R A And Co Vs Additional Commissioner of Central Taxes (Madras High Court)
Issuance of a single show cause notice, for more than one financial year, is impermissible under GST Law: Madras HC
In case of Ms R A And Co Vs The Additional Commissioner Of Central Taxes MADRAS High court held that, SCN and related proceedings clubbing multiple years is impermissible in law and hence liable to set aside.
Fact of the case:- petitioner had been issued a single show cause notice and thereafter, passed a single assessment order for 6 financial years, viz., 2017-18, 2018-19, 2019-20, 2020-21, 2021-22 & 2022-23. Which is challenged in Writ by the petitioner.
Analysis of the court
Section 73(3) and 74 (3) of the CGST act refers to the issuance of notice for the “Tax period”. Further the word “tax period” in terms of Section 2(106) of the GST Act, ” means the period for which the return is required to be furnished”.
A reading of the provision of law, it would show that “tax period” means the period, for which, the return is required to be furnished. Therefore, based on the filing of returns, the tax period will be determined. In GST Law, an Assessee is required to file monthly return as well as annual return. Therefore, based on the monthly return, notice, under Section 73/74, can be issued, for any particular month. Likewise, based on the annual returns, notice, under Section 73/74, can be issued for the entire financial year or otherwise, as decided by the department, but not more than the relevant financial year.
