Composite GST order covering multiple financial years under Section 73 is invalid and unsustainable.

By | September 22, 2026
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Composite GST order covering multiple financial years under Section 73 is invalid and unsustainable.

Issue

Whether tax authorities can issue a single composite Order-in-Original under Section 73 of the CGST/KGST Act clubbing multiple financial years, or whether separate year-wise adjudication is mandatory.

Facts

  • Period Involved: The dispute pertained to financial years 2017–18 and 2018–19.

  • Impugned Action: The 1st respondent passed a single composite Order-in-Original (Ext.P2) adjudicating liabilities across multiple assessment years together.

  • Petitioner’s Challenge: The assessee filed a writ petition seeking to quash Ext.P2, contending that a single composite adjudication order spanning distinct assessment periods is legally unsustainable.

  • Reliance on Precedent: The petitioner relied on binding Division Bench rulings that prohibit composite adjudication across multiple financial years under GST law.

Decision

  • Precedent Followed: The High Court accepted the petitioner’s argument, relying on established principles laid down by the Division Bench against clubbing tax periods.

  • Order Quashed: The impugned composite Order-in-Original (Ext.P2) was quashed as invalid and legally unsustainable.

  • Liberty for Fresh Notices: Respondents were granted liberty to issue fresh, separate notices individually for each relevant assessment year.

  • Exclusion of Limitation: The Court directed that the period from the date of Ext.P2 until the receipt of the certified copy of the judgment shall be excluded when calculating the limitation period for initiating fresh proceedings.

  • Rights Preserved: All other substantive contentions were left open for fresh adjudication.

Key Takeaways

  • No Composite Orders: GST authorities lack jurisdiction to combine multiple assessment years into a single composite order under Section 73.

  • Mandatory Year-Wise Proceedings: Demand notices and assessment orders must strictly be issued separately for each financial year.

  • Limitation Benefit to Revenue: Quashing a composite order does not bar fresh action; the time spent in litigation is excluded from the limitation period to allow fresh, period-specific notices.

HIGH COURT OF KERALA
Nishad K.U.
v.
Joint Commissioner, Central Tax and Central Excises
ZIYAD RAHMAN A.A., J.
WP(C) NO. 47250 OF 2025
SEPTEMBER  7, 2026
Biju Vigneswar, Renjith B. Marar, Smt. Lakshmi N. Kaimal, P. Rajkumar, Keshavraj Nair, Smt. Meera Joppan, Abhiram S., Smt. Gaadha Suresh, Viswanath Jayan, Akshay Shibu, Fayas Muhammed S., Ananthapadmanabhan, Aashish Paul, Smt. Laxmisree Jayantha Kumar and Arun Poomulli, Advs. for the Petitioner. Sreelal N. Warrier, SC and R. Harishankar, Adv. for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P2 order-in-original passed by the 1st respondent for multiple financial years namely, 2017-2018 to 2018-2019. The main challenge raised against the sustainability of the same is that, issuance of a order-in-original for multiple assessment years was found to be not legally sustainable as per the decision rendered by this Court in Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories 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 respondents to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P2 order till the date of receipt of a 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.