Composite SCN for multiple years under sec. 74 held invalid as each tax period requires separate notice {Shivhare Retail (P.) Ltd. vs. Commissioner, CGST & Central Excise, Nagpur [2026] 185 taxmann.com 503 (Bombay)}
Facts
- GST department issued a single Show Cause Notice under Section 74 (fraud/suppression cases).
- This SCN covered multiple financial years/tax periods together instead of issuing separate notices.
- Based on this SCN, demand proceedings were initiated for all those years collectively.
- The taxpayer challenged the SCN before the High Court, arguing that:
- GST law treats each tax period separately, and
- A combined SCN violates procedural requirements and natural justice.
Issue
- Whether a composite SCN under Section 74 covering multiple tax periods is legally valid, or
- Whether the law requires separate SCNs and adjudication for each tax period.
Held
- The Bombay High Court quashed the SCN.
- Key observations:
- Under GST, each tax period (month/year) is a distinct and independent unit for assessment and demand.
- Section 74 proceedings must be period-specific, including:
- Allegations
- Computation of tax
- Opportunity of reply
- A single SCN for multiple years creates ambiguity and:
- Makes it difficult for the taxpayer to respond properly,
- Clubs different causes of action, which is procedurally incorrect.
- Therefore, separate SCNs are mandatory for each tax period.
