Single Composite Assessment Order Covering Multiple Tax Periods Under Section 74 Is Legally Impermissible
Issue
Whether passing a single composite assessment order under Section 74 covering multiple financial years (2020-21 to 2024-25) is legally valid under GST law.
Facts
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Assessment Periods: Tax determination proceedings under Section 74 were initiated against the assessee for FYs 2020-21, 2021-22, 2022-23, 2023-24, and 2024-25 (up to December 2024).
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Composite Order Passed: The First Respondent issued a single, combined assessment order covering all the aforementioned tax periods simultaneously.
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Legal Challenge: The assessee challenged the composite order via a writ petition, asserting that issuing a single order for multiple assessment years is impermissible under the GST framework.
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State Concession: The Assistant Government Pleader did not dispute the legal position or the factual matrix regarding the issuance of the composite order.
Decision
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Composite Order Quashed: The impugned single composite assessment order was set aside as legally unsustainable.
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Liberty to Re-adjudicate: The First Respondent was permitted to issue fresh, separate period-wise assessment orders after granting the assessee a due opportunity of being heard in accordance with the law.
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Conditional Relief: Relief was made subject to the assessee depositing 20% of the disputed tax within eight weeks, allowing set-off for any amounts already paid post-impugned order.
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Limitation Exclusion & Revocation: The period between the date of the impugned order and the receipt of the court order was excluded for limitation purposes, and all consequential recovery proceedings were revoked. Held in favour of the assessee.
Key Takeaways
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Period-Wise Adjudication Required: GST law requires individual, period-wise assessment orders; combining multiple financial years into a single composite order vitiates the adjudication process.
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Jurisdictional Flaw: Passing a unified order for distinct assessment periods deprives taxpayers of period-specific defenses and procedural safeguards provided under Section 74.
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Fresh Proceedings Permitted: Quashing a composite order on procedural grounds does not prevent tax authorities from re-initiating separate, lawful proceedings for each relevant financial year.
HIGH COURT OF ANDHRA PRADESH
PR Industries
v.
Assistant Commissioner ST
Ninala Jayasurya and T.C.D. Sekhar, JJ.
WRIT PETITION NO. 22160 OF 2026
AUGUST 6, 2026
G. Narendra Chetty, Counsel for the Petitioner.
ORDER
Ninala Jayasurya, J. – Heard learned counsel for the petitioner and Mr. S.A.V. Sai Kumar, learned Assistant Government Pleader for Commercial Tax appearing for respondent Nos.1 & 2. 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 17.09.2025 under Section 74 of Central Goods and Service Tax Act (in short ‘CGST Act’). Aggrieved by the said order dated 17.09.2025 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 2020-21, 2021-22, 2022-23, 2023-24 and 2024-25 (upto December, 2024) 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 [2025] 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 issuance of composite order impugned in the writ petition.
5. In view of the factual and legal position, the impugned order dated 17.09.2025 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. This order shall be subject to the condition of the petitioner depositing 20% of the disputed tax, within a period of eight (08) weeks, from the date of receipt of this order. Any payment made by the petitioner, after the impugned order, had been passed, shall be set off, for the purpose of calculating the aforesaid 20%.
7. 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.
8. In view of setting aside of impugned order, all consequential proceedings shall stand revoked.
9. Accordingly, the writ petition is disposed of, as indicated above. There shall be no order as to costs. Miscellaneous petitions, if any, shall stand closed.