Titan Company Limited vs Joint Commissioner of GST and Central Excise

In a recent landmark decision, the Madras High Court provided crucial clarification on the interpretation of Sec. 73 concerning the limitation period for assessing GST dues. This judgment holds significant importance in addressing the issue of “bunching of notices” and has implications for both taxpayers and revenue authorities.

The case in question centered around the Revenue Authority’s practice of issuing a cluster of Show Cause Notices to a taxpayer, covering GST dues for multiple assessment years. The taxpayer challenged this approach, contending that it contravened the three-year limitation period prescribed by Section 73 for each assessment year.

In its ruling, the Madras High Court sided with the taxpayer, declaring the issuance of bundled Show Cause Notices as invalid. The court emphasized the need for separate adjudication of each assessment year, in line with the provisions of Section 73.

This judgment underscores the importance of adhering to statutory limitations and procedural requirements in tax assessments. Taxpayers can rely on this precedent to challenge the aggregation of notices spanning multiple assessment years, ensuring fair and lawful treatment in the adjudication process.

Revenue authorities, on the other hand, are tasked with recalibrating their practices to align with the court’s directive. They must refrain from bundling notices and instead undertake individual assessments for each relevant year, maintaining compliance with Section 73 and upholding the principles of due process.

Given its significance, stakeholders are advised to take note of this case and its implications, as it sets a precedent for future disputes regarding the limitation period under GST law. By understanding and applying the principles established in this judgment, taxpayers and revenue authorities can navigate the complexities of GST assessments with clarity and adherence to legal requirements.

The petitioner has come up with the present Writ Petition seeking for issuance of a Writ of Mandamus directing the first respondent to consider and pass orders on the representation dated 25.10.2023 submitted by the petitioner before proceeding with the adjudication of show cause notice dated 28.09.2023.

2.Mr.N.L.Rajah, learned Senior Counsel appearing on behalf of the petitioner would submit that the first and foremost grievance of the petitioner is that the respondent had issued bunching of show cause notices dated 28.09.2023 for five Assessment Years starting from 2017-18 to 2021-22. According to the learned Senior Counsel, in terms of Section 73 of CGST Act, 2017 [hereinafter referred to as the ‘Act’], bunching of show cause notices is not permissible and it only provides for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or willful misstatement or suppression of facts.

3.Further, he would submit that sub-section 10 of Section 73 provides that an order determining the tax from a person should be passed within three years from the due date for furnishing of annual return for the financial year to which the tax due relates to and therefore, he would submit that determination of tax due under Section 73 is with reference to a financial year and the limitation date to complete the proceedings and issue an order is three years from the due date to file annual return for that particular financial year.

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