Gruhlaxmi Life Space Pvt. Ltd. Vs Assistant Commissioner (Bombay High Court)
The petition challenged a show cause notice dated 26/06/2025 and a subsequent order dated 26/12/2025 issued under Section 74 of the Central Goods And Services Tax Act, 2017, alleging suppression of taxable value and short payment of tax for financial years 2018–19 to 2021–22.
The primary contention raised was that the authorities had impermissibly clubbed multiple financial years into a single show cause notice. The petitioner relied on earlier Division Bench judgments of the same Court, including Milroc Good Earth Developers and Rite Water Solutions, which held that consolidation of different financial years or tax periods in a single notice under Section 74 is not permissible. These judgments emphasized that the GST framework treats each financial year as a distinct tax period, with separate timelines and statutory requirements for assessment and recovery.
The Court noted that under the statutory scheme, tax liability is linked to returns filed for each tax period, and limitation periods for issuing orders are calculated independently for each financial year. Sections 73(10) and 74(10) prescribe time limits that operate year-wise, and combining multiple years would merge distinct limitation periods and procedural safeguards. Such consolidation would also adversely affect the taxpayer’s ability to respond effectively on a year-by-year basis.
