Vidarbha Nickel Limited Vs Commissioner (Bombay High Court)
Bombay HC Quashes GST Notice for Clubbing Multiple Financial Years Under Section 74; Consolidated GST Show Cause Notices Across Tax Years Not Permissible; Bombay High Court Rejects Multi-Year GST Demand Notice Due to Separate Limitation Periods; GST Liability Must Be Assessed Year-Wise, Not Through Consolidated Notices.
The Bombay High Court considered a challenge to a show cause notice dated 27.06.2025 issued under Section 74 of the Central Goods and Services Tax Act, 2017 for the financial years 2018-19 to 2020-21. The notice alleged suppression of taxable value and short payment of GST by the petitioner.
The petitioner argued that clubbing multiple financial years in a single notice under Section 74 of the CGST Act was not permissible. Reliance was placed on the Division Bench judgment of the Goa Bench of the Bombay High Court in Milroc Good Earth Developers Vs. Union of India & Ors., where the Court held that the statutory scheme under the CGST Act does not permit consolidation of different financial years or tax periods in a single show cause notice. The Court in that case observed that tax liability under the GST regime is linked to returns filed for each tax period and that Sections 73 and 74 prescribe separate limitation periods for each financial year. It was held that the Act contemplates assessment and recovery on a year-wise basis and there is no scope for combining multiple years in one notice.
