Single Composite GST Assessment Order Issued For Multiple Financial Years Is Legally Impermissible
Issue
Whether a single composite assessment order or show-cause notice can be validly issued under Sections 73 and 74 of the GST Act to cover multiple financial years or tax periods.
Facts
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Parties involved: The petitioner-assessee company filed a writ petition challenging an assessment action initiated by the state tax authorities.
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Period of dispute: The matter pertained to two distinct financial periods: 2018–2019 and 2019–2020.
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Adjudication action: The tax authorities issued and served a single, combined composite assessment order on the assessee to recover Goods and Services Tax (GST) demands/Input Tax Credit (ITC) items.
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Basis of challenge: The assessee filed a writ petition before the High Court, asserting that the single composite framework of the assessment order across distinct periods was legally flawed, alongside raising other substantive grounds.
Decision
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Reliance on precedent: The High Court followed the binding Division Bench precedent set in S J Constructions v. Asstt. Commissioner 102 GSTL 348 (Andhra Pradesh).
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Bar on composite orders: It was reaffirmed that a single show-cause notice or single composite assessment order cannot aggregate and cover more than one distinct tax period.
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Pre- vs. Post-annual return guidelines: The Court clarified that such overlapping action is strictly prohibited for multiple months before the annual return due date, and similarly impermissible for multiple years after the due date.
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Order quashed: Finding that the contested demand notice collapsed two independent periods into one composite framework, the High Court set aside the impugned assessment order.
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Revenue liberty preserved: The Court reserved full liberty for the revenue authorities to split the demands and initiate fresh, separate adjudication proceedings for each assessment year individually.
Key Takeaways
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Periodicity is a statutory right: Under Sections 73 and 74 of the CGST/APGST Act, each tax period is treated as an independent adjudicatory unit. Collapsing multiple years into a single order compromises the taxpayer’s distinct statutory options for appeals, rectifications, or fee waivers.
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Enforcement discipline: Even in cases not involving fraud, administrative convenience cannot override procedural compliance. Revenue authorities must issue separate notices and orders for separate financial years once annual returns are due.