Balaram Halder vs. Union Of INDIA And Ors.

Facts

The petitioner, Balaram Halder, challenged a Show Cause cum Demand Notice dated August 18, 2026, issued by Respondent No. 3, demanding Rs. 55,29,508/- under the CGST Act, 2017. The notice clubbed Financial Years 2021-22 to 2025-26. The petitioner argued that clubbing multiple assessment years in a single notice is illegal, without jurisdiction, and barred by limitation under Section 74 of the CGST Act. The petitioner also noted that two periods, 2020-21 and 2022-23, were already under adjudication by an appellate authority. The respondents contended that the writ petition was not maintainable due to an alternative remedy of appeal under Section 107 of the CGST Act, and that the issue of clubbing assessment years and limitation had been settled by the Supreme Court in M/s Mathur Polymers vs. Union of India.

Held

The Court held that the issues of limitation, jurisdiction, and the permissibility of clubbing different Financial Years involved disputed questions of facts and law. These complex issues, the Court opined, could be more effectively adjudicated by the Appellate Authority under Section 107 of the CGST Act, 2017. Consequently, the Court did not delve into the merits of the case. The petitioner was directed to file a comprehensive reply to the Show Cause cum Demand Notice within five weeks, which the respondent No. 3 was to consider and dispose of within four weeks of receipt, passing a reasoned and speaking order after affording a personal hearing. The respondent No. 3 was also directed not to give effect to the demand raised in the Show Cause Notice until the decision attains finality. The Court explicitly stated that the respondent No. 3 should take an independent decision without being influenced by the observations made in the present order. The writ petition was disposed of with these directions.

Key Issues

1. Whether a single Show Cause Notice issued under Section 74 of the CGST Act, 2017, is legally valid when it clubbs multiple financial years, thereby potentially violating principles of limitation and jurisdiction? 2. Whether the writ petition is maintainable before this Court, or if the petitioner has an efficacious alternative remedy before the appellate authority under Section 107 of the CGST Act, 2017? Petitioner's contentions: The petitioner argued that clubbing multiple assessment years in a single Show Cause Notice is ex facie bad, illegal, without jurisdiction, and barred by limitation under Section 74 of the CGST Act, 2017. They relied on the Bombay High Court judgment in Mirloc Good Earth Developers vs. Union of India and the Calcutta High Court judgment in State Bank of India vs. Commercial CGST & CE, SLG Commissionerate, which suggested such issues might require reference to a Larger Bench or could lead to quashing of the notice and consequential order on jurisdictional grounds. Respondents' contentions: The respondents argued that the writ petition is not maintainable due to the availability of an efficacious alternative statutory remedy of appeal under Section 107 of the CGST Act, 2017. They contended that issues of clubbing of assessment years and limitation can be agitated before the Appellate Authority. They relied on the Supreme Court's dismissal of the Special Leave Petition in M/s Mathur Polymers vs. Union of India, affirming a Delhi High Court judgment that upheld consolidated notices, and a coordinate bench's decision in UBS Exports International Pvt. Ltd. dismissing a writ petition on grounds of alternative remedy.