Composite Assessment Order Under Section 74 Covering Multiple Financial Years Is Legally Invalid
Issue
Whether a single composite assessment order passed under Section 74 of the CGST/APGST Act covering multiple tax periods/assessment years (FY 2021–22 to FY 2024–25) is legally sustainable.
Facts
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Assessee Registration: The petitioner is a registered firm under the Goods and Services Tax framework.
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Composite Proceeding: The tax authorities issued a single composite assessment order under Section 74 encompassing multiple financial years from FY 2021–22 to FY 2024–25.
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Writ Challenge: The petitioner filed a writ petition challenging the legal validity of issuing one composite assessment order across multiple tax periods instead of year-wise adjudications.
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Undisputed Facts: The Revenue/Government Pleader did not dispute the factual issuance of the composite order or the established legal position against multi-year composite orders.
Decision
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Distinct Notice Required: Held that each tax period requires a distinct show cause notice and independent adjudication under Section 74.
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Impermissibility of Composite Orders: Held that composite adjudication across multiple financial years is legally impermissible.
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Quashing of Order: The impugned composite assessment order was set aside.
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Liberty for Year-Wise Proceedings: Liberty was granted to the Department to initiate fresh proceedings by issuing separate year-wise notices and passing individual assessment orders after providing a due opportunity of being heard.
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Exclusion for Limitation: Held that the period from the date of the impugned order until the receipt of a copy of this order shall be excluded for computing limitation regarding fresh proceedings.
Key Takeaways
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Strict Year-Wise Adjudication: Under Section 74 (as well as Section 73) of the GST Act, each financial year constitutes a distinct assessment period, making multi-year bundled assessment orders void ab initio.
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Defect Applies to Fraud Cases: The requirement for year-wise notices and adjudications applies equally to proceedings involving allegations of fraud, willful misstatement, or suppression under Section 74.
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Exclusion of Litigation Timeframe: When setting aside composite assessment orders on procedural grounds, courts preserve the Department’s right to issue fresh year-wise notices by excluding the time spent in litigation for limitation purposes.
HIGH COURT OF ANDHRA PRADESH
Venspra Impex
v.
Deputy Commissioner ST
Ninala Jayasurya and T.C.D. Sekhar, JJ.
WRIT PETITION No. 26359 OF 2026
SEPTEMBER 16, 2026
Anil Kumar Bezawada, Counsel for the Petitioner.
ORDER
Ninala Jayasurya, J. – Heard learned counsel for the petitioner. Also heard Mr.R.Kalyan Chakravarthy, learned Government Pleader for Commercial Tax, appearing for the respondents. With their consent, the writ petition is disposed of at the stage of admission.
2. Petitioner a registered firm, is served with assessment order dated 12.06.2026 under Section 74 of Central Goods and Service Tax Act (in short ‘CGST Act’) for the years 2021-22 to 2024-25. Aggrieved by the said order dated 12.06.2026, passed by the 1st respondent, the present writ petition is filed.
3. Learned counsel for the petitioner referring to various averments in the affidavit filed in support of the writ petition, inter alia contends that the impugned order of the 1st respondent for the tax period 2021-22 to 2024-25, covering multiple tax periods is impermissible in Law under the provisions of CGST Act. He also placed reliance on the decision of a Co-ordinate Bench of this Court in S J Constructions v. Asstt. Commissioner 102 GSTL 348 (Andhra Pradesh)/(W.P No.11028 of 2025 & batch), dated 17.09.2025, wherein, it was held as follows:
“17. Section 74(3) is in pari materia with Section 73(3). However, subsection (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.”
4. Learned Government Pleader for Commercial Tax has not disputed the legal position, much less the factual aspects with regard to issuance of composite order impugned in the writ petition.
5. In view of the factual and legal position, the impugned order dated 12.06.2026 is set aside. However, the 1st respondent is at liberty to issue separate notices for each assessment year, proceed and pass separate assessment orders in respect of tax periods in question, after giving due opportunity to the petitioner, in accordance with Law.
6. Further, the period from the date of passing of the impugned order till the date of receipt of this order shall be excluded for the purpose of limitation.
7. Accordingly, the writ petition is disposed of, as indicated above.
8. There shall be no order as to costs. Miscellaneous petitions, if any, shall stand closed.