Marfani Steel Impex Vs Principal Commissioner (Bombay High Court)
The Bombay High Court examined a challenge to a show cause notice dated 30 May 2025 issued under Section 74 of the Central Goods and Services Tax Act, 2017. The notice covered the period from April 2018 to March 2024 and alleged that the petitioner had suppressed taxable value and made short payments of Central GST. The core issue before the Court was whether the tax authorities were permitted to club multiple financial years or tax periods into a single show cause notice under Section 74.
The petitioner contended that such consolidation was impermissible under the statutory scheme of the CGST Act and relied on an earlier Division Bench judgment of the Bombay High Court at Goa, which held that the Act does not permit a composite assessment covering multiple financial years. That judgment had analysed the GST framework and concluded that tax liability, assessment, limitation, and recovery operate on a year-wise basis, linked to annual returns, and that consolidating different years with different limitation periods was contrary to the statute. The same view had subsequently been reiterated by another Division Bench of the Bombay High Court in a later case.
