Composite Assessment Order Covering Multiple Tax Periods

Composite Assessment Order Covering Multiple Tax Periods Under Section 73 Is Invalid and Set Aside

Issue

Whether a single composite assessment order passed under Section 73 covering multiple tax periods across different financial years is legally sustainable.

Facts

Assessee Profile: The petitioner is a partnership firm engaged in providing works contract services to various Government departments and is registered on the rolls of respondent 1.
Composite Order Passed: Respondent 4 passed a single composite assessment order covering multiple distinct tax periods spanning across financial years 2018-2019 to 2021-2022.
Writ Challenge: The petitioner filed a writ petition before the High Court challenging the validity of issuing a single composite order for multiple assessment years.
Revenue’s Position: The Additional Government Pleader (AGP) did not dispute either the factual position of a composite order being passed or the legal position invalidating such orders.

Decision

The High Court held that a composite assessment order covering multiple distinct tax periods cannot be sustained under law.
The impugned composite assessment order covering financial years 2018-2019 to 2021-2022 was set aside.
Respondent 4 was granted liberty to initiate fresh proceedings by issuing separate, period-wise notices and conducting assessments after providing a due opportunity of hearing in accordance with law.
The Court directed that the period from the date of the impugned order until the receipt of the court order shall be excluded for computing statutory limitation.
The issue was decided in favour of the assessee.

Key Takeaways

Year-Wise Notice Requirement: Tax authorities cannot combine multiple financial years into a single demand notice or assessment order under Section 73; each tax period requires an independent notice and adjudication.
Jurisdictional Flaw: Passing a composite assessment order covering separate tax periods constitutes a fundamental procedural defect that invalidates the order.
Limitation Exclusion: When a composite order is quashed with liberty to issue fresh period-wise notices, the intervening litigation period is typically excluded when calculating limitation for the new notices.

HIGH COURT OF ANDHRA PRADESH

P. Venkataramaniah & Co.

Assistant Commissioner ST

Ninala Jayasurya and T.C.D. Sekhar, JJ.

WRIT PETITION No: 2136 of 2025

JULY 8, 2026

S. Suri Babu, Senior Counsel for the Petitioner.

ORDER

1. Heard Mr. S. Suri Babu, learned Senior Counsel for the petitioner. Also heard Mr. Sai Kumar, learned Assistant Government Pleader representing the respondents 1 to 4. With their consent, the writ petition is disposed of at the stage of admission.

2. Petitioner, a Partnership Firm engaged in the business of Work Contract Services to various Departments of the Government is an assessee on the rolls of respondent No.1 with GSTIN No.37AACFP7143H1Z6. Aggrieved by the Assessment Order dated 31.08.2024 passed by the 4^th respondent, the present writ petition is filed by the petitioner.

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 passed by the 4^th respondent for the tax period 2018-2019 to 2021-2022 covering multiple tax periods is impermissible in Law under the provisions of Central Goods and Service Tax 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, 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.”

4. Learned Assistant Government Pleader has not disputed the legal position, much less the factual aspects with regard to passing of a composite order impugned in the writ petition.

5. In view of the factual and legal position, the impugned proceedings dated 31.08.2024 are set aside. However, the 4^th respondent is at liberty to issue separate notices and proceed with the assessments 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, Writ Petition is allowed, as indicated above. No costs. Miscellaneous petitions pending, if any, shall stand closed.