Composite Show Cause Notice under Section 73 Covering Multiple Financial Years Is Legally Unsustainable

By | September 23, 2026
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Composite Show Cause Notice under Section 73 Covering Multiple Financial Years Is Legally Unsustainable

Issue

Whether a single, composite Show Cause Notice (SCN) issued under Section 73 of the CGST/KSGST Act covering multiple assessment years (FY 2020-21 and FY 2021-22) is legally valid or liable to be quashed.

Facts

  • Issuance of Composite SCN: The petitioner received a single composite Show Cause Notice (Ext.P1) issued under Section 73 of the CGST/KSGST Act for multiple financial years, namely FY 2020-21 and FY 2021-22.
  • Writ Challenge: The petitioner invoked writ jurisdiction under Article 226, challenging Ext.P1 as legally unsustainable on the ground that the statute requires separate SCNs to be issued for each assessment year.
  • Revenue’s Defense: The Revenue respondents defended the composite notice, arguing that a unified SCN covering multiple financial years is maintainable.

Decision

  • Precedent Applied: The High Court held that the petitioner’s submission carried merit in light of Division Bench precedents establishing that composite SCNs issued across multiple assessment years are legally unsustainable.
  • Interference Warranted: Judicial interference was warranted, and Ext.P1 composite Show Cause Notice was accordingly quashed in favour of the assessee [Para 2].
  • Liberty & Limitation Exclusion: The Revenue was granted liberty to issue fresh, separate SCNs for each relevant financial year, with the period between the date of the impugned SCN and the receipt of a certified copy of the judgment excluded for limitation purposes [Para 2].

Key Takeaways

  • Year-Wise SCN Requirement: Under Section 73 of the CGST Act, demand notices must be issued separately for each financial year rather than consolidated into a single composite notice.
  • Jurisdictional Flaw: A composite SCN covering multiple assessment years suffers from a fundamental procedural defect that invalidates the resultant proceedings.
  • Exclusion of Time for Re-issuance: Upon quashing of a composite notice, the period during which the invalid notice was litigated is excluded when computing the statutory limitation period for issuing fresh, individual year-wise notices.
HIGH COURT OF KERALA
Jil Farm Products
v.
Audit Officer
ZIYAD RAHMAN A.A., J.
WP (C) NO.30493 OF 2026
SEPTEMBER  8, 2026
Rajath R. Nath, Sree Haridev and Smt. Divya Ravindran, Advs. for the Petitioner. Gireesh G., Sr. G.P for the Respondent.
JUDGMENT
This writ petition is submitted by the petitioner challenging Ext.P1 composite Show Cause Notice which was issued by the respondents for multiple financial years namely, 2020-2021 and 2021-2022. 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 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.
In such circumstances, in the light of the principles laid down by this Court in the above referred judgments, an interference is required. Accordingly, this writ petition is disposed of, quashing Ext.P1, granting liberty to the respondent to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P1 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.