Clubbing Multiple Financial Years in One GST Notice Unsustainable Under CGST Act: Bombay HC

Aasawa Brothers Corporate Avenue Vs Union of India (Bombay High Court)

The petitions challenged show cause–cum–demand notices issued in June 2025 by the Additional Director of the Directorate General of GST Intelligence (DGGI) under Section 74 of the Central Goods and Services Tax Act, 2017. The notices covered multiple financial years in a consolidated manner. The petitioners sought to restrain the authorities from proceeding further based on these notices. Amendments to the writ petitions were also allowed through civil applications, enabling the petitioners to challenge not only the notices but also the final adjudication orders passed in two matters pursuant to those notices.

The petitioners limited their challenge to two main grounds. First, they argued that issuing a consolidated show cause notice covering multiple financial years under Section 74 of the CGST Act is impermissible in law. According to them, the statutory framework under Sections 73 and 74 requires year-wise determination of tax liability. Section 74(10) prescribes that the proper officer must pass an order within five years from the due date for furnishing the annual return for the relevant financial year. Because the limitation period is linked to each financial year’s annual return, the petitioners contended that independent notices must be issued for each financial year. They argued that clubbing several financial years into a single notice defeats the statutory limitation structure and prejudicially affects the assessee’s rights.