Single Composite Assessment Order Under Section 74 for Multiple Financial Years Is Invalid and Unsustainable

By | August 21, 2026
0 Comment
Single Composite Assessment Order Under Section 74 for Multiple Financial Years Is Invalid and Unsustainable
Issue
Whether a single composite assessment order passed under Section 74 covering multiple distinct financial years (FY 2019-20 and FY 2020-21) is legally valid.
Facts
  • Petitioner’s Status: The petitioner is a registered firm under the CGST Act / Andhra Pradesh Goods and Services Tax Act, 2017.
  • Issuance of Composite Order: The 1st respondent issued a single composite assessment order under Section 74 for both FY 2019-20 and FY 2020-21.
  • Legal Challenge: The petitioner filed a writ petition challenging the order on the ground that multiple tax periods cannot be combined into a single assessment order.
  • Revenue’s Position: The Standing Counsel for the Revenue did not dispute the legal position or the factual position regarding the issuance of the composite order.
Decision
  • Decided in favor of the assessee (matter remanded).
  • The High Court held that distinct tax periods require separate adjudications under Section 74, making the single composite order legally unsustainable.
  • The impugned composite assessment order was set aside.
  • The respondent was permitted to issue separate notices/orders for each assessment year and proceed with fresh adjudications in accordance with the law after providing due opportunity of being heard to the assessee.
  • The period from the date of the impugned order until the receipt of the court order was ordered to be excluded for calculation of limitation.
KeyTakeaways
  • Separate Orders for Distinct Tax Periods: Under Section 74, each assessment year or tax period constitutes an independent cause of action requiring separate notices and separate adjudication orders.
  • Invalidity of Composite Adjudication: Issuing a single bundle or composite demand order across multiple financial years is a fundamental jurisdictional error that renders the order liable to be quashed.
  • Exclusion of Limitation Period: When setting aside invalid orders and remanding the matter, courts generally exclude the intervening litigation period to allow the Department to initiate fresh, legally compliant proceedings.
HIGH COURT OF ANDHRA PRADESH
Jubilant Avenues (P.) Ltd.
v.
Superintendent of Central Tax
Ninala Jayasurya and T.C.D. Sekhar, JJ.
WRIT PETITION NO. 21486 OF 2026
AUGUST  5, 2026
Peddibhotla Venkata Sai Rajesh for the Petitioner.
ORDER
Ninala Jayasurya, J.- Heard learned counsel for the petitioner and Ms. Santhi Chandra, learned Senior Standing Counsel for Income Tax Department 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 30.12.2025 under Section 74 of Central Goods and Service Tax Act (in short „CGST Act’). Aggrieved by the said order dated 30.12.2025 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 2019-20 and 2020-21 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 parimateria 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 Standing Counsel 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 30.12.2025 is set aside. However, the 1st respondent is at liberty to issue separate orders for each assessment year 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, 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.