A Single Consolidated Show Cause Notice or Composite Order Covering Multiple Financial Years is Void Ab Initio for Lack of Jurisdiction

By | June 15, 2026
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A Single Consolidated Show Cause Notice or Composite Order Covering Multiple Financial Years is Void Ab Initio for Lack of Jurisdiction

Issue

Whether the tax authorities have the legal jurisdiction under Section 74 of the GST Act to issue a single, consolidated Show Cause Notice (SCN) and pass a composite assessment order covering multiple financial years, and whether a taxpayer’s participation in such proceedings estops them from challenging its inherent validity under writ jurisdiction.

Facts

  • The Business: The petitioner is a construction entity that was granted government licenses for natural resources and paid the corresponding royalties.

  • The Consolidated Action: For the extensive period spanning July 1, 2017, to August 31, 2021 (covering multiple financial years), Respondent No. 3 issued a single, consolidated SCN proposing a GST demand on the royalty payments along with interest and penalties.

  • Taxpayer’s Response: The petitioner actively replied to the notice, attended the personal hearings, and even requested the department to allow payment of dues via installments.

  • The Order & Recovery: Unmoved, Respondent No. 3 passed a singular composite order confirming the total multi-year tax demand. Following this, Respondent No. 4 issued an aggressive bank recovery notice to freeze the petitioner’s accounts.

  • The Writ Defense: The petitioner filed a Writ Petition challenging the fundamental jurisdiction of a consolidated multi-year notice. The Revenue counter-argued that the writ should be dismissed because the petitioner failed to exhaust the alternate statutory appeal route, and further claimed that the petitioner was blocked (estopped) from challenging the notice after actively participating in the hearings and admitting liability.

Decision

  • Financial Year Separation is Mandatory: The High Court held that the structural scheme of the GST law envisions period-wise or financial-year-wise assessments linked directly to annual returns, each strictly governed by its own independent limitation window under Section 74. Clubbing multiple years into one omnibus SCN or a single composite order is a fatal procedural error.

  • Estoppel Cannot Validate Illegal Acts: The court ruled that actions lacking inherent jurisdiction are coram non judice (before a judge without jurisdiction) and are completely void ab initio (invalid from the outset). Principles of estoppel, waiver, acquiescence, or a taxpayer’s internal admission of liability cannot legally cure or salvage an order that is fundamentally unauthorized by law.

  • Writ Maintainable: Since the consolidated notice struck at the root of the officer’s jurisdiction, the existence of an alternate statutory remedy under Section 107 did not bar the High Court from exercising its extraordinary powers under Article 226.

  • Ruling: The composite SCN, the final assessment order, and the subsequent bank recovery notice were completely quashed. The court ruled in favor of the assessee, granting the department liberty to start fresh by issuing separate, period-wise notices strictly within the legal timelines.

Key Takeaways

  • One Year, One SCN Rule: For tax assessments, each financial year is considered a self-contained, watertight compartment. Even if the underlying transaction or legal dispute (such as GST on royalties) remains identical across half a decade, the Revenue cannot combine multiple years into a single, lazy administrative notice.

  • Jurisdiction Trumps Conduct: If an administrative body acts completely outside its statutory powers, the taxpayer’s cooperative behavior, requests for leniency, or failure to object earlier cannot grant that body legal authority. Jurisdiction cannot be created by mutual consent or procedural acquiescence.

  • The Risk of Consolidation for the Revenue: While issuing a consolidated notice may seem like an efficient administrative shortcut for audit teams, it creates an inherent jurisdictional defect. A successful legal challenge will completely dismantle the entire multi-year tax demand, forcing the department to re-issue separate notices—which may by then be barred by the strict limitation calendars of earlier years.

