GST SCN Invalid if Multiple Years Combined in Single Proceedings: Bombay HC

Rainbow Greeners Nagpur Vs State of Maharashtra and Ors. (Bombay High Court)

The case before the Bombay High Court involved a challenge to a show cause notice issued under Section 74 of the CGST Act, 2017, alleging suppression of taxable value and short payment of tax for multiple financial years from 2018–19 to 2022–23. The petitioner contended that clubbing multiple financial years into a single notice was not permissible under the statutory framework of GST.

The petitioner relied on earlier decisions of the High Court, including Milroc Good Earth Developers Vs Union of India and Rite Water Solutions India Ltd Vs Joint Commissioner CGST, wherein it was held that the GST scheme does not permit consolidation of multiple financial years or tax periods into a single show cause notice. These decisions emphasized that GST liability is tied to specific tax periods, generally corresponding to each financial year, and that statutory timelines for assessment and recovery operate independently for each year.

The Revenue opposed the petition by relying on the decision of the Delhi High Court in Mathur Polymers Vs Union of India, where it was held that consolidated notices covering multiple years may be permissible, particularly in cases involving fraudulent input tax credit. It was also argued that the said decision had attained finality as the Supreme Court declined to interfere.