Kerala High Court Invalidates Single Show Cause Notice Issued for Multiple GST Financial Years
Background and Overview
A significant ruling has emerged from the Kerala High Court in the matter of Aranmula Chit Funds Pvt. Ltd. Vs Deputy Commissioner of State Tax (Intelligence), where the Court examined the legal validity of a composite show cause notice that bundled multiple financial years into a single proceeding under GST law. The judgment reinforces a well-established judicial position that tax authorities cannot club several assessment years into one omnibus notice and must instead issue distinct notices for each assessment year independently.
This case has considerable relevance for assessees who may be facing similar consolidated notices from GST authorities covering extended time periods, and it underscores the procedural discipline that revenue authorities are required to follow while initiating enforcement actions.
Facts of the Case
The petitioner, Aranmula Chit Funds Pvt. Ltd., approached the Kerala High Court by way of a writ petition, challenging an order designated as Ext.P1, which had been passed by the Deputy Commissioner of State Tax (Intelligence) — the second respondent in the matter.
The impugned order was remarkable in its scope, as it purported to cover an extended stretch of financial years from 2017-18 all the way through 2023-24 — effectively spanning seven consecutive assessment years within a single order that emanated from a single composite show cause notice.
The petitioner's core grievance was straightforward yet legally weighty: the bundling of multiple assessment years into one composite show cause notice and the consequential order was fundamentally flawed and could not survive judicial scrutiny.
Legal Challenge Raised by the Petitioner
The petitioner's counsel mounted the challenge primarily on the ground that issuing a composite show cause notice encompassing multiple assessment years is not a legally permissible course of action. This argument was not raised in isolation — it was firmly anchored in binding precedents already laid down by the Kerala High Court itself.
Specifically, reliance was placed on two Division Bench decisions of the Kerala High Court:
- Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories — 2025 KHC OnLine 2491
- Tharayil Medicals (M/s.), Thrissur v. Deputy Commissioner, Thrissur — 2025 KHC OnLine 467
Both of these precedents had categorically held that the issuance of a composite notice covering multiple assessment years is legally unsustainable. The petitioner contended that since the present order was built upon precisely such an impermissible composite notice, the entire edifice of the proceeding was liable to be set aside.