Kanaka Reddy Seerapu Vs Union of India (Andhra Pradesh High Court)
Summary: The Andhra Pradesh High Court set aside the composite order dated 03.02.2026 passed under Section 74 of the Central Goods and Services Tax Act for the tax periods 2019-20 and 2020-21. The petitioner, a registered firm, challenged the order contending that a single composite assessment order covering multiple tax periods was impermissible under the CGST Act. The petitioner relied on the Andhra Pradesh High Court’s co-ordinate Bench decision in S.J. Constructions v. The Assistant Commissioner & Others (W.P No.11028 of 2025 & batch), dated 17.09.2025. In that decision, the Court held that a single show cause notice or composite assessment order cannot cover more than one tax period in the circumstances considered, noting the effect on statutory rights including the benefit under Section 128 of the APGST Act and the right to appeal against assessment orders under Sections 73 or 74. The learned Standing Counsel did not dispute the legal position or the factual aspect concerning the composite order. Following the cited co-ordinate Bench decision, the High Court set aside the impugned order dated 03.02.2026. The Court nevertheless granted the second respondent liberty to issue separate orders for each assessment year and proceed with the assessments concerning the tax periods in question after giving due opportunity to the petitioner and in accordance with law. The period from the date of the impugned order until the date of receipt of the High Court’s order was directed to be excluded for limitation purposes. The writ petition was accordingly disposed of, with no order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
Heard learned counsel for the petitioner and Ms. Santhi Chandra, learned Senior Standing Counsel for Income Tax Department appearing for respondent Nos.2 & 3. With their consent, the writ petition is disposed of at the stage of admission.
2. Petitioner a registered firm, is served with composite order dated 03.02.2026 under Section 74 of Central Goods and Service Tax Act (in short „CGST Act‟). Aggrieved by the said order dated 03.02.2026 passed by the 2 nd respondent, the present writ petition is filed.
3. Learned counsel for the petitioner referring to various averments in the affidavit filed in support of the writ petition, inter alia contends that the impugned order of the 2 nd respondent for the tax period 2019-20 and 2020-21 covering multiple tax periods is impermissible in Law under the provisions of CGST Act. He also placed reliance on the decision of a Co-ordinate Bench of this Court in S.J. Constructions v. The Assistant Commissioner & Others (W.P No.11028 of 2025 & batch), dated 17.09.2025, wherein, it was held as follows:
“17. Section 74(3) is in parimateria with Section 73(3). However, sub- section (4) of Section 74 does not contain the term “such tax period”. This non mention would not, in our opinion, make any difference to the aforesaid interpretation. Apart from this, there are certain other provisions, which would also have to be considered. Any interpretation of an Act should not result in some of the other provisions becoming otiose or reduced in scope. As rightly pointed out by the Hon’ble High Court at Madras, the right of a registered person to obtain benefit under Section 128 of APGST Act as well as the right to invoke the remedy of appeal against the orders of assessment either under Section 73 or under Section 74 would get impacted if a common order is permitted to be issued in relation to more than one assessment / financial year.
18. In the circumstances, we are of the opinion that a single show cause notice or a single composite assessment order cannot be passed in relation to more than one tax period of either a month if the assessment is taken up before the due date for filing of the annual return or for more than one year if the due date for filing of annual return has been reached.”
4. Learned Standing Counsel has not disputed the legal position, much less the factual aspects with regard to issuance of composite order impugned in the writ petition.
5. In view of the factual and legal position, the impugned order dated 03.02.2026 is set aside. However, the 2 nd respondent is at liberty to issue separate orders for each assessment year and proceed with the assessments in respect of tax periods in question, after giving due opportunity to the petitioner, in accordance with Law.
6. Further, the period from the date of passing of the impugned order till the date of receipt of this order shall be excluded for the purpose of limitation.
7. Accordingly, the writ petition is disposed of, as indicated above.
8. There shall be no order as to costs. Miscellaneous petitions, if any, shall stand closed.
