The Madras High Court in the case of SMT R ASHAARAJAA, J. RAJENDRAN, R. DEEPAK VIGNESHVAR AND OTHERS VERSUS THE SENIOR INTELLIGENCE OFFICER, THE SUPERINTENDENT OF CENTRAL TAX CGST CENTRAL EXCISE AND OTHERS vide W. P. Nos. 29716, 29720, 29726 & 34137 of 2024 & 2270, 3597, 7616, 7644, 7646, 7766, 9000, 9001, 9100, 12084, 12988, 13600, 13959, 14805, 15215, 15499, 16111, 16840, 16845, 16852, 19849, 19857, 19861, 20367, 22277, 22281 & 22808 of 2025 and And W.M.P.Nos.32378, 32375, 32384, 36953 & 36954 of 2024 & 2609, 2610, 3988, 8544, 8573, 8576, 8722, 10108, 10111, 10215, 18478, 13647, 13648, 14492, 15262, 1 5713, 1 6709, 17165, 17511, 18242, 19089, 19096, 19108, 22372, 22382, 22391, 22955, 25062, 25061, 25069, 25067 & 25627 of 2025 dated 21.07.2025, held that issuance of composite SCNs covering more than one financial year is illegal and without authority of law. GST Department must issue separate SCNs for each financial year, in line with monthly or annual returns as per Section 2(106). Further, hold that clubbing violates statutory scheme, prejudices assessee’s rights to amnesty, compounding, and appeals. Relied upon judgments in the case of Titan Company Ltd. v. JC, GST & CE (Madras), Tharayil Medicals v. DC, SGST.
Facts of the case: The petitioners in this batch of writ petitions, were served with composite Show Cause Notices by the department under Section 73 or Section 74 of the CGST Act, covering more than one financial year in a single notice. Th e notices alleged short payment or non-payment of tax, or wrongful availment of Input Tax Credit (ITC), across multiple financial years—typically spanning FY 2017–18 to FY 2021–22.
The petitioners argued that each financial year under GST is an independent taxable unit, and the issuance of a single SCN for multiple years is impermissible in law. Such composite SCNs defeat the statutory limitation prescribed under Sections 73(10) and 74(10), which compute time from the due date of the annual return for each year. Also, the tax period under Section 2(106) of the CGST Act is defined as the period for which a return is required, which under the CGST Rules is monthly or annual, not multi-year.
Further, contended that clubbing of demands denies the petitioners the opportunity to avail amnesty schemes declared by the government for specific years. Restricts the right to compound offences under Section 138, which is available on a per-year basis. Also, complicates appeals, which are otherwise granted year-wise under the Act. Issuance of such consolidated notices causes procedural hardship and is ultra vires the scheme of GST law.
The respondents argued that the term “any period” in Sections 73 and 74 allows the department to cover multiple years in one SCN, so long as it is within the overall limitation period. There is no express bar in the Act preventing issuance of composite notices. The issuance of a single SCN is done for administrative convenience and efficiency.
Issue:
Whether the issuance of a single consolidated Show Cause Notice under Sections 73 or 74 of the CGST Act, 2017 covering more than one financial year is legally valid, or whether the law mandates issuance of separate SCNs for each financial year/tax period.
Held that:
The Court held that issuing a single SCN covering more than one financial year is impermissible under the CGST Act, because each financial year is a distinct taxable unit, and the cause of action for each year arises separately.
Thus, the practice of “bunching” tax periods violates the structural framework of the Act and the specificity of limitation periods prescribed under the law. The Court stated that, “The statute envisages a year-wise assessment and adjudication. Issuance of a consolidated notice frustrates the very purpose of the scheme under the CGST Act.”
Further, the Court clarified that each financial year has its own due date, and hence, limitation must be computed independently. ❝ The authorities cannot be permitted to circumvent the statutory limitation periods by issuing a composite notice spanning multiple years. ❞
Also, the Court rejected the department’s contention that since the law allows notice for “any period,” it is legally permissible to issue a single notice for several years. The Court stated that “The words “any period” must be interpreted in light of the definition of “tax period” [Section 2(106)], which refers to monthly or annual return periods. “Any period” cannot be stretched to include multiple distinct tax years unless specifically permitted by statute.
The Court emphasized that issuing consolidated SCNs affects the statutory rights of taxpayers i.e. Right to file separate appeals for each year under Section 107, Right to compounding or amnesty benefits, which are typically year-specific, Right to make partial admission for one year while contesting others — which is precluded when years are clubbed.
As a result, the Court quashed the impugned SCNs covering multiple financial years. The authorities were directed to issue separate notices for each financial year, if permissible under the law and within limitation.
Conclusion
This significant ruling by the Madras High Court reinforces taxpayers’ rights against procedural overreach. If you’ve received a GST show cause notice covering multiple financial years, it may be invalid. At IndTax Filings, we help you assess, appeal, and respond strategically. Contact us for legal consultation and expert GST notice handling.
