Composite SCN and Order Issued Under Section 73 Covering Multiple Financial Years Are Invalid and Impermissible

By | October 7, 2026
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Composite SCN and Order Issued Under Section 73 Covering Multiple Financial Years Are Invalid and Impermissible

Issue

Whether a single composite Show Cause Notice (SCN) and consequential adjudication order (OIO) issued under Section 73 covering multiple assessment/financial years (2020-21 to 2022-23) are legally sustainable under GST laws.

Facts

  • Composite SCN Issued: The revenue department issued a single composite Show Cause Notice under Section 73 of the GST Act covering three separate financial years (2020–21, 2021–22, and 2022–23).
  • Adjudication Order Passed: Based on the composite SCN, the adjudicating authority passed a single Order-in-Original (OIO) confirming demands across all three financial years.
  • Writ Challenge: The petitioner filed a writ petition challenging both the composite SCN and the consequential OIO on the ground that a single notice for multiple assessment years is legally impermissible and separate notices are required for each financial year.

Decision

  • Precedental Binding: Relying on binding Division Bench decisions, the High Court held that issuing a single composite SCN across multiple financial years under Section 73 is not legally sustainable.
  • SCN and Order Quashed: The impugned composite SCN and the consequential Order-in-Original were quashed and set aside.
  • Liberty to Re-initiate: The Court granted liberty to the revenue department to issue separate, year-wise Show Cause Notices for each relevant financial year.
  • Limitation Exclusion: The period from the date of issuance of the quashed composite SCN until the receipt of the certified copy of the judgment was ordered to be excluded while computing the limitation period for initiating fresh year-wise proceedings (In favour of assessee).

Key Takeaways

  1. Year-Wise Notice Requirement: Under Section 73 of the GST Act, the revenue cannot issue a bundled or composite Show Cause Notice covering multiple assessment years; separate SCNs must be issued for each financial year.
  2. Invalidity of Composite Orders: An adjudication order originating from an invalid composite SCN inherits the same jurisdictional defect and cannot be sustained in law.
  3. Saving of Limitation for Fresh Notices: When a composite SCN is quashed on procedural grounds, the period spent during the invalid proceedings is excluded when calculating statutory limitation for issuing fresh individual notices.
HIGH COURT OF KERALA
Choice Estates and Constructions (P.) Ltd.
v.
Union of India
ZIYAD RAHMAN A.A., J.
WP(C) NO. 31492 OF 2026
SEPTEMBER  15, 2026
Jazil Dev Ferdinanto, Smt. Sreelekshmi Ben, Jose Jacob, Smt. Anne Maria Mathew and Smt. Jessica Mariam Vinod, Advs. for the Petitioner. Dinesh Thankappan, GP and V. Girishkumar, SC for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P4 composite Show Cause Notice which was issued by the respondents for multiple financial years namely, 2020-2021 to 2022-2023 and Ext.P7 Order-in-Original. 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  214/108 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 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.P4 and Ext.P7, granting liberty to the respondent to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P4 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.