traders (2025) upheld the validity of consolidated SCNs, especially in fraud or ITC-related investigations where transactions across years must be analysed collectively to establish patterns. - Consolidation often necessary in fraud cases:
Fraudulent ITC availment typically spans multiple years, and issuing year-wise notices may defeat investigation objectives. A consolidated SCN helps present the complete transactional trail and modus operandi. - Contrary High Court rulings not binding pan-India:
Decisions like Titan Company Ltd. (Madras HC) and Tharayil Medicals (Kerala HC) are limited to their jurisdictions. Other High Courts (Delhi, Gujarat, Kerala in later rulings, etc.) have upheld consolidated SCNs. - Overall policy position:
The GST Policy Wing affirms that consolidated SCNs covering multiple years are legally valid, procedurally efficient, and consistent with statutory provisions—provided limitation for each year is individually complied with.
