M/S Gias Uddin Ahmed And Anr vs. The Union Of INDIA And Ors

Held

The Court held that there is no bar to issuing a consolidated Show Cause Notice for different financial years under Section 73(1) or Section 74(1) of the Act of 2017, nor is there a bar to passing a consolidated order under Section 73(9) or Section 74(9). This was based on the precedent set in M/s Tata Projects Limited Vs. Union of India. Regarding the dispute between Section 73 and Section 74, the Court opined that this requires factual adjudication, which cannot be decided in writ proceedings under Article 226. The Court noted that the distinction between Section 73 (non-willful tax evasion) and Section 74 (willful tax evasion due to fraud, willful misstatement, or suppression of facts) depends on factual findings. The Court directed the petitioners to submit their reply to the Demand-cum-Show Cause Notice within 30 days, allowing them to raise all contentions except the one regarding the permissibility of a consolidated notice. The period from April 18, 2024, to the date of the judgment was excluded for computing the limitation period for adjudication.

Facts

The petitioners, M/s Gias Uddin Ahmed and another, filed a writ petition challenging a Demand-cum-Show Cause Notice dated April 17, 2024, issued by the Deputy Director, DGGI, Guwahati Zonal Unit. The petitioners contended that the notice consolidated demands for four years and that their case should fall under Section 73 of the CGST Act, 2017, not Section 74, making the notice barred by limitation. The petition was filed on May 9, 2025, nearly a year after the notice was issued. An interim order prevented coercive action against the petitioners.

Key Issues

1. Whether the issuance of a consolidated Demand-cum-Show Cause Notice for multiple financial years is permissible under the Central Goods and Services Tax Act, 2017? 2. Whether the present writ petition is maintainable for adjudicating whether proceedings should be initiated under Section 73 or Section 74 of the CGST Act, 2017, given the factual nature of the dispute? The petitioners argued that the consolidated notice was impermissible and that their case clearly fell under Section 73, making the notice time-barred. They relied on the principle that proceedings under Section 74 require specific grounds like fraud or willful misstatement, which were not evident. The respondents contended, implicitly, that the notice was valid and that the petitioners should have responded to it. They relied on the Gauhati High Court's decision in M/s Tata Projects Limited Vs. Union of India.