Consolidation of multiple financial years in a single show cause notice is permissible under CGST Act.

The Petitioner, a company engaged in CCTV surveillance installation, was audited for FY 2017-18 to FY 2021-22

Following an Observation Memo and an Audit Report, a Show Cause Notice (SCN) was issued on 09.04.2024, proposing a GST demand of approximately ₹18.67 crore for alleged wrongful availment of a concessional tax rate (12% instead of 18/28%) and an additional ₹1.30 crore for non-payment of GST at 28%, alongside penalties

The Adjudicating Authority passed an Order-in-Original (OIO) on 31.01.2025, confirming the entire demand and 200% penalty

The Petitioner challenged the OIO via a writ petition, primarily contending that the Revenue impermissibly consolidated multiple financial years into a single SCN and OIO, thereby collapsing distinct causes of action and limitation periods

1. Whether the consolidation of multiple financial years into a single Show Cause Notice and Order-in-Original is legally permissible under Sections 73 and 74 of the CGST Act

2. Whether the writ petition is maintainable when an alternative statutory remedy under Section 107 of the CGST Act is available

The court primarily interpreted Sections 73 and 74 of the CGST Act, 2017, specifically sub-sections (3) and (4), which utilize the expressions "for any period" and "for such periods," indicating that a notice can encompass more than one financial year

It followed the precedent set in Ambika Traders v. Additional Commissioner (2025 SCC OnLine Del 6913), which affirmed the validity of consolidated notices

Regarding alternative remedies, the court relied on the principles established in Whirlpool Corporation v. Registrar of Trademarks and Harbanslal Sahnia v. Indian Oil Corpn. Ltd.

Furthermore, per Union Territory of Ladakh v. Jammu & Kashmir National Conference, the court held it is bound by its own coordinate bench precedents despite conflicting views from other High Courts or pendency of similar issues in the Supreme Court

The Petitioner attempted to distinguish Ambika Traders by arguing it applied only to fraudulent Input Tax Credit (ITC) cases, whereas the present matter was a classification and tax rate dispute

The Court rejected this, observing that the statutory language "for any period" in both Sections 73 (non-fraud) and 74 (fraud) of the CGST Act does not restrict consolidation to specific types of violations

The Court noted that while the Bombay High Court had taken a contrary view in cases like Milroc Good Earth Developers, the Delhi High Court remains bound by its own precedent in Ambika Traders under the principle of stare decisis

Finally, the Court declined to adjudicate the merits of the tax demand (classification of CCTV installation), holding that such factual and legal determinations must be addressed through the statutory appellate process under Section 107, as writ jurisdiction is not a substitute for an efficacious alternative remedy

The Court refrained from expressing any opinion on the merits of the tax liability and granted the Petitioner liberty to exhaust the alternative statutory remedy by filing an appeal before the relevant authority