Century Galaxy Developers Limited Vs Union of India (Karnataka High Court)
The writ petition challenged a show cause notice dated 29.05.2024 issued by the tax authorities on the ground that it was illegal, without jurisdiction, and contrary to the provisions of the CGST/KGST Acts. The petitioner sought quashing of the impugned notice and all consequential proceedings, along with a direction restraining the authorities from proceeding further on its basis.
The Court noted that although several arguments were raised by both sides, the controversy was directly and squarely covered by an earlier judgment of the same Court in M/s Pramur Homes and Shelters v. Union of India and Others. In that decision, the Court had framed and answered two key issues: whether multiple tax periods or financial years could be clubbed, consolidated, or combined in a single composite show cause notice under Sections 73 or 74 of the CGST/KGST Acts, and whether such a composite notice warranted interference.
In Pramur Homes and Shelters, the Court had unequivocally held that clubbing or consolidation of multiple tax periods or financial years into a solitary or composite show cause notice under Sections 73 or 74 was illegal, invalid, impermissible, and without jurisdiction. The Court further held that such notices were contrary to the statutory scheme of the CGST/KGST Acts. Consequently, show cause notices covering multiple financial years in a single notice were quashed, while liberty was reserved to the authorities to initiate fresh proceedings in accordance with law.
