Is it permissible for the GST Department to issue a single Show Cause Notice encompassing multiple financial years in accordance with Sections 73 and 74 of the CGST Act?
Whether a consolidated show cause notice (SCN) covering several financial years can be issued under Sections 73 and 74 of the CGST Act, 2017, is a major and debated issue in GST law.
High Courts across India have reached different conclusions. The Bombay High Court (Goa Bench), in Milroc Good Earth Developers v. Union of India [2026] 104 GSTL 45 (Bom), held that the GST framework is based on specific tax periods and returns, so proceedings should be limited to individual financial years. Other courts have agreed, including R.A. & Co. v. Additional Commissioner of Central Taxes [(2025) 176 taxmann.com 731 (Mad.)], Titan Company Ltd. v. JC, GST & Central Excise [(2024) 15 CENTAX 118 (Mad.)], Tharayil Medicals v. Deputy Commissioner [(2025) 29 Centax 395 (Ker.)], and Lakshmi Mobiles v. Joint Commissioner (Kerala HC). The Karnataka High Court has also supported this view in Bangalore Golf Club v. AC, Commercial Taxes (WP No. 16500/2024), Veremax Technologies v. AC, Central Tax [2024] 167 taxmann.com 332 (Kar), and Pramur Homes and Shelters v. Union of India [(2025) 181 taxmann.com 541 (Kar)]. These rulings emphasise that the limitation under Sections 73(10) and 74(10) applies to each financial year. Combining multiple years into a single SCN can create jurisdictional issues, especially if the limitation period for any year has expired.
By contrast, the Delhi High Court in Mathur Polymers v. Union of India [2025 SCC OnLine Del 6892] and Ambika Traders v. Commissioner [(2025) 148 GSTR 1 (Del)] adopted a revenue-friendly approach. The Court found no clear legal bar to issuing a consolidated SCN covering multiple periods. These decisions hold that consolidation is merely a procedural convenience, provided the demand for each year falls within the limitation period. The Allahabad High Court concurred in M/s S.A. Aromatics Pvt. Ltd. v. Union of India [2026 SCC OnLine All 191]. The Supreme Court dismissed Special Leave Petitions challenging the Delhi High Court’s rulings in Ambika Traders and Mathur Polymers. However, because the Supreme Court did not deliver a detailed judgment, the legal issue remains unsettled.
Given these differing court decisions, the Bombay High Court recently revisited the issue. In a group of petitions led by M/s Rollmet LLP v. Union of India (Order dated 17 April 2026), the Court questioned its earlier decision in Milroc Good Earth Developers. The Court noted that Sections 73 and 74 form a complete set of rules for adjudication and, on the face of it, do not clearly prohibit consolidated show cause notices. It also pointed out that the limitation in Sections 73(10) and 74(10) relates to the time for making the adjudication order, not the format of the notice. Given the important legal questions and nationwide impact, the Court has referred the issue to a Larger Bench for a final decision.
Accordingly, the legal position as it stands today remains unsettled. There are two competing interpretative approaches—one grounded in strict, as a result, the legal position is still unclear. Courts are split between strictly following the tax-period structure of GST law and adopting a more practical approach to procedures. Until a larger bench or the Supreme Court issues a final ruling, the validity of consolidated multi-year SCNs will continue to be debated. This uncertainty affects GST investigations, limitation defences, and major tax disputes across India.
The divergence between High Courts on multi-year SCN consolidation matters practically because it affects how recipients should structure their reply.
Two positions in the case law:
– Courts that allow consolidation: Section 73 and 74 do not explicitly prohibit a single SCN covering multiple periods as long as the tax demand, interest, and penalty are separately calculated and disclosed for each year.
– Courts that disallow consolidation: The mandatory period-wise time limits under Section 73(10) and 74(10) are jurisdictional, meaning an SCN must be issued within the prescribed window for EACH year, and conflating years into one notice violates that.
For a practitioner responding to such an SCN: first raise a preliminary objection on jurisdiction if any of the covered years fall outside the three-year or five-year limitation window. Document the objection explicitly in the reply. This preserves the legal ground even if the substantive defence follows.
The Supreme Court reference pending on this issue should bring clarity, but until then, the cautious approach is to raise the jurisdictional challenge in every multi-year SCN reply.