Karnataka HC Invalidates GST Notice Covering Multiple Financial Years in Single Proceeding
Introduction
The Karnataka High Court has set aside GST proceedings initiated through a consolidated show cause notice covering several financial years in a single document. In the matter of S.R.S Travels And Logistics Private Limited Vs Additional Director of GST Intelligence, the Court ruled that combining multiple tax periods in one composite notice under the GST framework violates statutory provisions and renders the entire proceeding jurisdictionally invalid.
The petitioner company had approached the High Court seeking judicial intervention against a show cause notice issued on 21.06.2024 and a subsequent adjudication order passed on 03.02.2025. The revenue authorities had initiated proceedings for reversal of input tax credit spanning from financial year 2019–20 through July 2021–22, consolidating all these periods into a single notice and order.
Background of the Case
The assessee challenged both the initial notice and the final order passed by the GST authorities. The core grievance centered on the methodology adopted by the department in clubbing distinct tax periods into one consolidated proceeding. The petitioner contended that this approach was fundamentally flawed and contrary to the scheme envisaged under the GST statutes.
The matter involved reversal of input tax credit for a duration spanning approximately two financial years. The revenue authorities had issued a composite show cause notice bearing number 34/2024-25 with DIN: 202406DSS00000007AF dated 21.06.2024, followed by an Order-in-Original No. 90/2024-25 (GST-JC) bearing DIN- 2025025700000000E04B dated 03.02.2025.
Relief Sought by the Petitioner
The petitioner sought multiple reliefs from the High Court:
Quashing of the Show Cause Notice: The assessee requested issuance of a writ of certiorari or any appropriate writ to set aside the impugned show cause notice dated 21.06.2024, and direct the respondent authorities to drop proceedings for reversal of input tax credit for the period covering 2019-20 to 2021-22 (up to July).
Quashing of the Adjudication Order: The petitioner also sought quashing of the Order-In-Original No. 90/2024-25 (GST-JC) dated 03.02.2025 passed by the fourth respondent, with directions to drop proceedings for the same period.
Any Other Appropriate Relief: The petitioner additionally sought any other order that the Court deemed fit and proper considering the facts and circumstances of the case.
Judicial Precedent Applied
While both parties advanced various contentions supporting their respective positions, the Hon'ble Court observed that the central controversy was comprehensively addressed by an earlier judicial pronouncement of the same Court. The precedent case was M/S Pramur Homes And Shelters Vs. The Union of India and Ors. decided in WP No.33081/2025 dated 11.12.2025.
Issues Framed in Pramur Homes Case
In the precedent judgment, the Karnataka High Court had formulated two critical questions for determination:
First Issue: 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?
Second Issue: Whether a composite show cause notice covering multiple tax periods/financial years under Section 74 of the CGST/ KGST Act, 2017 warrants interference by the Court?
Holdings in Pramur Homes Case
The Court in Pramur Homes And Shelters had ruled decisively on both issues in favor of the assessee.
On the First Issue
The Court held:
Point No.(i) is accordingly answered in favour of the petitioner/tax payer/assessee by holding that clubbing/ consolidation/ bunching/ combining of multiple tax periods/financial years in a Solitary/Single/Composite Show cause notice issued under Section 73/74 of the CGST/KGST Act is illegal, invalid, impermissible and without jurisdiction or authority of law and contrary to the provisions of the CGST/KGST Act.
This categorical declaration established that the practice of consolidating multiple tax periods in a single notice is fundamentally contrary to the statutory scheme and exceeds the authority conferred upon revenue officers.
On the Second Issue
Regarding the specific challenge to the composite notice, the Court held: