Issuing composite notices under the CGST/SGST Act for multiple assessment years is unsustainable as it violates principles of fair adjudication and results in prejudice to taxpayers.

JUDGMENT :

ZIYAD RAHMAN A.A., J.

1. The common issue that arises in all these writ petitions is relating to the sustainability of the notices issued under Sections 73 and 74 of the CGST/SGST Act 2017 in the form of a composite notice for multiple assessment years. The learned counsel appearing for the petitioners contend that the issues raised regarding the composite notice and order is already decided by a Division Bench of this Court in Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobile Accessories [2025 KHC OnLine 149] and Tharayil Medicals v. The Deputy Commissioner [2025 KHC Online 467] However, the contention of the learned Government Pleader for the State of Kerala as well as the Senior Panel counsel appearing for the Central Government is that, there is no prohibition in the Act, against the issuance of a composite notice for multiple assessment years and the decisions rendered by the Delhi High Court upholding the validity of such notices were already upheld by the Honourable Supreme Court by dismissing the SLPs filed against the said decisions. Therefore, in the light of the above, no interference is warranted in the impugned notices issued for multiple years.

2. As observed above, the only question that arises for consideration is with regard to the competence of the officers concerned for issuing a composite notice under the provisions of the CGST Act for multiple assessment years. In fact, in Lakshmi Mobile (supra), this Court elaborately considered the aforesaid question, after referring to the scheme of the CGST Act, by specifically referring to various provisions in the said Act and came to a definite conclusion that such notices are unsustainable in view of the fact that, it causes serious prejudice to the tax payers for various reasons. Paragraph 7 and 8 of the Judgment rendered in Lakshmi Mobile (supra) are relevant in this regards, which reads as follows:

7. It is clear from the said statutory provisions that the power of the proper officer under Section 74(1) is to determine whether any of the factors leading to tax evasion exist in relation to an assessee during any financial/assessment year and initiate proceedings under the said Section within the time frame contemplated under Section 74(1) of the CGST Act. The said exercise is to be conducted in relation to each of the years in which such pre-conditions exist for the invocation of the power under Section 74(1). While there may be cases where the data available with the proper officer is such that it suggests the existence of pre-conditions for more than one financial/assessment years, the proper officer should ideally issue separate show cause notices to cover the different financial/assessment years since the period available to the Department for adjudication of the show cause notices varies depending upon the due date for furnishing of annual return for that year. In our view, consolidated show cause notices covering multiple financial/assessment years can be issued only in circumstances where the statutory provision provides for a common period for initiation and completion of the adjudication. For instance, under Section 28 of the Customs Act, a show cause notice invoking the extended period of limitation of five years has to cover a prior period of five years ending with the date of issuance of the show cause notice. Similar was the provision under Section 11A of the erstwhile Central Excise Act. Under both of the above provisions, the show cause notices issued, irrespective of whether it covered a single financial/assessment year or multiple years, had to be adjudicated within a fixed period of one year from the date of the show cause notice. The scheme of adjudication is different under the CGST Act. Under Section 74 of the CGST Act, the end ter