Joint Commissioner (Intelligence & Enforcement) Vs Lakshmi Mobiles Accessories (Kerala High Court)
The writ appeal was filed by the State authorities against the judgment of a Single Judge concerning a show cause notice issued under Section 74 of the Central Goods and Services Tax (CGST) Act. The notice alleged suppression of turnover and demanded differential tax, interest, and penalty for multiple financial years from 2017–18 to 2023–24 through a single consolidated notice.
The respondent had challenged the notice on the ground that combining six financial years into one notice prejudiced its rights. It was argued that the limitation period for adjudication under Section 74(10) would be governed by the earliest year (2017–18), thereby restricting the time available to respond effectively for subsequent years. The respondent also raised concerns regarding denial of opportunity to cross-examine witnesses relied upon in the notice.
Also Read Interim SC Order in this case: SC to examine validity of consolidated GST SCNs spanning multiple financial years
The Single Judge declined to interfere on the issue of cross-examination at the notice stage, observing that procedural safeguards could be addressed during adjudication. However, the Court accepted the contention that a consolidated notice covering multiple years would prejudice the assessee due to varying limitation periods. Accordingly, the Judge permitted the authorities to proceed with adjudication for the earliest year within the statutory time limit and directed that separate orders be passed for other financial years after granting reasonable opportunity of hearing.
