Mahashay Marketing Vs Union of India (Karnataka High Court)
The Karnataka High Court examined a writ petition challenging multiple actions taken by GST authorities, including a show cause notice dated 24.11.2021, an addendum dated 29.05.2023, subsequent letters, an order dated 23.10.2023 under Section 67(10) of the GST Act, 2017, and an Order-in-Original dated 03.02.2025. The petitioner contended that these actions were without authority of law, premature, arbitrary, and initiated without disclosure of investigative material, thereby causing prejudice and violating principles of fairness.
Although several contentions were raised by both sides, the Court held that the controversy was squarely covered by its earlier judgment in Pramur Homes And Shelters v. Union of India, where the legality of issuing a single or composite show cause notice for multiple tax periods or financial years had been examined. In that precedent, the Court had framed and answered two key issues: whether clubbing or consolidation of multiple tax periods or financial years into a single show cause notice under Sections 73 or 74 of the CGST/KGST Act was permissible, and whether such a notice warranted judicial interference.
The Court had categorically 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 is illegal, invalid, impermissible, and without jurisdiction, being contrary to the provisions of the CGST/KGST Act. Consequently, such composite notices and all proceedings pursuant thereto were liable to be quashed, while reserving liberty to the authorities to initiate fresh proceedings in accordance with law.
