Case Note & Summary
The petitioner, a partnership firm engaged in real estate development and registered under the Central Goods and Services Tax Act, 2017, filed a writ petition under Article 226 of the Constitution challenging a show cause notice dated 30.09.2025 issued by the Additional Commissioner of Central Tax, Mysuru Commissionerate. The impugned notice proposed a demand of Rs.11,86,86,292 towards tax, interest and penalty for the assessment periods covering financial years 2019-20 to 2023-24. The petitioner sought a writ of certiorari to quash the notice, a writ of prohibition restraining further proceedings, and a declaration that transfer of development rights under joint development agreements and sale of developed plots and apartments post-completion certificate do not constitute 'supply' under Section 7 read with Schedule III of the CGST Act and are not exigible to GST. During the preliminary hearing, the primary ground urged was that the show cause notice was composite, clubbing multiple financial years and tax periods, which was impermissible and contrary to the CGST Act and binding judicial precedents. The petitioner relied on sixteen judgments of various High Courts holding that a single notice cannot cover multiple tax periods. The respondents contended that there was no express prohibition in the CGST Act against clubbing multiple periods, especially when transactions spanned across years, and relied on a circular dated 16.09.2025 and three judicial decisions. After hearing submissions, the court framed two issues for determination: first, the permissibility in law of clubbing multiple tax periods in a single show cause notice under Sections 73 and 74 of the CGST/KGST Act; and second, whether the impugned notice warranted interference. The court then extracted the texts of Sections 73 and 74 to examine the statutory scheme. The available extract ends abruptly while reproducing Section 74, and consequently the final order and decision of the court are not known.
Headnote
A) Taxation - Goods and Services Tax - Validity of Composite Show Cause Notice - Sections 73, 74 Central Goods and Services Tax Act, 2017; Sections 73, 74 Karnataka Goods and Services Tax Act, 2017 - The court examined whether a single show cause notice could encompass multiple tax periods from 2019-20 to 2023-24 - The petitioner contended that clubbing of multiple financial years in one notice is illegal, arbitrary, without jurisdiction and contrary to the statutory scheme; the revenue submitted that no provision expressly prohibits such clubbing - The court framed two issues for determination after hearing arguments and extracting the relevant statutory provisions but the final decision is not included in the available extract (Paras 7-8).
Issue of Consideration
Whether clubbing/consolidation/bunching/combining of multiple tax periods/financial years in a Single/Composite Show cause notice issued under Section 73 / 74 of the CGST/ KGST Act , 2017 is permissible and valid in law; and Whether the impugned Show cause notice dated 30.09.2025 issued by the 4th respondent to the petitioner for the tax periods/financial years from 2019-20 to 2023-24 under Section 74 of the CGST/ KGST Act, 2017 warrants interference by this Court in the present petition
Law Points
- Whether clubbing of multiple tax periods in a single show cause notice under Section 73/74 of CGST Act is permissible and valid in law
