In relation to the issue concerning the issuance of a single Show Cause Notice (SCN) covering multiple financial years, the Hon’ble Bombay High Court, in the case of M/s. RioCare India Private Limited v. Assistant Commissioner, CGST and C.Ex. & Ors., Writ Petition No. 19381 of 2024 (judgment dated January 6, 2025), made certain prima facie observations in paragraphs 3 and 4 of the order to the following effect:
“3. At least prima facie we are not impressed with this argument. There is nothing in Section 74 and more particularly 74(1) which would prohibit the Authority from issuing a notice calling upon the assessee to pay tax that has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised, by reason of fraud, or any willful misstatement or suppression of facts to evade tax. At least prima facie, a notice under Section 74(1) can be issued for any period provided said notice is given at least 6 months prior to the time limit specified in sub-section (10) of Section 74 for issuance of the order.
4. In the present case, admittedly there is no issue of limitation as contemplated under Section 74(10). In these circumstances, at least prima facie we are not satisfied that this Writ Petition ought to be entertained and which is challenging the show cause notice. The Petitioner will have to face the show cause notice and can canvass all arguments before the authority concerned, including the issues raised in the present Writ Petition.”
In the aforesaid judgment, the Hon’ble Bombay High Court observed that there is nothing in Section 74 of the CGST Act, 2017 — and more particularly in sub-section (1) thereof — which prohibits the Authority from issuing a notice calling upon the assessee to pay tax that has not been paid, short paid, erroneously refunded, or where input tax credit has been wrongly availed or utilised by reason of fraud, willful misstatement, or suppression of facts with an intent to evade tax. The Court further noted that, prima facie, a notice under Section 74(1) can be issued for any period, provided such notice is issued at least six months prior to the expiry of the time limit prescribed under sub-section (10) of Section 74 for issuance of the adjudication order.
In view of the above observations, the Department has been relying upon the said judgment to contend that there is no statutory prohibition preventing the issuance of a show cause notice (SCN) covering any period under Section 74 of the CGST Act.
It is pertinent to mention that several judgments delivered by different High Courts have held that issuance of a single Show Cause Notice (SCN) covering multiple financial years is not permissible under the GST law. However, in view of the observations made by the Hon’ble Bombay High Court in M/s. RioCare India Private Limited (supra), wherein it was noted that there is no express prohibition under Section 74 of the CGST Act, 2017 against issuance of such notices, the issue continues to remain unsettled.
In this context, it is relevant to refer to the subsequent decision of the Hon’ble Bombay High Court in M/s. Milroc Good Earth Developers v. Union of India & Ors., Writ Petition No. 2203 of 2025 and Writ Petition No. 2312 of 2025 (judgment dated October 9, 2025), wherein the Court made the following observation in paragraph 25 of the judgment:
“25. In our view, the aforesaid observations merely being of primary nature without appreciating the provisions in the Act of 2017 and Rules made therein, and recording a finding that there is no prohibition in issuance of notice calling upon payment of tax for different financial years, in our considered opinion, since the Petition before the Division Bench called for quashing of the demand notice referring to different financial years, but in any case the Court expressed the prima facie opinion and recorded that there is no issue of limitation as contemplated under Section 74(10).
In any case the Court refused to show indulgence and directed the Petitioner to face the show cause notice and therefore the Division Bench did not express it final opinion.”
This observation indicates that the earlier view expressed in RioCare India (supra) was merely prima facie in nature and not a final determination on the permissibility of issuing a consolidated notice for multiple financial years. The Court in Milroc Good Earth Developers (supra) thus clarified that the Division Bench in RioCare India had not conclusively adjudicated the question on merits.
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