Invalidity of Multi-Year GST Show Cause Notices: Bombay High Court Mandates Year-Wise Issuance Under Section 74

In a landmark judicial pronouncement that significantly impacts the procedural dynamics of Goods and Services Tax (GST) assessments, the Bombay High Court has explicitly invalidated the practice of issuing consolidated, multi-year demand notices. The ruling delivered in the matter of Shivhare Retail Pvt. Ltd. Vs Commissioner, CGST & Central Excise serves as a crucial safeguard for the assessee, reinforcing the statutory requirement that tax assessments and corresponding limitation periods must be calculated and executed on a strict, year-by-year basis.

This comprehensive analysis delves into the factual matrix, the competing legal arguments, the interpretation of statutory timelines, and the broader implications of this binding precedent on future tax administration and compliance strategies.

Factual Matrix of the Dispute

The controversy erupted when the jurisdictional GST authorities issued a comprehensive show cause notice to the assessee on 18/06/2025. This particular communication, formulated under the provisions of Section 74 of the CGST Act, 2017, was far-reaching in its scope. It sought to amalgamate multiple consecutive fiscal cycles—specifically covering the period from FY 2018-19 to 2022-23.

The core allegations leveled against the assessee involved the purported suppression of taxable values, which allegedly culminated in a significant short payment of Central Goods and Services Tax over the aggregated five-year timeframe. Aggrieved by this consolidated approach, the assessee approached the Bombay High Court, challenging the fundamental jurisdictional validity of the notice. The primary contention was that the underlying statutory architecture of the GST regime strictly prohibits the clubbing of distinct financial years into a solitary demand instrument.

Counsel representing the assessee mounted a robust defense anchored in the structural integrity of the GST law. The central argument posited that an adjudicating authority inherently lacks the jurisdiction to conduct a composite assessment that blends various distinct tax periods or assessment years.

To substantiate this position, the assessee heavily relied upon a pivotal ruling by the Goa bench of the Bombay High Court in M/s. Milroc Good Earth Developers Vs. Union of India & Ors. [Writ Petition No. 2203/2025 decided on 9/10/2025]. In that specific instance, the judiciary had unequivocally determined that responding to a procedurally defective, consolidated show cause notice should not be encouraged if the authority lacked the foundational jurisdiction to issue it in such a format.