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Summary of order :-
There was challenge to the show cause notice issued during 2025 under Section 74 of the CGST Act, 2017 by CGST Nagpur-II Comm'te covering period from Apr'18 to Mar'24, saying that the petitioner has, during this period, suppressed taxable value, and thereby made short payments of GST.
After hearing both sides, the Division Bench of Hon'ble High Court of Bombay analysed that :-
I] The GST Scheme is based on annual returns for each financial year (even if returns are filed monthly in practice, the liability is tied to a specific financial year).
II] The statute fixes a five year time limit for demanding and recovering tax from due date for furnishing annual return for that year or from the date of erroneous return (Sections 73(10) and 74(10) of the CGST Act as applicable). This limit runs separately for each year.
III] If issued a single SCN covering multiple years, you would be aggregating different tax period with different due dates and different limitations, which the statute does not permit.
IV] Tax period is defined (Section 2(106) of the CGST Act) as the period, for which the return is required to be furnished. Return can be monthly or yearly, but the statute treats each financial year as a separate tax period for the purpose of assessment and recovery (Sections 39, 44, 37, 50, etc.).
V] Time limit operate year by year. Section 73(10) and 74(10) of the CGST Act fix the time limit to issue an assessment order within three years (Section 73) or five years (Section 74) from the last date for filing annual return for the year to which the tax dues relate.
VI] Consolidation would collapse these years, specific steps and grounds, harming the tax payers' ability to respond year by year and violating the explicit year wise structure of the statute.
After detailed discussion, Hon'ble HC has quashed and set aside the show cause notice.
Conclusion : As per above order, separate Show Cause Notices demanding GST/ITC be issued covering single financial year and avoid clubbing different periods in a single Notice.
{ The above summary is from a recent Bombay High Court Order } (This is for reference only, Original detailed order may be referred)
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There was challenge to the show cause notice issued during 2025 under Section 74 of the CGST Act, 2017 by CGST Nagpur-II Comm'te covering period from Apr'18 to Mar'24, saying that the petitioner has, during this period, suppressed taxable value, and thereby made short payments of GST.
After hearing both sides, the Division Bench of Hon'ble High Court of Bombay analysed that :-
I] The GST Scheme is based on annual returns for each financial year (even if returns are filed monthly in practice, the liability is tied to a specific financial year).
II] The statute fixes a five year time limit for demanding and recovering tax from due date for furnishing annual return for that year or from the date of erroneous return (Sections 73(10) and 74(10) of the CGST Act as applicable). This limit runs separately for each year.
III] If issued a single SCN covering multiple years, you would be aggregating different tax period with different due dates and different limitations, which the statute does not permit.
IV] Tax period is defined (Section 2(106) of the CGST Act) as the period, for which the return is required to be furnished. Return can be monthly or yearly, but the statute treats each financial year as a separate tax period for the purpose of assessment and recovery (Sections 39, 44, 37, 50, etc.).
V] Time limit operate year by year. Section 73(10) and 74(10) of the CGST Act fix the time limit to issue an assessment order within three years (Section 73) or five years (Section 74) from the last date for filing annual return for the year to which the tax dues relate.
VI] Consolidation would collapse these years, specific steps and grounds, harming the tax payers' ability to respond year by year and violating the explicit year wise structure of the statute.
After detailed discussion, Hon'ble HC has quashed and set aside the show cause notice.
Conclusion : As per above order, separate Show Cause Notices demanding GST/ITC be issued covering single financial year and avoid clubbing different periods in a single Notice.
{ The above summary is from a recent Bombay High Court Order } (This is for reference only, Original detailed order may be referred)
touch / click to view
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