M/S. Riocare INDIA Private Limited vs. Assistant Commissioner CGST And C. Ex. Circle Ii And Ors

Facts

M/s. RioCare India Private Limited (Petitioner) filed a Writ Petition before the Bombay High Court challenging a show cause-cum-demand notice dated December 4, 2024, issued by the Assistant Commissioner CGST and C.Ex. (Respondent) under Section 74 of the Central Goods and Services Tax Act, 2017. The notice pertains to the period from July 1, 2018, to March 31, 2023. The Petitioner sought to quash the notice and restrain the Respondent from taking further steps. The core of the Petitioner's challenge was that a single show cause notice covering multiple financial years was impermissible, and separate notices should have been issued for each financial year.

Held

The Court, at least prima facie, was not impressed with the Petitioner's argument that a single show cause notice for multiple financial years was impermissible. The Court found nothing in Section 74, particularly Section 74(1), that prohibits the authority from issuing a notice for a period to recover tax that has not been paid, short paid, erroneously refunded, or where input tax credit has been wrongly availed or utilized due to fraud, wilful misstatement, or suppression of facts to evade tax. The Court noted that a notice under Section 74(1) can be issued for any period, provided it is issued at least six months prior to the time limit specified in Section 74(10) for issuing an order. Since there was admittedly no issue of limitation under Section 74(10), the Court was not satisfied that the Writ Petition challenging the show cause notice ought to be entertained. The Petitioner was directed to face the show cause notice and canvass all arguments, including those raised in the Writ Petition, before the concerned authority.

Key Issues

1. Whether a single show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017, can cover multiple financial years, or if separate notices are required for each financial year? (Question of law) Petitioner's Contention: The Petitioner argued that a single show cause notice for the period July 1, 2018, to March 31, 2023, was impermissible, and separate show cause notices ought to have been issued for each financial year within this period. Respondents' Contention: The Respondents did not explicitly record arguments in the judgment. However, the Court's prima facie view suggests that the Respondents would likely contend that Section 74 does not prohibit issuing a consolidated notice for a period, provided it is within the statutory time limits.