AR Traders Vs Joint Commissioner (Bombay High Court)
The writ petition before the Bombay High Court challenged an order dated 26 September 2025 and two show cause notices dated 29 June 2025 and 18 September 2025 issued under Section 74 of the Central Goods and Services Tax Act, 2017. The notices alleged suppression of taxable value and short payment of CGST for multiple financial years by clubbing several tax periods together. One notice covered financial years 2018–19 to 2023–24, while the other covered 2019–20 to 2023–24.
The primary contention raised was that issuance of a consolidated show cause notice covering multiple financial years under Section 74 of the CGST Act is impermissible. The petitioner relied on a judgment of a Division Bench of the High Court at Goa, which had held that the GST statutory scheme does not permit consolidation of different tax periods or financial years in a single notice. That judgment examined the framework of assessment and recovery under the CGST Act and concluded that tax liability, limitation, and recovery operate year-wise, based on returns filed for each tax period or financial year.
The Court noted that the same principle had subsequently been reiterated by another Division Bench of the Bombay High Court, which reaffirmed that there is no scope for issuing consolidated show cause notices for multiple financial years under Section 74.
