Separate GST Orders should be issued for each year Despite Composite SCN: Kerala HC

The Kerala High Court addressed a petition filed by Lakshmi Mobile Accessories challenging a show cause notice (Ext.P1) issued under Section 74 of the Central Goods and Services Tax Act, 2017. The petitioner sought separate orders for each financial year (2018-2019 to 2023-2024), sufficient time to respond, and an opportunity for cross-examination. The court noted that the petitioner had been issued a show cause notice proposing tax, penalty, and interest, with an initial hearing scheduled for August 22, 2024. However, the petitioner submitted a detailed reply only on December 3, 2024, addressing the entire period covered by the notice. The petitioner raised concerns about the respondent’s intention to issue a composite order for all years and proceed with undue haste, without providing adequate opportunity for cross-examination. The court, however, stated that these concerns were based on assumptions and lacked supporting evidence. It pointed out that the petitioner was initially given a hearing opportunity, and the respondent did not proceed until the petitioner submitted their reply. The court emphasized that it could not intervene based on mere apprehensions, especially given the impending limitation period for the 2017-2018 financial year.

The court acknowledged the petitioner’s concern regarding a potential composite order. While it declined to interfere with the proceedings related to the 2017-2018 financial year, given the approaching limitation deadline, it recognized the need for separate adjudication orders for the subsequent years (2018-2019 onwards). The court referenced a precedent where a single judge had ruled that separate adjudication orders should be issued, even if a composite show cause notice was served. The court concurred with this view, stating that the petitioner should be granted a reasonable opportunity for hearings for each of those years, as the limitation period for those years had not yet expired. The court granted liberty to the respondents to pass appropriate orders for 2017-18 within the limitation period, following due process and granting the petitioner a hearing. Subsequently, the authority was directed to pass separate orders of determination for each of the remaining years mentioned in the show cause notice, after providing reasonable hearing opportunities, in accordance with the law. The writ petition was disposed of accordingly.