Gauhati High Court grants interim protection against GST demand arising from consolidated SCN
Background of the dispute
Quantum Infratech Vs Union of India came before the Hon’ble Gauhati High Court as a writ petition challenging GST proceedings initiated through a single consolidated Show Cause Notice (SCN) covering six distinct financial years, namely 2017-18 to 2022-23. The assessee is a partnership firm registered under the GST regime and engaged in construction of residential properties.
The controversy centers around whether the Department can validly issue one composite SCN for several financial years under Section 74 of the CGST Act, 2017, instead of issuing separate SCNs for each financial year. The assessee argued that such a consolidated notice violates the statutory scheme of Section 74 and has already been disapproved by several High Courts.
Pursuant to the consolidated SCN dated 03.08.2024, an Order-in-Original dated 04.02.2025 was passed against the assessee. This order was subsequently confirmed by an Order-in-Appeal dated 26.08.2025. Aggrieved by these adjudication and appellate orders, the assessee invoked the writ jurisdiction of the Gauhati High Court.
In the writ petition, interim protection was sought from any coercive steps to recover the demand raised under the impugned orders, on the ground that the very foundation—namely, the consolidated SCN—was legally unsustainable.
Assessee’s key contentions
Challenge to consolidated SCN under Section 74
The assessee’s principal argument was that the Department’s action in issuing a single SCN covering multiple years is inconsistent with the statutory framework of Section 74 of the CGST Act, 2017. According to the assessee, the provision presupposes year-wise determination of tax, interest and penalty, and therefore each financial year must be the subject of an independent notice.
The assessee emphasized that for the six financial years (2017-18 to 2022-23), only one composite notice dated 03.08.2024 was issued. This was asserted to be per se illegal and a foundational defect that vitiates subsequent proceedings, including:
- The Order-in-Original dated 04.02.2025, and
- The Order-in-Appeal dated 26.08.2025.
Reliance on precedents of other High Courts
Counsel for the assessee placed strong reliance on a line of judicial precedents where consolidated SCNs for multiple financial years have been disapproved. Specifically, reference was made to decisions of:
- Madras High Court
- Bombay High Court
- Allahabad High Court
- Karnataka High Court
In those cases, the respective High Courts had elaborately examined the scheme of Section 74 and concluded that:
Separate SCNs for each financial year are mandatory, and any consolidated SCN purporting to cover multiple years is inconsistent with the provisions of the Act.
On this basis, the assessee urged that the present matter raises identical legal issues, and therefore similar relief should be granted by the Gauhati High Court—at least at the interim stage—to protect the assessee from coercive recovery.
Relief sought
Given that the challenge went to the validity of the very initiation of proceedings via a consolidated SCN, the assessee requested:
- Setting aside or staying the effect of the consolidated SCN and the consequential orders; and