Case Law Details
S.R.S Travels And Logistics Private Limited Vs Additional Director of GST Intelligence (Karnataka High Court)
The Karnataka High Court considered a writ petition challenging a show cause notice dated 21.06.2024 and an Order-in-Original dated 03.02.2025 issued under the GST law, whereby proceedings were initiated for reversal of input tax credit for the period from 2019–20 to 2021–22 (up to July). The petitioner sought quashing of both the notice and the adjudication order, contending that the proceedings were vitiated in law.
The Court noted that although several contentions were raised by both sides, the controversy involved was directly and squarely covered by an earlier judgment of the same Court in Pramur Homes and Shelters v. Union of India, decided on 11.12.2025. In that decision, the Court had framed two key issues: first, whether clubbing or consolidation of multiple tax periods or financial years into a single composite show cause notice under Sections 73 or 74 of the CGST/KGST Acts was permissible; and second, whether such a composite show cause notice warranted judicial interference.
In Pramur Homes and Shelters, the Court answered both issues in favour of the taxpayer. It held that clubbing, consolidation, bunching, or combining of multiple tax periods or financial years in a solitary or composite show cause notice under Sections 73 or 74 of the CGST/KGST Acts is illegal, invalid, impermissible, and without jurisdiction or authority of law. The Court further held that a show cause notice covering multiple tax periods is contrary to the statutory scheme and vitiates all proceedings initiated pursuant to such notice. Consequently, the impugned show cause notice in that case was quashed, while liberty was reserved to the authorities to initiate fresh proceedings in accordance with law.
Applying the ratio of the earlier judgment, the Court observed that the issue in the present petition also related to clubbing or consolidation of multiple tax periods or financial years in a single composite show cause notice. Since this practice had already been declared illegal and invalid by the Court, the impugned show cause notice dated 21.06.2024 and the consequential order dated 03.02.2025 could not be sustained.
Accordingly, the Court held that both the show cause notice and the adjudication order deserved to be quashed. The writ petition was allowed and disposed of in terms of the earlier decision in Pramur Homes and Shelters. The impugned notice, the order, and all further proceedings pursuant thereto were set aside. However, the Court expressly reserved liberty to the respondents to initiate appropriate proceedings afresh in accordance with law, if so advised, and clarified that the petitioner would be entitled to contest or defend such proceedings in accordance with law.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, petitioner seeks the following reliefs:
“(i) Issue a writ of certiorari or any other writ or direction or order to quash Impugned show cause notice dated: 21.06.2024 bearing No. 34/2024-25 (DIN: 202406DSS00000007AF) issued by the Ld. Respondent No. 1 enclosed as Annexure A, for the reasons stated in the grounds and direct the Respondent to drop the proceedings for reversal of the input tax credit availed for the 2019-20 to 2021-22 (upto July).
(ia). Issue a writ of certiorari or any other writ or direction or order to quash impugned Order-In-Original No. No. 90/2024-25 (GST-JC) vide DIN- 2025025700000000E04B dated 03.02.2025 passed by the Ld. Respondent No.4 vide Annexure -J. for the reasons stated in the grounds and direct the Ld. Respondent No.4 to drop the proceedings for the period 2019-20 to 2021-22 (upto July).
(ii) Pass any other order or orders as this Hon’ble Court deems fit and proper in the facts and circumstances of the present case.”
2. Though several contentions have been urged by both sides in support of their respective claims, the issue in controversy between the parties is directly and squarely covered by the judgment of this Court in the case of M/S Pramur Homes And Shelters Vs. The Union of India and Ors. in WP No.33081/2025 dated 11.12.2025.
3. In the said judgment, this Court formulated two points for consideration, which reads as under:
(i) Whether clubbing/consolidation/bunching /combining of multiple tax periods/financial years in a Single/Composite Show cause notice issued under Section 73 / 74 of the CGST/ KGST Act , 2017 is permissible and valid in law?
(ii) Whether the impugned Show cause notice dated 30.09.2025 issued by the 4th respondent to the petitioner for the tax periods/financial years from 2019-20 to 2023-24 under Section 74 of the CGST/ KGST Act, 2017 warrants interference by this Court in the present petition?
4. Issue No.1 was answered by this Court in favour of the petitioner by holding as under:
Point No.(i) is accordingly answered in favour of the petitioner/tax payer/assessee by holding that clubbing/ consolidation/ bunching/ combining of multiple tax periods/financial years in a Solitary/Single/Composite Show cause notice issued under Section 73/74 of the CGST/KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST/KGST Act.
5. So also point No.2 was also answered by this Court in favour of the petitioner by quashing the impugned Show Cause Notice by holding as under:
“Re: Point No.(ii);
9. While dealing with Point No. (i) supra, I have already come to the conclusion that clubbing / consolidation / bunching/ combining of multiple tax periods/financial years in a Solitary/Single/Composite Show cause notice issued under Section 73 / 74 of the CGST / KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST / KGST Act. In the instant case, a perusal of the impugned Show cause notice dated 30.09.2025 will indicate that the same encompasses and pertains to multiple tax periods/financial years, viz., from 2019-20 to 2023-24, which is impermissible in law and consequently, the impugned Show cause notice and all further proceedings pursuant thereto are also vitiated and deserve to be quashed reserving liberty to the respondents to initiate any action/proceedings in accordance with law.
Point No.(ii) is also accordingly answered in favour of the petitioner/tax payer/assessee by holding that the impugned Show cause notice dated 30.09.2025 issued by the 4th respondent to the petitioner for the tax periods/financial years from 201920 to 2023-24 under Section 74 of the CGST/KGST Act is illegal, invalid, impermissible, arbitrary and without jurisdiction or authority of law and contrary to the provisions of the CGST/KGST Act and the impugned show cause notice and all further proceedings, orders, notices pursuant thereto deserve to be quashed by reserving liberty in favour of the respondents to initiate proceedings in accordance with law.
10. In the result, I pass the following:
ORDER
(i) Petition is hereby allowed.
(ii) The impugned show-cause notice at Annexure-A dated 30.09.2025 issued by respondent No.4 and all further proceedings, orders, notices etc., pursuant thereto initiated/to be initiated by the respondents are hereby quashed.
(iii) The respondents are however reserved liberty to initiate appropriate proceedings in accordance with law and if such proceedings are initiated by the respondents, petitioner would be entitled to contest / defend the same in accordance with law.”
6. The issue in controversy involved in the present petition also relates to clubbing/consolidation/bunching/combining of multiple tax periods/financial years/block periods in a Single/Composite Show cause notice, which has already been held to be invalid and illegal by this Court in M/S Pramur Homes And Shelters’s case referred to Supra.
7. Under these circumstances, the impugned show cause notice dated 21.06.2024 at Annexure-A as well as order dated 03.02.2025 at Annexure-J deserve to be quashed.
8. In the result, I pass the following:
ORDER
(i) Petition is hereby allowed and disposed of in terms of M/S Pramur Homes And Shelters Vs. The Union of India and Ors. in WP No.33081/2025 dated 11.12.2025.
(ii) The impugned show cause notice dated 21.06.2024 at Annexure-A as well as order dated 03.02.2025 at Annexure-J and all further proceedings, orders, notices etc., pursuant thereto initiated/to be initiated by the respondents are hereby quashed.
(iii) The respondents are however reserved liberty to initiate appropriate proceedings in accordance with law and if such proceedings are initiated by the respondents, petitioner would be entitled to contest / defend the same in accordance with law.
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