A single composite show cause notice issued under GST covering multiple financial years is legally impermissible and void.

By | August 10, 2026
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A single composite show cause notice issued under GST covering multiple financial years is legally impermissible and void.

Issue

Whether issuing a single consolidated or composite show cause notice encompassing multiple financial years under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017 / Kerala Goods and Services Tax Act, 2017 is legally sustainable.

Facts

  • Consolidated Notice Issued: The tax authorities issued a single consolidated show cause notice (Ext.P1) along with a summary (Ext.P2) covering multiple financial years to the petitioner.
  • Legal Challenge: The petitioner filed a writ petition before the High Court challenging the legal validity of issuing a single composite show cause notice across different assessment periods.
  • Grounds of Challenge: The petitioner submitted that combining multiple financial years into one show cause notice violates settled legal principles established by Division Bench precedents.

Decision

  • Impermissibility of Composite Notices: Relying on Division Bench precedents, the Court held that issuing a composite show cause notice for multiple assessment years is legally impermissible.
  • Quashing of Orders: The Court allowed the petition, quashing the consolidated show cause notice (Ext.P1) and the summary statement (Ext.P2).
  • Liberty to Issue Year-Wise Notices: Liberty was granted to the tax authorities to initiate fresh proceedings by issuing separate, individual show cause notices for each relevant financial year.
  • Limitation Period Exclusion: The time elapsed from the date of issuance of the invalid composite notice until the receipt of the certified copy of the judgment was ordered to be excluded when computing statutory limitation for fresh proceedings.
  • Preservation of Contentions: All rival contentions on the merits were left open for fresh adjudication.

Key Takeaways

  • Assessment Year as a Separate Unit: Under GST law, each financial year represents an independent assessment period; therefore, tax authorities must issue separate show cause notices for each year.
  • Invalidity of Consolidated Demands: Pooling tax demands across multiple financial years into a single notice creates a procedural defect that renders the show cause notice legally void.
  • Saved Limitation Period: Quashing a composite notice on procedural grounds does not bar the Revenue from initiating fresh proceedings, as the duration spent during the writ litigation is excluded from the limitation calculation.
HIGH COURT OF KERALA
Choice Color Coats
v.
Deputy Director Directorate General of Goods and Services Tax Intelligence
ZIYAD RAHMAN A.A., J.
WP(C) NO. 25600 OF 2026
JULY  28, 2026
Smt G. Mini, P. J. Anilkumar, P. S. Sree Prasad, Satyajith K. Warrier, Advs. and A. Kumar, Sr. Adv. for the Petitioner. Sreelal N Warrier and V. Girishkumar, SCs for the Respondent.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P1 consolidated Show Cause Notice which was issued by the respondents for multiple financial years namely, 2023-2024 to 2025-2025 and Ext.P2 summary of show cause notice. The main challenge raised against the sustainability of the same is that, issuance of a composite notice for multiple assessment years was found to be not legally sustainable as per the decision rendered by this Court in Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories 108 GST 750/95 GSTL 356 (Kerala)/[2025 KHC OnLine 149] and Tharayil Medicals v. Deputy Commissioner, SGST Department, Thrissur  (Kerala)/[2025 VIL 356 KER].
2. After hearing the learned counsel for the petitioner and the learned Standing Counsel for the respondents, I find merits in the said submission, in view of the fact that, such a finding was indeed entered into by the Division Bench of this Court in the decisions referred to above.
In such circumstances,, in the light principles laid down by this Court in the above referred judgments, an interference is required. Accordingly, this writ petition is disposed of, quashing Ext.P1 consolidated Show Cause Notice which was issued by the respondents for multiple financial years namely, 2023-2024 to 2025-2025 and Ext.P2 summary of show cause notice, granting liberty to the respondent to issue separate notices for the relevant assessment years. However, the period from the date of issuance of composite notice till the date of receipt of certified copy of the judgment shall be excluded while computing the period of limitation for initiating fresh proceeding. All the other contentions of the parties are left open.