Whether a single SCN or composite Assessment Order can be issued in relation to more than one financial year or tax period under Sections 73 and 74 of CGST Act, 2017

Whether a single SCN or composite Assessment Order can be issued in relation to more than one financial year or tax period under Sections 73 and 74 of CGST Act, 2017

Facts of the Case

• The petitioners are registered persons under the GST regime.
• They challenged assessment orders on grounds including lack of signature, absence of DIN number, and, primarily, the issuance of composite show cause notices and assessment orders covering multiple assessment years in a single proceeding.
• The assessment years and dates of impugned orders for each writ petition are as follows:
  • W.P.No.11028/2025: April 2018 to March 2022 (Order dated 21.07.2023)
  • W.P.No.11206/2025: July 2017-2018, 2018-2019, April 2019-Oct 2022 (Order dated 03.05.2023)
  • W.P.No.17671/2025: December 2021 to September 2022 (Order dated 13.01.2023; Appeal order dated 08.01.2025)
  • W.P.No.20792/2025: December 2018 to June 2020 (Order dated 16.04.2024)
• The petitioners sought to set aside the impugned orders on the ground that a single assessment order for more than one financial year is impermissible under Sections 73 and 74 of the GST Act, 2017.

Contentions of the Parties

• Petitioners:
  • Challenged assessment orders for lack of signature and DIN number.
  • Contended that composite show cause notices and assessment orders for multiple assessment years are not permitted under the APGST Act, 2017.
  • Argued that such orders violate Sections 73 and 74 of the GST Act, 2017.
• Respondents:
  • Supported the validity of composite assessment orders and show cause notices covering multiple financial years.

Issues

• Whether a single show cause notice or composite assessment order can be issued in relation to more than one financial year or tax period under the APGST Act, 2017, particularly in light of Sections 73 and 74.

Decision

A. Survey of Judicial Precedents on Composite Assessment Orders (p6–11)

• The Court noted that various High Courts have taken divergent views on the permissibility of composite assessment orders for multiple financial years.
• The High Courts of Karnataka, Madras, and Kerala have held that a single, composite assessment order cannot be passed for more than one financial year.
• The High Courts of Delhi and Bombay have held that a composite assessment order for more than one financial year is permissible, provided statutory time limits are observed. (p6)
• The Madras High Court in Titan Company Ltd. v. Joint Commissioner of GST and Central Excise, Salem held that a single show cause notice cannot be issued for more than one financial year, relying on the Supreme Court’s decision in State of Jammu & Kashmir v. Caltex India Ltd. (p7)
• The Karnataka High Court followed the Madras High Court’s view in M/s. Bangalore Golf Club v. Assistant Commissioner of Commercial Taxes (Enforcement), quashing show cause notices for five assessment years. (p8)
• The Madras High Court, in Ms. RA and Co v. The Additional Commissioner of Central Taxes, reiterated that show cause notices and assessment orders cannot be clubbed for more than one financial year, and quashed such orders. (p9)
• The Kerala High Court independently held that a single show cause notice cannot be issued for more than one assessment/financial year, and a composite show cause notice cannot be the basis for separate orders for each year. (p10)
• The Delhi High Court in Ambika Traders Through Proprietor Gaurav Gupta v. Additional Commissioner, Adjudication DGGSTI CGST, Delhi North (2025) taxcode.in 416 HC and the Bombay High Court took the contrary view, permitting composite notices and orders for multiple years. (p11)

B. Statutory Provisions and Scheme of the Act (p12–14)

• The Court set out the relevant statutory provisions: Sections 2(97) (definition of “return”), 2(106) (“tax period”), 39 (furnishing of returns), 44 (annual return), 73 and 74 (determination of tax not paid or short paid, etc.). (p12)
• The scheme of the Act is that GST is payable on supplies of goods and services, assessed and calculated as per the Act. Sections 62 and 63 (assessment of non-filers and unregistered persons) are not relevant for this case. The primary provisions for determination of tax are Sections 73 and 74. (p13)
• Section 73 applies to cases other than fraud or willful misstatement; Section 74 applies to cases involving fraud, willful misstatement, or suppression of facts. Both require issuance of notice to the registered person. (p14)

C. Interpretation of “Any Period” and “Tax Period” in Sections 73 and 74 (p15–17)

• The Court considered whether notices and orders must relate to a specified period or can cover any period, and whether a single order can be issued for multiple periods. (p15)
• Section 73(3) uses the term “any period”; the Delhi High Court interpreted this as permitting notices for any length of period. The Madras High Court, however, noted that Section 73(4) uses “such tax periods”, and, referring to the definition of “tax period” in Section 2(106), concluded that “any period” must be understood as a tax period (month or year, as applicable). (p16)
• The Court agreed with the Madras High Court’s interpretation, noting that the interplay between Sections 73(3) and 73(4) was not considered by the Delhi High Court. The Court found the Madras view to be correct. (p16)
• Section 74(3) is similar to Section 73(3), but Section 74(4) does not use “such tax period”. The Court held that this difference does not affect the interpretation. (p17)
• The Court emphasized that statutory interpretation should not render other provisions otiose or reduce their scope. Allowing composite orders would impact the rights of registered persons under Section 128 (compounding of offences) and the right to appeal under Sections 73 and 74. (p17)

D. Final Determination and Relief (p18–19)

• The Court held that a single show cause notice or composite assessment order cannot be passed for more than one tax period—either a month (if assessment is before the due date for annual return) or a year (if after the due date for annual return). (p18)
• Accordingly, the writ petitions were allowed, the impugned orders set aside, and liberty granted to the respondents to initiate fresh proceedings for each assessment year separately. The period from the date of the impugned order to the date of receipt of this order is to be excluded for limitation purposes. No order as to costs; pending miscellaneous applications closed. (p19)

Conclusion

The Court concluded that under the APGST Act, 2017, a single show cause notice or composite assessment order cannot be issued for more than one tax period (month or year, as applicable). The impugned composite orders were set aside, with liberty to the authorities to initiate fresh proceedings for each assessment year separately, and the period between the impugned order and receipt of this order is excluded for limitation purposes.

Disposition

The writ petitions are allowed; the impugned orders are set aside. Liberty is granted to the respondents to initiate fresh proceedings for each assessment year separately. No order as to costs. Pending miscellaneous applications, if any, are closed.

Source: S J Constructions and Ors. v. Assistant Commissioner and Ors., (2025) taxcode.in 674 HC