HIGH COURT OF BOMBAY
Rithwik Projects (P.) Ltd.
v.
Union of India
Nitin B. Suryawanshi and VAISHALI PATIL-JADHAV, JJ.
WRIT PETITION NO. 4061 OF 2026
JUNE  9, 2026
V.D. Sapkal, Sr. Adv. and Abhijit C. Darandale, Adv. for the Petitioner. D.S. Ladda and P. P. Kothari, Advs. for the Respondent.
JUDGMENT
Nitin B. Suryawanshi, J.- Rule. Rule is made returnable forthwith. Heard finally with the consent of the learned Advocates for the parties.
2. This Petition, filed under Article 226 of the Constitution of India, challenges show cause notice dated 29th June, 2022 and the order dated 21st December, 2023 passed by Respondent No.3 and consequential recovery notice dated 21st November, 2025 issued by Respondent No.4, being arbitrary and violative of Articles 14 and 19 (1) (g) of the Constitution of India.
3. The Petitioner is a Private Limited Company, registered under the provisions of the Companies Act, 1956. It is engaged in the business of integrated construction, infrastructure development and management. It is the case of the Petitioner that, in the normal course of business, the Petitioner has received services related to allocation / permission / leasing use of natural resources from the Government and in turn had paid fees and royalties to the government as consideration towards receipt of such services. Royalty was paid by the Petitioner from 1st July, 2017 to 31st August, 2021.
4. A show cause notice dated 29th June, 2022 was issued by Respondent No.3 proposing a demand of total GST of Rs.2,54,40,532/- for the period from 1st July, 2017 to 31st August, 2021, (CGST and MGST of Rs.1,27,20,266/- each) along with proposal to levy interest and imposition of penalty. The Petitioner submitted letter dated 13th September, 2022 and attended personal hearings on 14th September, 2023 and 19th December, 2023 and sought time to make payment of taxes in installments. By the impugned order dated 21st December, 2023, Respondent No.3 confirmed the demand of Rs.2,54,40,532/-along with interest and imposed a penalty of Rs.2,54,40,532/-under section 122 (2) (b) of the Central Goods and Services Tax Act, 2017 (for short “CGST Act”) and Maharashtra Goods and Service Tax Act, 2018 (for Short “MGST Act”).
5. Pursuant to the impugned order, Respondent No.4 issued third party recovery notice dated 21st November, 2025 to the Punjab National Bank, where the Petitioner holds his account, directing the Bank to pay outstanding taxes, by debiting account of the Petitioner. Aggrieved by these actions, the Petitioner has approached this Court.
6. Heard learned Senior Advocate for the Petitioner and learned Advocates for the Respondents, at length. Perused the Memo of the Petition and the reply filed on behalf of the Respondents so also the citations relied on by the parties.
7. By relying on the decision of this Court in Writ Petition No. 2203 of 2025 (filing) Milroc Good Earth Developers v. Union of India 112 GST 596/[2026] 104 GSTL 45 (Bombay), learned Senior Advocate submits that the issues raised in this Petition are squarely covered by the said decision. He submits that the decision in “Milroc Good Earth Developers” (supra), is consistently followed by this Court. He also relied on the decision of the Nagpur Bench in Writ Petition No. 7718 of 2025 Paras Stone Industries v. Union of India 106 GSTL 269 (Bombay) and in Writ Petition No. 736 of 2026 ICAD School of Learning (P.) Ltd. v. UOI [WP No.736 of 2026, dated 6-2-2026]. Reliance is also placed in the decision of coordinate bench of this Court in Writ Petition No. 11644 of 2025 Aasawa Brothers Corporate Avenue v. Union of India  (Bombay), to which one of us (Vaishali Patil Jadhav, J.) is a party. In the said decision the decision in Milroc Good Earth Developers” (supra), is relied on.
8. Learned advocates for the Respondents have strenuously opposed the Petition by relying on the decision of Co-ordinate Bench of this Court in Writ Petition No. 12116 of 2025 Rikhab Chand Jain v. Union of India (SC) and the decision of the Apex Court in Rithwik Projects (P.) Ltd. v. Union of India 112 GST 187/103 GSTL 214 (Bombay) in Civil Appeal No. 6719 of 2012 , to contend that, the Petitioner has alternate efficacious statutory remedy and, therefore, the Writ Petition may not be entertained. They further submitted that since the Petitioner has accepted the liability to pay GST dues and has requested for permission to pay the dues in installments, now the Petitioner cannot challenge the said show cause notice and the order passed by Respondent No.3.
9. With the assistance of learned Senior Advocate and learned Advocates for the Respondents, we have gone through the Writ Petition memo, annexures thereto and the citations relied on by both the sides.
