Composite assessment orders spanning multiple financial years

Composite assessment orders spanning multiple financial years under Section 73 are legally unsustainable and invalid.

Issue

Whether the Department can pass a single composite Order-in-Original and summary order in Form GST DRC-07 covering multiple financial years under Section 73 of the CGST/APGST Act.

Facts

Taxpayer Details: The petitioner is a partnership firm registered under the CGST, SGST, and IGST Acts, engaged in providing works contract services.
Composite Orders Issued: The petitioner was served with an Order-in-Original and a summary order in Form GST DRC-07 that combined the demands for two distinct financial years (2020-21 and 2021-22).
Procedural Flaw: The petitioner pointed out that statutory provisions require separate notices and assessment proceedings for each tax period/financial year. Additionally, a show-cause notice was issued after the Order-in-Original had already been passed.
Admitted Position: It was undisputed on record that the impugned Order-in-Original and summary order covered the composite tax period spanning FY 2020-21 and FY 2021-22.

Decision

Composite Orders Unlawful: Relying on the ratio laid down by the Coordinate Bench in S J Constructions v. Asstt. Commissioner, the court held that a single show-cause notice or composite assessment order cannot be issued for more than one tax period or financial year.
Impugned Orders Set Aside: The composite Order-in-Original and the summary order in Form GST DRC-07 were set aside and quashed.
Outcome: The writ petition was allowed in favor of the assessee.

Key Takeaways

Strict Year-Wise Assessment Mandate: Tax authorities must conduct separate assessment proceedings and pass distinct orders for each individual financial year under Section 73.
Invalidity of Multi-Year Summary Orders: Summary orders in Form GST DRC-07 covering combined demands for multiple financial years are procedurally flawed and legally unenforceable.
Prior Show-Cause Notice Essential: Issuing a show-cause notice after passing an Order-in-Original violates principles of natural justice and invalidates the entire assessment process.

HIGH COURT OF ANDHRA PRADESH

C. Eswara Reddy and Co.

Joint Director, Office of the Directorate General of GST Intelligence

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

WRIT PETITION NO. 18602 OF 2025^†

JULY 15, 2026

Shaik Jeelani Basha, Counsel for the Petitioner. P.S.P. Suresh Kumar, Counsel for the Respondent.

ORDER

Ninala Jayasurya, J. – Heard Sri Sheik Jeelani Basha, learned counsel for the petitioner who appeared through online and Sri S.A.V. Sai Kumar, learned Junior Standing Counsel for CBIC.

2. Petitioner, a partnership firm registered under the provisions of the State Goods and Services Tax Act, 2017, the Central Goods and Service Tax Act, 2017, and the Integrated Goods and Service Tax Act, 2017, (for short “the Act”), is engaged in the business of works contract services, aggrieved by Order-in-Original dated 27.03.2025 and Summary of the Order in Form GST DRC-07 dated 29.03.2025, filed the present writ petition on various grounds.

3. Learned counsel for the petitioner while referring to the various averments made in the affidavit filed in support of the writ petition, made submissions inter alia that the order of respondent No.2 covering composite tax period for the different Assessment Years i.e., 2020-21 and 2021-22 is not sustainable in the light of the decisions rendered by this Court in S J Constructions v. Asstt. Commissioner 102 GSTL 348 (Andhra Pradesh)/W.P No.11028 of 2025, and seeks to allow the writ petition by setting aside the impugned orders.

4. On the other hand, Sri S.A.V. Sai Kumar, learned Assistant Government Pleader, submits that the petitioner has remedy of appeal before the Appellate Tribunal and instead of filing an appeal, the present writ petition is filed and the same cannot be entertained.

5. This Court has considered the submissions made and perused material on record.

6. Admittedly, Order-in-Original dated 27.03.2025 and Summary of the Order of the respondent No.2 covers the composite tax period of 2020-21 and 2021-22. At this stage, the learned counsel also submits that in fact, show-cause notice dated 01.09.2025 was issued by the respondent No.1, after the said Order-in-Original was passed.

7. Be that as it may, in S J Constructions (supra) & batch, a coordinate Bench of this Court vide order dated 17.09.2025 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.”

8. In the light of the above cited decision and for reasons alike, the impugned orders are set aside. Writ Petition is allowed, as indicated above.

9. Needless to observe that respondent No.2 is at liberty to issue separate notices in respect of relevant tax periods and proceed with the assessments in accordance with law, after giving opportunity to the petitioner.

10. 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. No costs. Miscellaneous petitions pending, if any, shall stand closed.