Mehadia & Sons C & F Division Vs Assistant Commissioner of CGST & Central Excise (Bombay High Court)
Summary: The Bombay High Court, Nagpur Bench, considered a challenge to a show cause notice dated 24/04/2025 issued under Section 73 of the CGST Act, concerning Financial Years 2021-22 to 2023-24. The notice alleged suppression of taxable value and consequent short payment of Central GST.
The petitioner contended that clubbing the periods while issuing a notice under Section 73 was impermissible and relied upon the Bombay High Court judgment in M/s. Milroc Good Earth Developers Vs. Union of India & Ors., Writ Petition No. 2203/2025, decided on 9/10/2025. The Court in that case had held that there was no scope for consolidating various financial years/tax periods while issuing a show cause notice under Section 73. The Court also noted the subsequent decision in Rite Water Solutions (India) Ltd. Vs. Joint Commissioner, CGST & Central Excise, Nagpur and Ors., Writ Petition No. 466/2025, decided on 28/11/2025, which reiterated that position.
The respondents opposed the contention and relied upon M/s Mathur Polymers Vs. Union of India & Ors., W.P.(C) 2394/2025, decided by the Delhi High Court on 26/8/2025. The Delhi High Court had held that, in cases involving allegations of fraudulent availment of ITC where transactions were spread across several years, a consolidated notice could be required to establish the alleged illegal modality adopted by businesses and entities, and that the legislation did not itself prevent issuance of an SCN or order for multiple years in a consolidated manner. The respondents further submitted that the Delhi High Court judgment had been challenged before the Supreme Court in Special Leave Petition (Civil) Diary No. 50279/2025, but the Supreme Court declined to interfere.
