Composite show cause notice and consequential adjudication order covering multiple financial years are legally unsustainable

By | October 13, 2026
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Composite show cause notice and consequential adjudication order covering multiple financial years are legally unsustainable

Issue

  • Whether a composite Show Cause Notice (SCN) and the consequential Order-in-Original (OIO) covering multiple financial years (2022-23 to 2024-25) are legally sustainable under the GST law.

Facts

  • Assessment Periods: The case pertains to multiple financial years spanning from FY 2022-23 to FY 2024-25.
  • Issuance of Composite SCN & OIO: The tax authority issued a single composite Show Cause Notice (Ext.P2) covering multiple financial years and subsequently passed a consequential Order-in-Original (Ext.P4) based on that notice.
  • Writ Petition: The petitioner challenged both Ext.P2 SCN and Ext.P4 OIO in a writ petition, seeking a declaration that composite adjudication across multiple financial years is legally impermissible.
  • Binding Judicial Precedents: The petitioner relied on Division Bench rulings in Joint Commissioner (Intelligence & Enforcement) v. Lakshmi Mobile Accessories and Tharayil Medicals v. Deputy Commissioner, which held that consolidated/composite SCNs for multiple assessment years are unsustainable.

Decision

  • The court held that a composite Show Cause Notice covering multiple assessment years is unsustainable in law, and consequently, the resultant adjudication order cannot stand. [Paras 2 & 3]
  • The court quashed both the composite Show Cause Notice (Ext.P2) and the consequential Order-in-Original (Ext.P4). [Paras 2 & 3]
  • The court granted liberty to the respondent authority to issue separate, year-wise show cause notices for each relevant assessment year. [Paras 2 & 3]
  • The court directed that the period from the date of Ext.P4 until the receipt of a certified copy of the judgment be excluded while computing limitation for fresh proceedings. [Paras 2 & 3]
  • All other legal and factual contentions were kept open. [Paras 2 & 3]

Key Takeaways

  • Invalidation of Multi-Year Adjudications: Issuing a single composite SCN for multiple tax periods renders both the notice and any consequential adjudication order legally void.
  • Mandatory Separate Notices: Revenue authorities must issue individual, year-specific show cause notices for each financial year to ensure valid proceedings.
  • Limitation Protection: When a composite notice and order are quashed on jurisdictional grounds, the period spent during litigation is excluded for the purpose of computing limitation for fresh year-wise notices.
HIGH COURT OF KERALA
K.U. Mohammed Niyas
v.
Assistant Commissioner of Central Tax & Central Excise
ZIYAD RAHMAN A.A., J.
WP(C) NO. 33350 OF 2026
SEPTEMBER  29, 2026
P.S. Soman, Smt. T. Radhamony and Smt. S. Veena, Advs. for the Petitioner.
JUDGMENT
1. This writ petition is submitted by the petitioner challenging Ext.P2 composite Show Cause Notice which was issued by the respondents for multiple financial years namely, 2022-2023 to 2024-2025 and Ext.P4 Order-in-Original. 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 [2025] 171  108 GST 750/95 GSTL 356 (Kerala)/[2025 KHC OnLine 149] and Tharayil Medicals v. Deputy Commissioner, SGST Department, Thrissur   (Kerala)/[2025 KHC OnLine 467].
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.
3. In such circumstances, in the light of the principles laid down by this Court in the above referred judgments, an interference is required. Accordingly, this writ petition is disposed of, quashing Ext.P2 and Ext.P4, granting liberty to the respondent to issue separate notices for the relevant assessment years. However, the period from the date of Ext.P4 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.