Consolidated Show Cause Notice Covering Multiple Financial Years Under Section 73 Is Legally Invalid and Liable to Be Quashed
Issue
Whether issuing a single consolidated/composite Show Cause Notice under Section 73 covering multiple financial years (FY 2020-21 to FY 2022-23) is legally sustainable.
Facts
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A consolidated Show Cause Notice (SCN) was issued to the petitioner under Section 73 for multiple financial years, specifically spanning FY 2020-21 and FY 2022-23.
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The petitioner filed a writ petition challenging the validity of the SCN on the ground that a composite notice spanning across different financial years is impermissible.
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The petitioner relied on binding Division Bench rulings which held that clubbing distinct assessment periods into a single, consolidated SCN is invalid.
Decision
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The court held that the petitioner’s submission had merit, as the Division Bench had already established that consolidated SCNs covering distinct assessment periods are impermissible under Section 73.
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In light of established precedent, the court quashed the impugned composite Show Cause Notice.
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Liberty was granted to the tax authorities to issue separate, year-specific Show Cause Notices for each relevant financial year.
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The period from the date of the quashed SCN until the receipt of the certified copy of the judgment was ordered to be excluded when computing the limitation period for initiating fresh proceedings.
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All other substantive contentions on the merits were left open for fresh determination.
Key Takeaways
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No Composite SCNs: Tax authorities cannot issue a single, consolidated Show Cause Notice under Section 73 for multiple financial years; each financial year constitutes a distinct assessment period requiring a separate notice.
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Saving Limitation Period: When a composite SCN is quashed on procedural grounds, the period spent during the litigation is excluded from the limitation timeline, allowing the revenue to issue fresh year-wise notices.
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Binding Precedent: Clubbing distinct periods in a single demand notice violates the statutory framework of Section 73, as affirmed by Division Bench rulings.
HIGH COURT OF KERALA
Benny Augustine
v.
State Tax Officer
ZIYAD RAHMAN A.A., J.
WP(C) NO. 29405 OF 2026
AUGUST 21, 2026
Nirmal Krishnan, Adv. for the Petitioner. Gireesh G., Sr. Govt. Pleader for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P2 consolidated Show Cause Notice which was issued by the respondents for multiple financial years namely, 2020-2021 and 2022-2023. The main challenge raised against the sustainability of the same is that, issuance of a composite notice for multiple assessment years was found to be not legally sustainable as per the decision rendered by this Court in oint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories [2025] 108 GST 750/95 GSTL 356 (Kerala)/[2025 KHC OnLine 149] and Tharayil Medicals v. Deputy Commissioner, SGST Department, Thrissur (Kerala)/ [2025 KHC OnLine 467].
2. After hearing the learned counsel for the petitioner and the learned Standing Counsel for the respondents, I find merits in the said submission, in view of the fact that, such a finding was indeed entered into by the Division Bench of this Court in the decisions referred to above.
3. In such circumstances, in the light principles laid down by this Court in the above referred judgments, an interference is required. Accordingly, this writ petition is disposed of, quashing Ext.P2, granting liberty to the respondent to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P2 till the date of receipt of certified copy of the judgment shall be excluded while computing the period of limitation for initiating fresh proceeding. All the other contentions of the parties are left open.