GST Update

Desk of CA. Praveen Sharma – 1040 Series (CAPS)

Case: State Bank of India v. Commercial Central Goods and Service Tax & Central Excise, SLG Commissionerate

Calcutta High Court | Clubbing Multiple Financial Years in One SCN Not Permissible

Calcutta High Court: GST Show Cause Notice Cannot Club Multiple Financial Years

In a significant relief for taxpayers, the Calcutta High Court has held that the GST Department cannot issue a single Show Cause Notice (SCN) covering multiple financial years under Section 74 of the CGST Act.

The case, State Bank of India v. Commercial Central Goods and Service Tax & Central Excise, SLG Commissionerate, involved an SCN that combined several financial years into one proceeding. The Court observed that under the GST law, each financial year is an independent tax period and must be assessed separately.

The High Court further clarified that the limitation period must be calculated for each financial year individually. Clubbing different financial years into one notice could dilute the statutory limitation provisions, which is not permitted under the law.

Accordingly, the Court quashed the composite SCN, holding that it was contrary to the scheme of the GST Act. The judgment reinforces the principle that limitation provisions should be interpreted strictly and cannot be bypassed through procedural shortcuts.

This ruling is an important safeguard for taxpayers, ensuring that GST authorities issue financial year-specific notices and follow the limitation requirements prescribed under the Act.

Key Takeaway: Under GST, every financial year is a separate assessment period. A single Show Cause Notice covering multiple financial years is not legally sustainable.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS