Issue No. August/2025/01

The petitioner argued that ITC was legitimately claimed on the strength of tax invoices, reflected in GSTR-2A, and that non-compliance by the supplier could not be a ground to deny ITC, amounting to shifting the supplier’s liability onto the recipient and causing double taxation. The Department contended that ITC entitlement under Section 16(2)(c) required actual tax payment by the supplier and, as the petitioner had a statutory appellate remedy under Section 107 of the GST Act, the writ petition was not maintainable, particularly since it was filed beyond the appeal period without explanation.

The Hon’ble High Court held that the petition involved disputed questions of fact concerning compliance with Section 16(2)(c), which were within the domain of the appellate authority under Section 107. Referring to earlier decisions, it reiterated that writ jurisdiction under Articles 226 and 227 is to be exercised only in exceptional circumstances such as breach of fundamental rights, violation of natural justice, excess of jurisdiction, or challenge to vires and that mere availability of an alternate remedy bars interference in such tax disputes. As the petitioner had bypassed the appeal route and filed the writ belatedly without showing sufficient cause, the Hon’ble High Court declined to entertain the matter and dismissed the petition, granting liberty to pursue the statutory remedy. The Court clarified that its observations were confined to the writ’s maintainability and should not influence the merits before the appellate forum.

R.A. & Co. v. Additional Commissioner of Central Taxes, South Commissionerate, Chennai, (2025) 33 Centax 66 (Madras), W.P. No. 17239 of 2025

The Petitioner challenged the issuance of a single Show Cause Notice (SCN) and assessment order by the GST department covering six financial years (2017–18 to 2022–23). It was contended that under Sections 73 and 74 of the GST Act, each financial year is treated as a separate “tax period” with its own limitation period, three years for non-fraud cases and five years for fraud cases and that “bunching” of multiple years in one SCN is contrary to law.

The petitioner argued that such clubbing caused hardships, including the inability to apply for compounding for a specific year, difficulty in availing amnesty schemes for selected years, and prejudice in contesting demands for particular years. The department maintained that “any period” in the Act permitted notices for multiple years. However, the Court, after analysing the definitions of “tax period” [Section 2(106)] and “return” [Section 2(97)], and relevant provisions of Sections 73 and 74, held that SCNs can only be based on monthly or annual returns, and cannot extend beyond one financial year.

The Hon’ble Court relied on earlier judgments, including Titan Company Ltd. (Madras HC) and Tharayil Medicals (Kerala HC), which affirmed that separate SCNs must be issued for each financial year to preserve the assessee’s right to present year-specific defences. It observed that the limitation period for each year cannot be “carried over” to justify clubbing and that composite SCNs covering multiple years constitute jurisdictional overreach. The Court emphasised that if an SCN is issued after the filing of annual returns, it must relate to that financial year alone; if issued earlier, it may be based on monthly returns. Holding that the impugned order was passed without jurisdiction by covering more than one financial year, the Court quashed it, reiterating that no SCN or assessment order can be issued for more than one financial year and that proceedings must be initiated and completed separately for each year within the prescribed limitation period.