M/S Chimney Hills Education Society vs. Additional Commissioner Of Central Tax

Heard learned Senior counsel for the petitioner and learned counsel for the respondents – revenue and perused the material on record.

A perusal of the material on record will indicate that though several contentions are urged by both sides in support of their respective claims, the main / primary issue that arises for consideration is, whether the impugned Notices at Annexures-A and B both dated 05.08.2024 are vitiated on account of the fact that the same purport to club / consolidate / group the demand for more than one financial year i.e., for the tax period from 2017 to NC: 2024:KHC:40718 2023 and as to whether the impugned Notices deserve to be quashed on this ground. The said issue came up for consideration in the case of M/s. Bangalore Golf Club vs. Assistant Commissioner of Commercial Taxes – W.P.No.16500/2024 dated 07.08.2024, in which, the co-ordinate Bench of this Court held as under:-

The petitioner’s primary argument is that the respondent cannot issue a common show cause notice by grouping the tax periods from 2019 to 2023-24. The petitioner asserts that under Section 73 of the CGST Act, a specific action must be completed within the relevant year, and the limitation period of three years applies separately to each assessment year. Consequently, the petitioner contends that clubbing multiple tax periods in a single notice is impermissible, and separate notices should have been NC: 2024:KHC:40718 issued for each assessment year under sub-Section (1) of Section 73. 3. The petitioner relies on the judgment of the Hon'ble Madras High Court in the case of M/s. Titan on the Hon’ble Supreme Court's decision in State of Jammu Hon’ble Apex Court held that where an assessment encompasses different assessment years, each assessment order can be distinctly separated and must be treated independently.

This Court has reviewed the judgment of the Madras High Court and the scope of inquiry under Section 73 of the CGST Act. Based on the established legal principles and the precedent set by the Hon’ble Apex Court, this Court finds that the respondent erred in issuing a consolidated show cause notice for multiple assessment years, spanning from 2019 to 2023-24. 5. Section 73(10) of the CGST Act mandates a specific time limit from the due date for furnishing the annual return for the financial year to which the tax due relates. The law stipulates that particular actions must be completed within a designated year, and such actions should be executed in accordance with the law's provisions. The 1 W.P.No.33164 of 2023 2 AIR 1966 SC 1350 NC: 2024:KHC:40718 principles enunciated in the judgment cited by the Hon’ble Supreme Court are directly applicable to the present case.

For the reasons aforementioned, this Court concludes that the show cause notices issued by the respondent are fundamentally flawed. The practice of issuing a single, consolidated show cause notice for multiple assessment years contravenes the provisions of the CGST Act and established legal precedents.

Accordingly, this Court proceeds to pass the following: ORDER

As is clear from the aforesaid judgment of this Court, the issue in controversy involved in the present petition is directly and squarely covered by the aforesaid judgment and consequently, the impugned Notices deserve to be quashed by reserving liberty in NC: 2024:KHC:40718 favour of the respondents to issue separate / independent Notices for each assessment year in terms of *Section 74 of the CGST Act, 2017. 5. In the result, I pass the following: ORDER