Bunching multiple financial years into a single GST assessment

Bunching multiple financial years into a single GST assessment order is invalid and without jurisdiction.

Issue

Whether the GST authorities have the jurisdiction to issue a single composite Show Cause Notice or assessment order by clubbing multiple financial years under Section 73, or if year-wise proceedings are mandatory.

Facts

Period Involved: The tax period under dispute pertained to July 2017 to March 2023 (FY 2017–18 to FY 2022–23).
Impugned Action: The first respondent issued a single composite assessment order and a subsequent rectification rejection order covering multiple financial years.
Petitioner’s Challenge: The petitioner filed a writ petition challenging the validity of both the single assessment order and the rectification rejection order.
Legal Premise: The petitioner contended that clubbing or bunching multiple financial years into a single proceeding is unauthorized under the GST law.

Decision

Precedent Followed: Following earlier common orders in connected batch matters, the High Court held that bunching multiple financial years is impermissible in law.
Lack of Jurisdiction: The issuance of a single assessment order covering more than one financial year was held to be without jurisdiction.
Orders Quashed: The High Court quashed the impugned composite assessment order as well as the consequential rectification rejection order.
Outcome: The writ petition was allowed in favour of the assessee, granting the Department liberty to initiate separate proceedings for each financial year.

Key Takeaways

Year-Wise Proceedings Required: GST assessments under Section 73 must be conducted independently for each individual financial year.
Jurisdictional Bar: Issuing a consolidated notice or order by merging multiple tax periods is illegal and lacks jurisdiction.
Liberty Retained: Quashing a composite order does not exonerate tax liability; revenue authorities may issue fresh, separate notices for each financial year.

HIGH COURT OF MADRAS

Instakart Services (P.) Ltd.

Additional Commissioner

Krishnan Ramasamy, J.

W.P. No. 31551 of 2025
W.M.P. Nos. 35344 & 35345 of 2025

AUGUST 22, 2025

Kumar Vishalaksh and Ms. Mallows Priscilla P. for the Petitioner. Sai Srujan Tayi, SPC and Ms. Pooja Jain, JPC for the Respondent.

ORDER

1. This writ petition has been filed challenging the impugned order dated 06.01.2025 and the consequential rectification order dated 30.04.2025 passed by the 1^st respondent.

2. Mr.Sai Srujan Tayi, learned Senior Panel Counsel, takes notice on behalf of the respondent. By consent of the parties, the main writ petition is taken up for disposal at the admission stage itself.

3. When this writ petition was taken up for hearing, the learned counsel for the petitioner and the learned Senior Panel Counsel for the respondent would submit that the issue involved in the present petition is with regard to the bunching of show cause notice/orders, i.e., issuance of single show cause notice/orders for more than one financial year.

4. Further, they would submit that the aforesaid issue has already been decided by this Court vide common order dated 21.07.2025 passed in W.P.Nos.29716 of 2024, etc., Smt. R. Ashaarajaa v. Senior Intelligence Officer, Directorate General Of GST Intelligences [2025] 176 111 GST 91/101 GSTL 10 (Madras) batch, wherein it has been held as follows:

“28. (i) The GST Act permits only for issuance of show cause notice based on the tax period. Therefore, if the annual return is filed, the entire year would be considered as a tax period and accordingly, the show cause notice shall be issued based on the said annual returns.

(ii) If show cause notice is issued before the filing of annual returns, the same can be issued based on the filing of monthly returns;

(iii) If show cause notice is issued after the filing of annual returns or after the commencement of limitation, the said notice shall be issued based on the annual returns with regard to the relevant financial year.

(iv) No show cause notice can be clubbed and issued for more than one financial year since the same is impermissible in law.

(v) In these cases, without any jurisdiction, the impugned show cause notices/orders came to be issued/passed for more than one financial year, which is impermissible in law and hence, the same is liable to be quashed. Accordingly, the impugned show cause notices/orders stand quashed based on the aspect of clubbing of show cause notices for more than one financial year.”

5. Therefore, considering the submissions made by the learned counsel for the petitioner and by following the aforesaid order dated 21.07.2025 passed in W.P.Nos.29716 of 2024, etc., batch, this Court holds that in this case, without any jurisdiction, the impugned order came to be passed for more than one financial year, i.e., for the period from July 2017 to March 2023, which is impermissible in law and hence, the same is liable to be quashed.

6. Accordingly, this Court passes the following order:

(i)

The impugned assessment order dated 06.01.2025 and the consequential rectification rejection order dated 30.04.2025 are quashed.

(ii)

The respondent is granted liberty to initiate separate proceedings, against the petitioner, for each financial year.

7. With the above directions, this writ petition is disposed of. No cost. Consequently, the connected miscellaneous petitions are also closed.