GST Update

Desk of CA Praveen Sharma – 923 Series (CAPS)

Bombay High Court in the case of Paras Stone Industries, through proprietor Sunil Shatrughan Mishra

The Bombay High Court examined a writ petition challenging a show cause notice issued under Section 74 of the CGST Act for multiple financial years, namely 2017–18 to 2019–20, through a single consolidated notice.

The GST department had alleged suppression of taxable turnover and short payment of tax by clubbing three different assessment years into one proceeding. The petitioner contended that issuing one notice for multiple financial years is beyond the authority’s jurisdiction and contrary to the GST framework, which requires year-wise proceedings.

The Court noted that recent decisions of the Bombay High Court have consistently held that GST demands must be raised separately for each financial year. The department’s reliance on a Delhi High Court ruling permitting consolidated notices was rejected, as authorities are bound by the law laid down by their own jurisdictional High Court, particularly when such rulings are later in time.

The Court also dismissed the objection regarding availability of an alternative remedy, holding that jurisdictional errors fall within well-recognised exceptions to writ jurisdiction. Accordingly, the impugned show cause notice was quashed. However, liberty was granted to the department to issue fresh notices strictly in accordance with law.

The Court also cautioned departmental counsel on maintaining proper court decorum. Although costs were initially imposed, they were later recalled to allow corrective conduct.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS