Composite Show Cause Notice and Assessment Order Encompassing Multiple Assessment Years Are Invalid in Law

By | September 30, 2026
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Composite Show Cause Notice and Assessment Order Encompassing Multiple Assessment Years Are Invalid in Law

Issue

Whether a composite Show Cause Notice (SCN), summary notice (DRC-01A), and assessment order issued under Section 73 covering multiple tax periods/assessment years (FY 2019–20 to FY 2023–24) are legally sustainable.

Facts

  • Composite Proceedings: The 1st respondent issued a single, consolidated Show Cause Notice (SCN) under Section 73 to the petitioner covering five distinct financial years (FY 2019–20 to FY 2023–24).
  • Consolidated Order & DRC-01A: Following the composite SCN, the authority passed a single consolidated adjudication order, and the 2nd respondent issued a consolidated Form GST DRC-01A encompassing all five financial years.
  • Challenge by Assessee: The petitioner challenged the composite proceedings via a writ petition, contending that multi-year consolidated notices and orders under Section 73 are legally impermissible and that separate, year-wise notices must be issued.

Decision

  • Impermissibility of Composite Notices: Held that issuing a single composite SCN, adjudication order, and Form GST DRC-01A across multiple financial years is legally unsustainable, following established Division Bench precedents.
  • Quashing of Impugned Actions: The Court quashed the consolidated SCN, the summary DRC-01A, and the resulting adjudication order.
  • Liberty to Issue Year-Wise Notices: Liberty was granted to the Department to initiate fresh proceedings by issuing separate, year-wise notices for each relevant financial year.
  • Exclusion of Limitation Period: Held that the period between the date of the consolidated order and the receipt of the certified copy of the judgment shall be excluded when calculating the limitation period for initiating fresh year-wise proceedings under Section 73.

Key Takeaways

  • Mandatory Year-Wise Adjudication: Under GST law, each financial year constitutes an independent tax period; bundling multiple years into a single consolidated Section 73 notice or assessment order is bad in law.
  • Jurisdictional Precedent: Departmental officers cannot adopt shortcut methods by issuing multi-year composite show-cause notices or orders under Section 73; failure to issue separate annual notices invalidates the proceedings.
  • Protection of Revenue Limitation: When composite proceedings are set aside on procedural grounds, courts typically exclude the litigation time frame to allow the Revenue a fair opportunity to issue fresh year-wise notices within the statutory limitation period.
HIGH COURT OF KERALA
Asterlakshya Builders and Developers (P.) Ltd.
v.
Deputy Commissioner of State Tax
ZIYAD RAHMAN A.A., J.
WP(C) NO. 32954 OF 2025
SEPTEMBER  10, 2026
Rajesh Nambiar and Smt. Sindhu K. Nambiar, Advs. for the Petitioner. Smt. Sindhu Santhalingam, Sr. GP for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P1 consolidated Show Cause Notice which was issued by the 1st respondent for multiple financial years namely, 2019-2020 to 2023-2024, Ext.P3 order passed by the 1st respondent and Ext.P7 FORM GST DRC-01A issued by the 2nd respondent. The main challenge raised against the sustainability of the same is that, issuance of a composite notice, order and FORM GST DRC-01A 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 [2025]   (Kerala)/[2025 KHC OnLine 467].
2. After hearing the learned counsel for the petitioner and the learned Government Pleader 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 Exts.P1, P3 and P7, granting liberty to the respondents to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P3 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.