A recent court case where a taxpayer successfully challenged a consolidated show cause notice issued by the tax authorities under the Central Goods and Services Tax (CGST) Act, 2017.

The Issue:

The tax department issues a single show cause notice for multiple tax periods (assessment years). The petitioner, in this case, argued that such consolidation is illegal under Section 73 of the CGST Act.

The Argument:

The petitioner's primary contention was that Section 73 mandates specific actions to be completed within the relevant tax year. Additionally, a separate limitation period of three years applies to each assessment year. Therefore, clubbing multiple periods into one notice violates these provisions.

Legal Precedent:

The petitioner relied on a key judgment by the Madras High Court in the case of M/s. Titan Company Ltd. vs. Joint Commissioner of GST, which itself drew reference from the Supreme Court's decision in State of Jammu and Kashmir and Others vs. Caltex (India) Ltd. These precedents established the principle that assessments for different years should be treated independently and separate orders issued.

Court's Decision:

The court, after reviewing the arguments and legal precedents, ruled in favor of the petitioner. It acknowledged the specific time limits outlined in Section 73(10) and the need to comply with legal provisions for each assessment year. By issuing a consolidated notice, the tax authorities violated these principles.

GST Case Law Veremax Technologie Services Limited Versus The Assistant Commissioner of Central Tax

Citation-2024 TAXONATION 2426 (KARNATAKA)

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