Eskay Trans. Vs Joint Director (Madras High Court)
The Madras High Court quashed a show cause notice dated 06.06.2025 issued to the petitioner after holding that it wrongly clubbed multiple financial years (2018–2025) into a single notice, which is without jurisdiction and impermissible under the GST Act. The Court relied on its earlier common order dated 21.07.2025, which held that show cause notices must be issued separately for each financial year based on the relevant tax period or annual return. It reiterated that no single show cause notice can cover more than one financial year. Accordingly, the Court set aside the impugned notice, directed the respondents to immediately de-freeze the petitioner’s bank account upon production of the order, and granted the authorities liberty to initiate separate proceedings for each financial year in accordance with law.
The Madras High Court allowed the writ petition challenging Show Cause Notice No. 003/2025 dated 06.06.2025, holding that the notice was issued without jurisdiction because it clubbed multiple financial years (2018–2025) into a single show cause notice, which is impermissible under the GST Act. The Court noted that both parties agreed that the issue had already been settled by its common order dated 21.07.2025 in a batch of writ petitions. In that decision, the Court had held that a show cause notice must be issued based on the relevant tax period, and where annual returns have been filed, the notice should relate to the concerned financial year. If issued before the filing of annual returns, it may be based on monthly returns. However, a single notice cannot be issued for more than one financial year, as such clubbing is not permitted by law. Applying the earlier ruling, the Court concluded that the impugned notice covering 2018–2025 was without jurisdiction and therefore liable to be quashed. The Court quashed the show cause notice, directed the respondents to de-freeze the petitioner’s bank account immediately upon production of the order, and granted the authorities liberty to commence separate proceedings for each financial year.
