{"id":390023,"date":"2026-07-10T15:00:59","date_gmt":"2026-07-10T09:30:59","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=390023"},"modified":"2026-07-10T14:52:54","modified_gmt":"2026-07-10T09:22:54","slug":"calcutta-hc-clarifies-jurisdiction-under-section-74-of-cgst-act-2017","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2026\/07\/10\/calcutta-hc-clarifies-jurisdiction-under-section-74-of-cgst-act-2017\/","title":{"rendered":"Multiple Tax Years Cannot be Clubbed in One GST Show-Cause Notice: Calcutta HC Quashes \u20b910.97 Crore GST Notice Against SBI Covering Six Financial Years"},"content":{"rendered":"
\n

Calcutta High Court:<\/span> The Single Judge Bench of Aniruddha Roy, J. allowed the writ petition and set aside the composite show-cause notice with a penalty of ₹10.97 crores issued by the respondent-GST Authorities. The Court held that the show-cause notice was impermissible and beyond jurisdiction under Section 74<\/a>, Central Goods and Services Tax Act, 2017<\/a> (CGST Act). The Court emphasised that taxing statutes must be strictly construed, and limitation cannot be extended beyond statutory prescription.<\/p>\n

Background<\/p>\n

The case arose when the respondent-GST Authorities through its letter dated 4 June 2025 to the petition requested for certain documents. This correspondence was followed by an email dated 10 June 2025 attaching the said communication dated 4 June 2025 requesting the petitioner-SBI to submit documents for the Financial Years 2018-2019 to 2023-2024, to the writ petition.<\/p>\n

The petitioner-SBI provided all the documents by an email dated 12 June 2025 for the periods 2018-2019 to 2023-2024 along with 56 inter branch invoices. On 11 June 2025 the respondent-GST Authorities issued an audit observation for the period during April 2018 to March 2019. On 19 June 2025 an audit report for the period of April 2018 to March 2024 was issued by the respondent-GST authorities.<\/p>\n

The respondent-GST Authorities passed its impugned order dated 12 December 2025, issuing a composite show-cause notice on the grounds that the petitioner-SBI did not respond to the queries raised by the respondent-GST Authorities at the pre-show-cause stage or even at the post show-cause stage.<\/p>\n

The petitioner-SBI contended that the impugned order was issued without considering the documents and invoices already provided. However, the petitioner-SBI submitted a detailed reply to the said impugned order where all the invoices and every explanations and calculation were provided for consideration by the respondent-GST Authorities but without considering of the same and without applying its mind, the respondent-GST Authorities passed its impugned order.<\/p>\n

The petitioner-SBI argued that the notice and subsequent order ignored vital documentary evidence, violated principles of natural justice, and imposed disproportionate penalties amounting to ₹10,97,13,550. The petitioner-SBI primarily challenged the action of the respondent-GST authorities on the following grounds:<\/p>\n

1. the impugned show-cause notice culminating in the impugned order was without jurisdiction;<\/p>\n

2. the impugned single show-cause notice clubbing multiple financial years is not only illegal and dehors the statute but also without jurisdiction;<\/p>\n

3. the impugned order was passed ignoring vital documentary evidence resulting in violation of principle of natural justice; and<\/p>\n

4. the invocation of power under Section 74<\/a>, CGST Act<\/a> is motivated, illegal, arbitrary and without jurisdiction.<\/p>\n

The petitioner-SBI relaying on the case SEBI<\/span> v. Sunil Krishna Khaitan<\/span>, (2023) 2 SCC 643<\/a> submits that even if the power of the authority is discretionary for awarding penalty but the same has to be exercised in a reasonable and bona fide manner based on established para meters of due process of law and it is the legitimate expectation of the assessee that the discretion should be used by the respondent-GST Authorities not in an arbitrary and discriminatory manner.<\/p>\n

The respondent-GST Authorities relying on the case of Mathur Polymers<\/span> v. Union of India<\/span>, 2025 SCC OnLine Del 6892<\/a> submits that in the event of fraudulent availment of benefit under the said 2017 Act, where transactions are spread across several years, a consolidated show-cause notice is permitted in law.<\/p>\n

The Revenue Authorities had taken the point of maintainability of the writ petition in view of the existences of the statutory appellate remedy under Section 107<\/a>, CGST Act<\/a>. He submits that to adjudicate upon the point of limitation, if any, in respect of any financial year and to assess the impugned order, it requires a fact-finding enquiry to be conducted to a great extent. Limitation is a mixed question of law and fact. Writ court is not the forum to conduct a detail fact-finding enquiry. The statutory appellate remedy is vested with the power to go into the facts. Hence, appellate remedy is the appropriate remedy for the writ petitioner-SBI.<\/p>\n

The petitioner-SBI submits that the revenue authority while issuing the said impugned show-cause notice by clubbing the financial years had acted without jurisdiction. The petitioner-SBI relied upon a decision of the Supreme Court in the matter of Godrej Sara Lee Ltd.<\/span> v. Excise and Taxation Officer-cum-Assessing Authority<\/span>, 2023 SCC OnLine SC 95<\/a> contended that the existence of statutory appellate remedy is not an absolute bar in entertaining a writ petition.<\/p>\n

