Lakshmi Venkateshwara Traders MS Scrap Vs Deputy Commissioner of Central Tax (Karnataka High Court)
The petitioner sought quashing of a Show Cause Notice dated 31.03.2022 issued under Section 74(1) of the CGST Act, along with the summary in Form GST DRC-01. The principal issue in dispute was whether multiple tax periods or financial years could be clubbed, consolidated, or combined in a single composite show cause notice.
The Court noted that the controversy was directly covered by its earlier judgment in M/S Pramur Homes And Shelters Vs. The Union of India and Ors., where two issues were framed: (i) whether clubbing multiple tax periods in a single show cause notice under Sections 73/74 of the CGST/KGST Act is permissible, and (ii) whether such a composite notice warrants interference.
In that earlier decision, the Court had held that clubbing or consolidating multiple tax periods or financial years in a solitary composite show cause notice is illegal, invalid, impermissible, and without jurisdiction or authority of law, being contrary to the provisions of the CGST/KGST Act. Consequently, such notices and all further proceedings pursuant thereto were liable to be quashed, while reserving liberty to the authorities to initiate fresh proceedings in accordance with law.
