Karnataka High Court sets aside GST demand based on clubbed tax periods

Background of the dispute

The matter before the Karnataka High Court arose from a writ petition filed by S.R.S Travels And Logistics Private Limited challenging:

  • A show cause notice dated 21.06.2024 bearing No. 34/2024-25 (DIN: 202406DSS00000007AF), and
  • A consequential Order-In-Original No. 90/2024-25 (GST-JC) vide DIN- 2025025700000000E04B dated 03.02.2025.

Both actions had been initiated under the GST regime, proposing reversal of input tax credit (ITC) for the period 2019-20 to 2021-22 (up to July).

The assessee approached the High Court seeking:

  1. Quashing of the impugned show cause notice relating to the alleged wrongful availment of ITC for multiple years, and
  2. Quashing of the adjudication order passed thereafter, with a direction to drop the proceedings for the entire aforesaid period.

The core challenge was directed against the clubbing of several tax periods in a single composite show cause notice issued under the CGST/KGST framework.

Reliefs sought in the writ petition

The petition specifically prayed for:

  • A writ of certiorari (or any appropriate writ/direction) to set aside the show cause notice dated 21.06.2024 and to direct that proceedings for ITC reversal for 2019-20 to 2021-22 (up to July) be dropped;
  • A similar writ to quash the Order-In-Original dated 03.02.2025, again seeking closure of proceedings for the same period; and
  • Any other relief considered just and proper in the facts of the case.

The assessee’s position was that the entire proceedings were legally flawed because they were initiated through a consolidated notice covering multiple financial years, which was asserted to be contrary to the statutory scheme of the CGST/KGST Acts.

While multiple grounds were argued by both sides, the High Court confined itself to the primary jurisdictional issue, namely:

Whether the GST authorities can validly issue a single/composite show cause notice under Section 73 or Section 74 of the CGST/KGST Act covering multiple tax periods / financial years, and whether such a notice and consequential proceedings can be sustained.

The Court noted that this precise controversy had already been examined and decided in an earlier judgment in M/S Pramur Homes And Shelters Vs. The Union of India and Ors. in WP No.33081/2025 dated 11.12.2025.

Accordingly, instead of re-examining the matter afresh, the Court directly applied the ratio of the earlier decision.

Reference to precedent: Pramur Homes and Shelters

In M/S Pramur Homes And Shelters Vs. The Union of India and Ors., the Karnataka High Court had formulated two specific issues:

  1. 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?”

  2. Second issue

    “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?”

Both questions were answered in favour of the assessee in that case.

Finding on clubbing of multiple periods

On the first issue, the Court in Pramur Homes and Shelters categorically held: