Rite Water Solutions (India) Ltd. Vs Joint Commissioner (Bombay High Court)
The petition challenged a show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017, on the ground that the tax authorities had impermissibly clubbed multiple tax periods into a single notice. The respondent authority issued a notice dated 4 August 2024 demanding recovery of ₹2,12,16,300 by invoking Section 74 read with Section 9 of the CGST Act and Section 20 of the Integrated Goods and Services Tax Act, 2017. The notice covered a consolidated tax period from July 2017 to March 2022.
The petitioner argued that such consolidation of notices across several financial years was not permissible under the statutory scheme of the CGST Act. Reliance was placed on a Division Bench judgment of the Goa Bench of the Court in Milroc Good Earth Developers, which examined the structure of assessment, return filing, limitation, and recovery provisions under the CGST Act. That judgment emphasized that GST liability is determined with reference to specific tax periods, whether monthly or annual, and that Sections 73 and 74 prescribe strict time limits linked to the relevant financial year. The Court in that case held that the Act does not permit consolidation of multiple financial years or tax periods into a single show cause notice, as each assessment must correspond to a defined tax period and be subject to its own limitation framework.
