Validity of Multi-Year GST Show Cause Notices: Bombay High Court Escalates Dispute to Larger Bench

The adjudication landscape under the indirect tax regime has recently witnessed significant turbulence regarding the procedural validity of clubbing multiple financial years into a single demand notice. In a pivotal development, the Bombay High Court, while hearing the matter of M/s Rollmet LLP & Ors v. Union of India & Ors, has critically examined the legality of consolidated show-cause notices issued under the Central Goods And Services Tax Act, 2017.

Recognizing a profound split in judicial precedents across various High Courts and acknowledging the complex interplay of statutory limitations, the Division Bench has referred the controversy to a Larger Bench. This article provides an in-depth analysis of the arguments presented, the statutory provisions in question, and the broader implications for an assessee facing multi-year tax demands.

The Factual Matrix and Core Controversy

Numerous writ petitions were filed before the Bombay High Court by an aggrieved assessee group (collectively referred to as the Petitioners). These entities had been served with composite show-cause notices invoking Section 73 and/or Section 74 of the Central Goods And Services Tax Act, 2017. The fundamental grievance was that the revenue department had amalgamated tax demands, alleged shortfalls, and input tax credit (ITC) discrepancies spanning several distinct financial years into one singular legal instrument.

The core of the legal challenge rested on the premise that the GST framework is inherently designed for year-wise assessment. By issuing a consolidated notice, the assessee argued that the proper officer exceeded their jurisdictional authority. To substantiate their stance, heavy reliance was placed on the landmark ruling by the Goa Bench of the Bombay High Court in Milroc Good Earth Developers v. Union of India [2026] 104 GSTL 45 (Bombay), which had previously quashed such composite notices as legally untenable.

Conversely, the revenue authorities vehemently defended their actions by citing contrary jurisprudence, specifically leaning on the Delhi High Court's judgments in Mathur Polymers v. Union of India [2025 SCC OnLine Del 6892] and Ambika Traders v. Commissioner [(2025) 148 GSTR 1]. The department highlighted that the Supreme Court of India had refused to interfere with these rulings, notably issuing a speaking order on November 7, 2025, thereby solidifying the revenue's position.

Detailed Submissions by the Assessee

The legal counsel representing the assessee advanced a multi-pronged argument to dismantle the validity of the consolidated notices, focusing on the structural integrity of the GST legislation:

1. The Sanctity of Year-Wise Limitation

The primary argument hinged on the limitation periods prescribed under Section 73(10) and Section 74(10) of the Central Goods And Services Tax Act, 2017. These sub-sections establish strict deadlines of three years and five years, respectively, for the passing of adjudication orders. Crucially, this limitation clock begins ticking from the due date of furnishing the annual return for a specific financial year. The assessee contended that clubbing multiple years into a single notice hopelessly tangles these distinct limitation periods, thereby defeating the legislative intent of treating each financial year as an independent assessment unit.