Composite notices for multiple assessment years are legally unsustainable under the CGST Act.

JUDGMENT

[WP(C) Nos.19658/2025, 19810/2025, 19831/2025, 19836/2025, 19885/2025, 19900/2025, 19946/2025, 19948/2025, 20909/2025, 22396/2025 and 22551/2025]

In all these cases, the challenge is raised by the respective petitioners, against the composite notices and orders issued under the provisions of the CGST Act , for multiple assessment years. According to the petitioners such a composite notice is not legally sustainable in view of the principles laid down by a Division Bench of this court in Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories [ 2025 KHC OnLine 149 ] and Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur [2025 KHC OnLine 467]. In the said decisions, issuance of composite notices and orders was found to be not legally sustainable.

2. The learned standing counsel appearing for the respondents in W.P.(C) Nos.19658/2025, 19831/2025 and 22396/2025, filed a statement opposing the reliefs sought in these writ petitions by placing reliance upon the observations made by the Constitution Bench of the Honourable Supreme Court in The State of Jammu and Kashmir and Others v. Caltex (India) Ltd [1965 SCC OnLine SC 168 : (1966) 17 STC 612]. It was pointed out by the learned standing counsel for the respondents that, the observations made in the said decision were not brought to the notice of the Division Bench of this Court while deciding Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories [ 2025 KHC OnLine 149 ] and Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur [2025 KHC OnLine 467].

3. I have carefully gone through the observations in the Caltex (India) Ltd's case (supra) and find that the observations therein cannot be made applicable to the cases at hand. Firstly, the said decision was rendered under the provisions of the Jammu and Kashmir Motor Spirit (Taxation of Sales) Act, 2005, where the scheme of the Act was different. Secondly, the observations relied on by the learned Standing Counsel for the respondents would indicate that, the competence of the officer to issue a composite notice for multiple assessment years was not exactly the question considered in the said decision.

4. In the said decision, while challenging the judgment passed by the High Court, among other contentions, the State also raised a contention that, the High Court committed an error in taking the view that, the taxing authorities were not entitled to levy sales tax for the period from January 1, 1955 to September 6, 1955, because the assessment was a composite one relating to the entire period from January 1, 1955 to May, 1959, and the assessment which was bad in part, has infected throughout and must be treated as invalid. This contention was accepted by the Honourable Supreme Court and held that, the assessee will not be entitled to any benefit with regard to the transaction of sales between January 1, 1955 to September 6, 1955. Thus, even though the Honourable Supreme Court found that the assessment was bad for the period from January 1, 1955 to May, 1959, the reasons that prompted the High Court to arrive at that conclusion, was not applicable to the period from January 1, 1955 to September 6, 1955. The Honourable Supreme Court also found that, as far as the transactions relating to the said period are concerned, the same are separable for the purpose of assessment. Therefore, it can be seen that, the observations made therein, were with respect to the peculiar facts and circumstances of the case existed therein and it did not deal with the general power of the officer concerned to issue a composite notice or composite order.

5. On the other hand, in Lakshmi Mobiles Accessories and Tharayil Medicals's cases (supra) the Division Bench of this Court specifically raised this as an issue and answered the same after analysing the various provisions under the CGST Act and the scheme for assessment. After doing such exercise, this Court came to a def