10. On perusal of the judgment in Milroc Good Earth Developers (supra), it is clear that, the issue which fell for consideration of the Co-ordinate bench of this Court at Goa, was “whether it is permissible to issue Show Cause Notice covering different tax periods?” by considering the relevant provisions, it is held :
“19. From the perusal of the entire Scheme, it is evidently clear to us that the statutory provision for assessment of tax for each financial year except the Show Cause Notice to be issued at least 3 months prior to the time limit specified in Section 73 (10) and 74 (10) of the Act, for issuance of assessment order as sub-section (10) provide that the proper officer shall issue the order within a period of five years from the due date for furnishing of annual Return for the financial year to which the tax not paid/short paid or input tax credit wrongly availed or utilized relates to or within five years from the date of erroneous Return. Thus, there is limitation prescribed for demand of tax and its recovery.
The Act of 2017, therefore involve a definite tax period, based on the filing of the Return, which can be either monthly or annual Return and if the assessment is based on annual Return, the tax period shall be relevant financial year.
In the light of the statutory scheme, we find that there is no scope for consolidating various financial years / tax period which is attempted by the impugned Show Cause Notices assailed in the Petition.
26. For the reasons recorded above, by overruling the objections raised by Ms. Desai for entertaining the Petition is merely based on the show cause notice as we find that there is no provision to club various tax periods and apart from the fact that it is also beyond the period of limitation, we find that the action of Respondent No.2 in issuing consolidated show cause notices for multiple assessment years is without jurisdiction and since it is a judicial overreach, we quash and set aside the same.”
11. This decision is consistently followed by this Court at Nagpur Bench in Writ Petition No. 7718 of 2025 and even Coordinate Bench of this Court has followed the same in “Asawa Brothers” (supra). The Petitioner’s case is squarely covered by the ratio in Milroc” (supra), hence, we are inclined to allow the Writ Petition.
12. In Chief Justice of Andhra Pradesh v. L.V.A. Dikshitulu [1979] 1 SCR 26, the Apex Court has held that the order passed by a person lacking inherent jurisdiction would be a nullity. Any order passed by a Court without jurisdiction would be coram non judice being a nullity and principles of estoppel, waiver and acquiescence or even res judicata being procedural in nature, would have no application in a case where an order has been passed by Tribunal / Court which has no authority in that behalf.
13. In “Lalita Panjabrao Phalke v. Jeevan Tulshiram Phalke 2023 (6) Mh.L.J. 619, it is held that,
“50. It is a well settled law that any order passed by a Court without jurisdiction would be coram non judice being a nullity and the same ordinarily should not be given effect to as it is non est i.e. non-existent in the eyes of law. … … …Moreover, any order passed or action taken pursuant to any order which is a nullity or in furtherance thereof, would also be nullities.”
14. In view of the above settled legal position, since the showcause notice and the impugned order are without jurisdiction, the same are void ab initio and cannot be acted upon, irrespective of admission of liability on the part of petitioner.
15. In view of the observations made by us in forgoing paragraphs and as the show-cause notice and the impugned order are wholly without jurisdiction, availability of statutory remedy cannot be a bar to entertain present writ petition.
16. The Respondents relied on the decision of the Apex Court in Rikhab Chand Jain (supra), which was a case under the Customs Act. In that case the Petitioner disabled himself from availing the efficacious statutory remedy (e.g. appeal / reference to the High Court under section 130 / 130A of 1962 Act) by his own fault and did not act within the prescribed time, it was held that he cannot use his failure as ground for the High Court to exercise discretion in his favour under Article 226 of the Constitution of India.
17. For the aforestated reasons, the Writ Petition is allowed. The impugned show cause notice dated 29th June, 2022 and the impugned order dated 21st December, 2023 passed by Respondent No.3 are hereby quashed and set aside. Consequently, the recovery notice dated 21st November, 2025 issued by Respondent No.4 to the Punjab National Bank, is also quashed and set aside. Liberty is granted to the Respondents to issue fresh notices, strictly in accordance with section 74 of the CGST Act for respective financial years, if it is otherwise permissible in law. Rule is made absolute in above terms with no order as to costs.