Composite show cause notice issued under Section 74 across multiple financial years is legally invalid

By | October 28, 2026
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Composite show cause notice issued under Section 74 across multiple financial years is legally invalid

Issue

  • Whether a single composite show cause notice issued under Section 74(1) of the CGST/KGST Act, 2017 spanning multiple financial years (2017-18 and 2018-19) is legally sustainable.

Facts

  • The petitioner, registered under the CGST and SGST Acts, was subjected to proceedings for two financial years (FY 2017-18 and FY 2018-19).
  • The proper officer issued Ext. P12 as a single composite show cause notice under Section 74(1) combining both periods into one proceeding.
  • The petitioner filed a writ petition challenging the legal validity of issuing a single composite notice for multiple assessment periods.
  • The matter was governed by binding judicial precedents, including the Kerala High Court Division Bench decision in Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories and Tharayil Medicals v. Deputy Commissioner, SGST Department, Thrissur, which held composite notices across multiple periods impermissible.

Decision

  • Following established binding precedents, the composite show cause notice (Ext. P12) issued under Section 74(1) covering multiple financial years was set aside as legally unsustainable.
  • Liberty was granted to the Revenue to issue fresh, individual show cause notices for each financial year in accordance with statutory provisions.
  • The writ petition was allowed in favor of the assessee.

Key Takeaways

  • Impermissibility of Composite Notices: Tax authorities cannot combine multiple financial years into a single composite show cause notice under Section 74(1); each financial year represents a distinct assessment period.
  • Period-Specific Adjudication: Show cause notices and subsequent proceedings under GST laws must be initiated separately for each financial year to ensure procedural compliance.
  • Liberty to Re-notice: Quashing a composite notice on jurisdictional grounds does not prevent the tax authorities from issuing fresh, year-wise notices within the statutory limitation period.
HIGH COURT OF KERALA
Marvel Tours (P.) Ltd.
v.
Union of India
Harisankar V. Menon, J.
WP(C) NO. 34294 OF 2024
OCTOBER  14, 2026
Aditya Unnikrishnan, Smt. Nivedita A. Kamath, Smt. Binisha Baby, Smt. Saritha K.S., Advs. and Anil D. Nair, Sr. Adv. for the Petitioner. Smt. Anju Divakar, CGC, Rajesh. K. Raju, Govt. Pleader, Smt. Harima Hariharan, GP and V. Girish Kumar, SC for the Respondent.
JUDGMENT
1. Heard Sri.Anil D. Nair, the learned Senior Counsel instructed by Sri.Arun M. Sreekumar, the learned counsel for the petitioner, as well as Smt.Harima Hariharan, the learned Government Pleader for the respondents.
2. The petitioner is an assessee under the provisions of the Central Goods and Service Tax Act, 2017 (hereinafter referred to as “CGST Act”) and the State Goods and Service Tax Act, 2017 (hereinafter referred to as “SGST Act”). The petitioner has filed the captioned writ petition against Ext.P12 show cause notice for the period 2017- 18 and 2018-19. The show cause notice issued as above under the provisions of Section 74(1) of the CGST Act is challenged on the contention that the notice issued is a composite one. It is also pointed out that the notice is bad with respect to the provisions of Section 6(2) of the CGST Act.
3. As regards the first issue, a Division Bench of this Court in Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories  108 GST 750/95 GSTL 356 (Kerala) and Tharayil Medicals v. Deputy Commissioner, SGST Department, Thrissur [2025]  (Kerala) has already held that a composite notice in the nature of one at Ext.P12 could not be issued.
4. In view of the afore, this Court is of the opinion that the captioned writ petition requires to be allowed.
5. Hence, this writ petition would stand ordered as under:-
i. Ext.P12 show cause notice issued as above is set aside.
ii. The respondents would be entitled to issue fresh notices strictly in accordance with the provisions of the statute.
iii. Subject to the liberty granted as above, the writ petition is allowed.