Single GST SCN for Multiple Years is Illegal: MADRAS High Court
The MADRAS High Court ruled that the issuance of a single, consolidated Show Cause Notice (SCN) or adjudication order covering tax demands for multiple distinct financial years is impermissible under the Goods and Services Tax (GST) Act and must be quashed.
Key Points of the Judicial Ruling
- Violation of Statutory Provisions: The court held that each financial year under GST constitutes a separate tax period with its own specific due dates, assessment procedures, and distinct limitation periods prescribed under the Act (such as Section 73 and Section 74). Consolidating demands for different years into a single SCN/order is a procedural illegality that violates these statutory provisions.
- Need for Year-Specific Orders: The tax authority must strictly adhere to the GST framework, which necessitates the issuance of separate, year-specific SCNs and adjudication orders. This ensures that the proper officer correctly calculates tax, interest, and penalty and, most importantly, maintains strict compliance with the time limits applicable to each financial year.
- Relief to the Taxpayer: By quashing the consolidated SCN and subsequent order, the court effectively directed the tax authorities to initiate fresh proceedings, if necessary, by issuing proper, distinct notices for each financial year. This decision provides significant relief to taxpayers by preventing procedural shortcuts that could circumvent statutory safeguards and time limitations.