Chimney Hills Education Society Vs Additional Commissioner of Central Tax (Karnataka High Court)
The petition sought multiple reliefs, including the quashing of a show cause notice dated 05.08.2024 issued under Section 74 of the Act for the tax period from July 2017 to 2023, along with the summary of the notice (DRC-01), a notice of personal hearing dated 21.08.2024, and summons dated 16.05.2024. The petitioner challenged these proceedings and requested that they be set aside.
After hearing the learned senior counsel for the petitioner and the counsel for the revenue, and upon perusal of the material on record, the Court identified the central issue for determination. The primary question was whether the impugned show cause notice and its summary were invalid because they clubbed or consolidated tax demands for multiple financial years, specifically covering the period from 2017 to 2023, into a single notice, and whether such notices were liable to be quashed on this ground.
The Court examined an earlier judgment delivered by a co-ordinate Bench in a similar matter involving consolidated show cause notices issued for multiple assessment years. In that case, the petitioner had challenged notices covering tax periods from 2019–20 to 2023–24 on the ground that combining several financial years into one notice was impermissible under the statutory framework. It was argued that under the relevant provisions, actions must be completed within the prescribed time limits applicable to each assessment year, and that the limitation period applies separately to each year. Therefore, separate notices should be issued for each assessment year rather than a single consolidated notice.
