X L Interiors Vs Deputy Commissioner (Intelligence) (Kerala High Court)
Conclusion: Since the word ‘period’ used in Sub Section (3) of Section 74 did not relate to any financial year but only to a period for which a notice to be issued under Sub Section (1) of Section 74, therefore, it was difficult to hold that the bunching of show cause notices was illegal and contrary to the provisions of Section 74 of the CGST Act. Bunching of show cause notices did not cause any prejudice to assessee as it was open to assessee to take up any contention peculiar to any particular year in the reply to the show cause notice.
Held: Assessee had approached this court being aggrieved by the fact that a single show cause notice had been issued invoking the provisions of Section 74 alleging suppression of turnover etc., in six financial years, namely, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23. Assessee was given a short time, i.e. till 21.10.2024, to reply to the show cause notice which amounted to violation of principles of natural justice. Authority contended that there was nothing in the wording of Sections 73 and 74 of the CGST/SGST Acts which would indicate that the contention of assessee that there could not be a consolidated show cause notice for several financial years was to be accepted. It was held that contention of authority that sub Section (3) of Section 74 do not indicate that the notice to be issued under Sub Section (1) of Section 74 must be for one particular year and on the contrary refers to a ‘period’. Therefore, it was difficult to hold that the bunching of show cause notices was illegal and contrary to the provisions of Section 74 of the CGST Act. Bunching of show cause notices did not cause any prejudice to assessee as it was open to assessee to take up any contention peculiar to any particular year in the reply to the show cause notice. Coming to the contention of assessee that assessee had been given a very short time to reply to the show cause notice which runs to 1622 pages (including the documents relied upon) it was concluded that some reasonable time must be permitted to assessee to file a reply to the show cause notice. Accordingly, it was directed that the time for filing a reply to Ext.P1 show cause notice should be extended till 21.11.2024. Since the extension of time was at the request of assessee, any limitation for passing orders for any of the financial years would also stand extended by similar period i.e. the period from 21.10.2024 (last date for filing reply as per show cause notice) till 21.11.2024 would stand excluded.