Issue<\/p>\n

Whether for multiple financial years a single show-cause notice is permitted to be issued.<\/p>\n

Analysis and decision<\/p>\n

The Court considering the contentions made by the parties observed that the ratio decided in the judgment of Sampa Das<\/span> v. Union of India<\/span>, WPA No. 4367 of 2023, did not apply on the facts and circumstances of this case, as it was not a case where the limitation would have intervened if separate notices were issued for different periods. Such was not the case in the instant writ petition.<\/p>\n

The Court held that the impugned show-cause notice dated 25 June 2025 was de-hors and in violation of the provision laid down under Section 74<\/a>, CGST Act<\/a> and thus, the impugned order-in-original dated 12 December 2025 was also held to be illegal, without jurisdiction and not tenable in law. The Court further held that each financial year is a separate unit for tax determination under Section 74<\/a>, CGST Act<\/a> and limitation periods apply independently.<\/p>\n

The Court further noted that for three of the financial years covered by the composite notice i.e. 2018-19, 2019-20 and 2020-21, the limitation period for issuance of a show-cause notice had already expired by the time the impugned notice was issued on 25 June 2025. The demand attributable to these three years amounted to ₹2,76,84,879, making the inclusion of these years in the composite notice not merely irregular but wholly time-barred.<\/p>\n

The Court highlighted that the law is the self-imposed restriction of the Constitutional Court in exercising its power under Article 226<\/a> of the Constitution of India<\/a> when an alternative and efficacious remedy exists under the statute. However, if the Constitutional Court finds on the face of record that an act committed by an Article 12 authority on the face of it is de hors and in violation of the statutory provisions and is without jurisdiction or in excess of jurisdiction, such self-imposed restriction is not an absolute bar before a writ court.<\/p>\n

The Court observed on a close scrutiny of an act of an authority, on record, that the jurisdictional error was so apparent and ex facie for which no further fact or evidence was required to be enquired or looked into, existence of an alternative remedy is not a bar. The plenary power of the Constitutional Court in exercise of its plenary jurisdiction under Article 226<\/a> of the Constitution of India<\/a> has the authority and jurisdiction to correct such a jurisdictional error. If a Constitutional Court finds that without going into any factual dispute or any triable issue, the jurisdictional error can be corrected or is required to quashed, it would always be open for judicial scrutiny. The Court had a firm and considered view and held that the instant writ petition is maintainable.<\/p>\n

The Court after considering the evidence on record, allowed the petition and set aside the impugned show-cause notice dated 25 June 2025. The Court further made it clear that the respondent Revenue Authorities shall be at liberty to proceed afresh but strictly in accordance with law.<\/p>\n

[SBI<\/span> v. Union of India<\/span>, WPA 433 of 2026, decided on 30-6-2026<\/span>]<\/p>\n

*Judgment authored by: Justice Aniruddha Roy<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Petitioner:<\/span> Sakya Sen, Sr. Adv., Siddharth Dey, Trisha Mukerjee, Siddhartha Datta, Payel Chanda, Advocates<\/p>\n

For the Respondent:<\/span> Dilip Kumar Agarwal, Bishwa Raj Agarwal, Satyajit Paul, Advocates<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Court held that under Section 74, CGST Act, each financial year is a separate unit for tax determination, and limitation periods apply independently. It found that the respondent-GST Authorities acted illegally by issuing a consolidated notice and ignoring documentary evidence provided by State Bank of India (SBI). Consequently, the impugned show-cause notice and order were declared void and without jurisdiction.<\/p>\n","protected":false},"author":67544,"featured_media":390029,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,10],"tags":[109531,42285,35875,2513,109527,109520,109516,109530,109519,109524,109526,63443,109523,109518,109522,109528,109529,109515,109532,109517,109525,109521],"class_list":["post-390023","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-allowed-the-writ-petition","tag-article-12","tag-article-226-of-the-constitution","tag-Calcutta_High_Court","tag-clubbing-multiple-financial-years","tag-consolidated-notice-and-ignoring-documentary-evidence-provided-by-sbi","tag-each-financial-year-is-a-separate-unit","tag-fact-finding-enquiry","tag-gst-authorities-acted-illegally","tag-ignored-vital-documentary-evidence","tag-imposed-disproportionate-penalties","tag-justice-aniruddha-roy","tag-limitation-cannot-be-extended","tag-limitation-periods-apply-independently","tag-penalty-of-10-97-crore","tag-point-of-maintainability","tag-section-107-cgst-act","tag-section-74-of-central-goods-and-services-tax-act-2017","tag-set-aside-the-composite-show-cause-notice","tag-tax-determination","tag-violated-principles-of-natural-justice","tag-void-and-without-jurisdiction"],"yoast_head":"\nClubbing multiple financial years in a single show-cause notice is beyond jurisdiction: Calcutta HC clarifies Section 74 of CGST Act, 2017 | SCC Times<\/title>\n<meta name=\"description\" content=\"The Calcutta High Court held that each financial year is a separate unit for tax determination under Section 74, CGST Act and limitation periods apply independently. 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