The High Court of Karnataka at Bengaluru, in the case of Emmanuel Constructions Pvt. Ltd. v. Principal Secretary to the Government, Finance Department, Writ Petition No. 5827 of 2025, decided on 23.10.2025, held that a composite show cause notice covering multiple assessment periods and separate adjudication orders passed by different officers on the basis of the same notice are impermissible in law under Section 73 of the Central Goods and Services Tax (hereinafter referred to as “CGST”) Act, 2017.
The Court set aside the impugned show cause notice and the two adjudication orders, and directed the authorities to issue fresh notices, if required, separately for each assessment year, strictly in accordance with the CGST Act and the Karnataka Goods and Services Tax Act, 2017. The Court further directed that the period between the date of the original show cause notice and the date of the judgment shall stand excluded for the purpose of limitation under Section 73(10) of CGST Act, 2017.
FACTS
Emmanuel Constructions Private Limited (hereinafter referred to as “the Petitioner”) is a company engaged in construction-related business and registered under the GST regime. The GST authorities issued a Show Cause Notice (hereinafter referred to as “SCN”) in Form GST DRC-01 dated 23.11.2023, demanding tax for alleged discrepancies relating to two separate assessment periods being 2019-20 and 2020-21. Pursuant to this notice, two separate adjudication orders dated 31.08.2024 & 19.07.2024 were passed by two difference officers although the SCN was issued by a single officer.
The Principal Secretary to the Government, Finance Department (hereinafter referred to as “the Respondent”) is the authority responsible for issuance of notices and adjudication proceedings under the CGST Act and Karnataka Goods and Services Tax Act, 2017. The Petitioner contended that issuing a SCN covering multiple assessment periods, and subsequently passing independent orders by different officers, is impermissible under Section 73 of the CGST Act.
Thus, aggrieved by the issuance of the notice and the consequent orders, the Petitioner filed the Writ Petition before the Hon’ble High Court of Karnataka, seeking to quash the notice and adjudication orders.
ISSUES
- Whether the issuance of a composite SCN covering multiple assessment periods, followed by separate adjudication orders passed by different officers on the basis of the same notice, is legally valid under Section 73 of the CGST Act, and if not, whether such notice and corresponding adjudication orders are liable to be quashed?
CONTENTIONS OF THE PARTIES
The Petitioner contended that issuance of a SCN covering multiple assessment periods is not permissible under Section 73 of the CGST Act, which mandates period-wise assessment and independent adjudication. It was submitted that clubbing two different tax periods into a single SCN vitiates the proceedings as the law requires separate notices and separate determination of tax liability for each period, and thus the impugned notice is fundamentally defective.
The Petitioner further contended that although the SCN was issued by one officer, the adjudication orders were passed by two different officers. Such a process is procedurally invalid since an officer who did not issue the notice has no authority to adjudicate the same, and any order passed in such circumstances is rendered unlawful under the eyes of law.
The Petitioner also contended that the impugned orders rely upon the explanation to Rules 42(1)(f) and 42(3) of the CGST Rules, 2017 that were inserted with effect from 01.04.2019 and the same not being prospective in nature, could not have been relied upon by the respondents for the purpose of passing the impugned adjudication order which deserves to be quashed.
The Respondent, on the contrary, contended that, they did not oppose the quashing of the impugned SCN and adjudication orders, and submitted that the Court may set aside the same while granting liberty to the authorities to issue a fresh SCN in accordance with law.
The Respondent further contended that in the event a fresh SCN is permitted to be issued, the period between the issuance of the original SCN dated 23.11.2023 and the date of the Court’s order must be excluded from the computation of limitation in terms of Section 73(10) of the CGST Act, ensuring that the authority is not prejudiced on account of the litigation timeline.
It was further submitted that, if liberty is granted to issue a fresh notice, the Petitioner will have full opportunity to present documents, explanations, and defenses during the fresh proceedings and contest the matter on all legally available grounds except limitation, which the Respondent prayed should not be reopened once exclusion of limitation is granted by the Court.
FINDINGS AND DECISION
The Hon’ble High Court of Karnataka held that the issuance of SCN was impermissible under Section 73 of the CGST Act. The Court observed that a single SCN cannot validly initiate proceedings for multiple tax periods and that such procedural defects vitiate the entire adjudication process.
The Court further found that although the impugned SCN was issued by one officer, the final adjudication orders were separately issued by two different officers, which was contrary to the principles of natural justice and statutory procedure under GST laws. It was also noted that the amendment introducing the explanation to Rules 42(1)(f) and 42(3) of the CGST Rules, 2017, applicable from 01.04.2019, could not be applied retrospectively for earlier years, and therefore reliance on the same rendered the adjudication orders unsustainable in law.
In view of the above findings, the Court quashed the impugned adjudication orders dated 31.08.2024 and 19.07.2024, as well as the SCN dated 23.11.2023. The Court also granted liberty to the Respondent authorities to issue fresh SCN separately and proceed strictly in accordance with law, while directing that the period between 23.11.2023 and the date of judgment shall be excluded for the purpose of computing limitation under Section 73(10) of the Karnataka Goods and Services Tax Act, 2017.
The Court further directed that in the event fresh notices are issued, the Petitioner shall be entitled to submit replies and contest the proceedings on all grounds except limitation, and that the authorities must thereafter adjudicate on merits. Accordingly, the writ petition was allowed in favour of the Petitioner, with no order as to costs.
AMLEGALS REMARKS
This judgment is a reminder for GST authorities for the importance of procedural fairness and statutory discipline. When notices and orders are prepared without following the structure laid down in the law, they do not just create confusion but they become vulnerable to being struck down entirely. A SCN for multiple periods may look convenient from an administrative standpoint, but it can seriously prejudice the taxpayer’s right to defend themselves. This decision is a welcome clarification that strengthens transparency and accountability in GST proceedings.
For any query, feel free to reach out to hiteashi.desai@amlegals.com