Kohli Road Lines Vs Joint Commissioner (Bombay High Court)
In Kohli Road Lines Vs Joint Commissioner, the Bombay High Court examined a writ petition challenging a show cause notice dated 06.08.2025 issued under Section 74 of the Central Goods and Services Tax Act, 2017 for the financial years 2019–20 to 2022–23. The notice alleged non-payment of GST under reverse charge on transportation services and non-reversal of input tax credit attributable to exempt services.
The petitioner contended that the notice was invalid as it clubbed multiple financial years into a single proceeding, which is not permissible under the statutory framework. Reliance was placed on earlier Division Bench judgments of the Court, including Milroc Good Earth Developers and Rite Water Solutions (India) Ltd., where it was held that the GST scheme requires assessment and issuance of show cause notices separately for each financial year or tax period. These judgments emphasized that the law prescribes specific limitation periods linked to each financial year and that consolidation of multiple years would disrupt statutory timelines and procedural safeguards.
The Court reiterated that under the GST framework, tax liability is tied to distinct tax periods corresponding to financial years, even though returns may be filed monthly. It noted that Sections 73(10) and 74(10) prescribe separate limitation periods for each year for issuance of orders, and combining multiple years into a single notice would merge different limitation periods and affect the taxpayer’s ability to respond appropriately. The statutory definition of “tax period” and the scheme of returns and assessments further support a year-wise approach.
