The Karnataka High Court has held that the practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act.
The bench of Justice S.R.Krishna Kumar has observed that Section 73(10) of the CGST Act mandates a specific time limit from the due date for furnishing the annual return for the financial year to which the tax due relates. The law stipulates that particular actions must be completed within a designated year, and such actions should be executed in accordance with the law’s provisions.
Table of Contents
Background
The petitioner/assessee has challenged the show cause notice and the order issued by the respondent/departmnet for the tax periods 2017-18, 2018-19, 2019-20 and 2020-21.
Arguments
The petitioner contended that these notices, issued under Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, are flawed due to the improper consolidation of multiple tax periods into a single show cause notice.
The petitioner contended that the department cannot issue a common show cause notice by grouping the tax periods from 2017-18 to 2020-21. The petitioner asserts that under Section 73 of the CGST Act, a specific action must be completed within the relevant year, and the limitation period of three years applies separately to each assessment year.
The petitioner argued that clubbing multiple tax periods in a single notice is impermissible, and separate notices should have been issued for each assessment year under Section 73 (1).
Cases Relied
The petitioner relied on the judgement of the Madras High Court in the case of M/s. Titan Company Ltd. vs. Joint Commissioner of GST. The Madras High Court, while addressing a similar issue, relied on the Supreme Court’s decision in State of Jammu and Kashmir and Others vs. Caltex (India) Ltd.. The Apex Court held that where an assessment encompasses different assessment years, each assessment order can be distinctly separated and must be treated independently.
Conclusion
The court quashed the show cause notice issued by the department for the tax periods 2017-18, 2018-19, 2019-20 and 2020- 21.
The court while allowing the writ petition held that the order, however, does not preclude the respondent from issuing separate show cause notices for each assessment year in compliance with Section 73 of the CGST Act, 2017.
Similar Cases On Consolidated Show Cause Notice Covered By Jurishour
GST DEPT. CAN’T ISSUE SINGLE SCN FOR MULTIPLE ASSESSMENT YEARS: KARNATAKA HIGH COURT
The Karnataka High Court has held that the GST department’s practice of issuing a single and consolidated show cause notice (SCN) for multiple assessment years contravenes the provisions of the Central Goods and Service Tax Act, 2017 (CGST Act).
Case Details
Case Details
Case Title: Veremax Technologie Services Limited Versus The Assistant Commissioner Of Central Tax
Case No.: Writ Petition No.15810 Of 2024 (T-Res)
Date: 04/09/29024
Counsel For Petitioner: Shankare Gowda M.N.
Counsel For Respondent: Unnikrishnan M.
