Veremax Technologie Services Limited Vs Assistant Commissioner of Central Tax (Karnataka High Court)
The Karnataka High Court considered a writ petition challenging a show cause notice dated 03.05.2024 and an order dated 21.11.2023 issued under Section 73 of the Central Goods and Services Tax Act, 2017, for the tax periods 2017–18, 2018–19, 2019–20 and 2020–21. The petitioner contended that the respondent had improperly consolidated multiple assessment years into a single show cause notice. It was argued that Section 73 requires action to be taken separately for each assessment year, with the limitation period of three years applying independently to each year. According to the petitioner, clubbing several tax periods into one notice was impermissible and separate notices should have been issued under Section 73(1).
The Court examined the scope of Section 73, including Section 73(10), which prescribes specific timelines linked to the due date for furnishing the annual return of the relevant financial year. Reliance was placed on a Madras High Court judgment that followed a Supreme Court decision holding that assessments relating to different years must be treated as distinct and separable. Applying these principles, the Court held that the respondent erred in issuing a consolidated show cause notice covering multiple assessment years. Such consolidation was found to be contrary to the CGST Act and established legal precedent. Consequently, the Court held the impugned show cause notice to be fundamentally flawed and quashed it. However, it clarified that the respondent is not barred from issuing separate show cause notices for each assessment year in accordance with Section 73 of the CGST Act, 2017.
