The Delhi High Court, in its judgment delivered on March 16, 2026, addressed the legality of issuing consolidated show cause notices (SCNs) covering multiple financial years under the Central Goods and Services Tax Act, 2017 (CGST Act). The petitioner, a company engaged in the supply and installation of CCTV surveillance systems, challenged an Order-in-Original (OIO) confirming substantial GST demands and penalties, contending that the consolidation of multiple years into a single adjudicatory exercise was impermissible and prejudicial.
The petitioner argued that the SCN and OIO improperly combined several financial years, despite the dispute centering on the classification and applicable tax rate for its supplies, rather than on fraudulent availment or utilization of Input Tax Credit (ITC). The petitioner maintained that each financial year should have been adjudicated separately, as the issues involved distinct causes of action, returns, limitation periods, and legal defenses. Reliance was placed on certain Bombay High Court decisions that favored year-wise adjudication in non-fraud cases, distinguishing them from cases involving ITC fraud.
The respondents, however, relied on the Delhi High Court’s earlier decision in Ambika Traders, which upheld the issuance of consolidated SCNs for multiple years under both Sections 73 and 74 of the CGST Act. The petitioner sought to distinguish Ambika Traders on the basis that it pertained to fraudulent ITC cases, whereas the present matter involved only a classification dispute. The petitioner also requested the Court to defer its decision in light of pending proceedings before the Supreme Court on similar issues.
After considering the submissions, the Court clarified that it would not enter into the merits of the classification or fraud allegations, as these were matters for the statutory appellate authority. The Court emphasized the well-established principle that writ jurisdiction should not be invoked when an efficacious alternative remedy exists, citing Supreme Court precedents such as Whirlpool Corporation v. Registrar of Trademarks and Harbanslal Sahnia v. Indian Oil Corporation Ltd.
On the core issue, the Court held that its decision in Ambika Traders was not confined to cases involving fraudulent ITC. The Court reproduced relevant statutory provisions and extracts from Ambika Traders, which interpreted the language of Sections 73 and 74—specifically the phrases “for any period” and “for such periods”—as permitting consolidated notices for more than one financial year. The Court further noted that the Special Leave Petition against Ambika Traders had been dismissed by the Supreme Court, reinforcing its binding nature.
Addressing the petitioner’s reliance on contrary Bombay High Court decisions and the pendency of related matters before the Supreme Court, the Court reiterated that High Courts are bound to follow the law as it stands, unless specifically directed otherwise by the Supreme Court. The Court cited Union Territory of Ladakh v. Jammu & Kashmir National Conference to underscore that the existence of pending references or review petitions does not diminish the binding effect of existing precedent.
In conclusion, the Delhi High Court declined to interfere with the impugned OIO, dismissed the writ petition, and granted liberty to the petitioner to pursue statutory appellate remedies. The Court expressly refrained from expressing any opinion on the merits of the underlying tax dispute, leaving all rights and contentions open for adjudication in appropriate proceedings.
Case Reported at:
Case Name: Technosys Integrated Solutions Pvt. Ltd. v. Union of India and Ors.
Case Citation: (2026) taxcode.in 740 HC
