Composite assessment order covering multiple tax periods under Section 73 is fundamentally illegal and invalid

By | October 13, 2026
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Composite assessment order covering multiple tax periods under Section 73 is fundamentally illegal and invalid

Issue

Whether a single composite Show Cause Notice (SCN) or composite assessment order issued under Section 73 covering multiple tax periods (AY 2021-22 to 2024-25) is legally sustainable.

Facts

  • The petitioner is a registered dealer under the Goods and Services Tax (GST) law.
  • The tax authorities issued a single composite assessment order against the petitioner covering multiple tax periods from FY 2021-22 to FY 2024-25.
  • The petitioner filed an appeal against the assessment order before the Appellate Authority.
  • The Appellate Authority confirmed the assessment order, noting that the petitioner failed to avail three opportunities for personal hearing.
  • Due to the non-constitution/non-filing before the GST Appellate Tribunal (GSTAT), the petitioner filed a writ petition before the High Court challenging the legality of the single composite assessment order and the consequential appellate order.

Decision

  • The court held that issuing a single SCN or passing a composite assessment order for more than one tax period under Section 73 is legally impermissible.
  • The court relied on the binding precedent set by the co-ordinate Bench in S J Constructions  102 GSTL 348, which established that multi-year composite assessments under Section 73 suffer from foundational illegality.
  • The court held that since the original assessment order was composite across multiple years and unsustainable in law, the consequential appellate order resting on that invalid foundation could not survive.
  • Consequently, the court set aside both the assessment order and the appellate order, subject to the petitioner depositing 50% of the disputed tax within eight weeks. [Paras 6 and 8]

Key Takeaways

  • Impermissibility of Multi-Year Composite Orders under Section 73: Tax authorities cannot issue a single composite SCN or assessment order covering multiple tax periods under Section 73; assessments must be period-specific.
  • Foundational Illegality Vitiates Subsequent Orders: An appellate order confirming a fundamentally illegal or void assessment order cannot validate the initial defect and must be set aside.
  • Precedential Binding: Adjudicating authorities and High Courts are bound by co-ordinate Bench decisions prohibiting year-clubbing in non-fraud GST demand proceedings.
HIGH COURT OF ANDHRA PRADESH
Sri Lakshmi Ganga Bhavani Oil Mill
v.
Assistant Commissioner ST
Ninala Jayasurya and T.C.D. Sekhar, JJ.
WRIT PETITION NO. 27301 OF 2026†
SEPTEMBER  24, 2026
G Narendra Chetty for the Petitioner.
ORDER
Ninala Jayasurya, J.- Heard learned counsel for the petitioner. Also heard Mr. S.A.V. Sai Kumar, learned Assistant Government Pleader for Commercial Tax representing the respondent Nos.1 to 3.
2. Petitioner, registered dealer under Goods and Services Tax Act, 2017 (for short “the Act”) with GSTIN:37AYEPG0577E2ZK, is engaged in the business trading of Ground Nuts as a whole sale dealer, aggrieved by common Assessment Order dated 23.08.2025 issued by respondent No.1 and the order of the Appellate Authority dated 17.03.2026 in confirming the Assessment Order dated 23.08.2025, filed the present writ petition on various grounds.
3. Learned counsel for the petitioner while referring to the various averments made in the affidavit filed in support of the writ petition, made submissions inter alia that the order of respondent No.1 covering tax period for the different Assessment Years i.e., 2019-20 to 2024-25 is not sustainable, in the light of the decision rendered by this Court in S J Constructions v. Asstt. Commissioner   570/102 GSTL 348 (Andhra Pradesh)/(W.P No.11028 of 2025) dated 17.09.2025., and seeks to allow the writ petition by setting aside the impugned orders.
4. On the other hand, learned Government Pleader, while refuting the said contentions sought to sustain the impugned orders. His submission is that the petitioner instead of availing the remedy of further appeal before the Appellate Tribunal had straightaway filed the present writ petition and the same is not maintainable. However, he has not disputed the decision rendered by this Court in S J Constructions (referred to supra), but states that an appeal has been preferred before the Hon’ble Supreme Court and notice in delay petition was ordered. He further contends that though opportunity for personal hearing on three occasions in the Appeal was afforded, petitioner/appellant did not avail the same and the Appellate Authority passed an order dated 17.03.2026. After the time for statutory appeal before the Appellate Tribunal expired, petitioner filed the present Writ Petition. As such, no interference is warranted.
5. This Court has considered the submissions made and perused material on record.
6. Though several contentions were raised in the writ petition, this Court feels it not necessary to examine the same in detail. Suffice to state that impugned orders are liable to be set aside on the ground that the same is a composite order covering the tax periods 2021-22 to 2024-25.
7. In S J Constructions (supra), a co-ordinate Bench of this Court vide order dated 17.09.2025 held as follows:
“17. Section 74(3) is in pari materia with Section 73(3). However, sub-section (4) of Section 74 does not contain the term “such tax period”. This non-mention would not, in our opinion, make any difference to the aforesaid interpretation. Apart from this, there are certain other provisions, which would also have to be considered. Any interpretation of an Act should not result in some of the other provisions becoming otiose or reduced in scope. As rightly pointed out by the Hon’ble High Court at Madras, the right of a registered person to obtain benefit under Section 128 of APGST Act as well as the right to invoke the remedy of appeal against the orders of assessment either under Section 73 or under Section 74 would get impacted if a common order is permitted to be issued in relation to more than one assessment / financial year.
18. In the circumstances, we are of the opinion that a single show cause notice or a single composite assessment order cannot be passed in relation to more than one tax period of either a month if the assessment is taken up before the due date for filing of the annual return or for more than one year if the due date for filing of annual return has been reached.”
8. In the light of the above cited decision, the original order itself is not sustainable. However, petitioner availed remedy of appeal against the same and failed to avail opportunity of three hearings granted by the Appellate Authority. Keeping circumstances aforesaid in view and since appellate order is against an invalid order, we deem it appropriate to set aside the impugned orders, subject to condition of the petitioner depositing 50% of the disputed tax within a period of eight (08) weeks from the date of receipt of copy of this order. In the event of non-compliance of the condition, the authorities are at liberty to proceed in the matter, in accordance with law.
9. Further, amount, if any, already deposited by the petitioner towards the disputed tax after passing of the impugned orders, shall be given credit to. Needless to observe that respondent No.1 is at liberty to issue separate notices in respect of relevant tax periods and proceed with the assessments in accordance with law, after giving opportunity to the petitioner.
No costs. Miscellaneous petitions pending, if any, shall stand closed.