In the case, State of Jammu and Kashmir vs. Caltex (India) Ltd, the SC held that separate assessment orders should be treated independently when covering different assessment years

The Karnataka High Court has declared that issuing a single consolidated Show Cause Notice ( SCN ) under Section 73 of the Goods and Services Tax ( GST ) Act for multiple assessment years is unlawful. According to the court, the consolidated SCN issued by the GST department was fundamentally flawed. It also stated that such notices contravened the GST Act and the legal precedents. The Bangalore Golf Club challenged the consolidated SCN issued on May 7, 2024, and a summary notice dated May 8, 2024. These notices, covering tax periods from 2019-20 through 2023-24, were challenged on the grounds that grouping multiple assessment years into a single notice was fundamentally flawed. Get a Copy of GST Ready Reckoner, Click here The petitioner argued that according to Section 73 of the Central Goods and Services Tax (CGST) Act, 2017, actions related to tax assessments must be completed within the specific year of assessment. The petitioner contended that the limitation period of three years should be applied separately to each assessment year, making the consolidation of multiple years into one notice impermissible. This argument was supported by a precedent set in the Madras High Court case of M/s. Titan Company Ltd. vs. Joint Commissioner of GST, which cited the Supreme Court’s decision in State of Jammu and Kashmir vs. Caltex (India) Ltd. The Supreme Court had held that separate assessment orders should be treated independently when covering different assessment years. Get a Copy of GST Ready Reckoner, Click here Justice Sachin Sankar Magadum noted that “Section 73(10) of the CGST Act mandates a specific time limit from the due date for furnishing the annual return for the financial year to which the tax due relates. The law stipulates that particular actions must be  completed within a designated year, and such actions should be executed in accordance with the law’s provisions. The principles enunciated in the judgment cited by the Hon’ble Supreme Court are directly applicable to the present case.” The bench observed that  the practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act and established legal precedents. The Karnataka High Court thus ruled that the consolidated SCNs were fundamentally flawed. It ordered the quashing of the notices and affirmed that separate SCNs must be issued for each assessment year in compliance with the GST Act.