Issuing 4 Years consolidated notice is impermissible: Bombay HC Stays Rs. 71.23 Crore GST Demand [Read Order]

The Bombay High Court has stayed Rs. 71.23 Crore Goods and Service Tax (GST) demand  holding that issuing  4 years consolidated notice.

Respondent No. 3 served the petitioner/assessee, Grainotch Industries Ltd., with a consolidated notice regarding the payment of GST for the years 2017–2021.  The notification was explained by the petitioner after show-cause.  The contested ruling, which held the respondents accountable for paying Rs. 71,23,02,689 along with an equivalent amount of fine, was issued after his explanation was rejected.

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The government had objected, arguing that the Court could not use its writ authority under Article 227 of the Indian Constitution because Section 107 of the Central Goods and Service Tax Act, 2017 provides an effective alternative remedy. Under section 107 of Goods and Services Tax Act, one may appeal to the Appellate Tribunal against such order within three months from the date on which the order sought to be appealed against is communicated to the person preferring the appeal.

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 The petitioner argued that sending out a consolidated notice is illegal and violates the jurisdiction.  Since the commodity for which the GST is sought is industry-based, it is not taxable, and taxing twice for the same thing is inherently unfair.

 Since sending a consolidated notice is illegal and goes against the jurisdiction, the division bench of Justices S. G. Mehare and Shailesh P. Brahme has noted that there is prima facie evidence to suspend the demand.  Since the commodity for which the GST is sought is industry-based, it is not taxable, and taxing twice for the same thing is inherently unfair.

The court ruled that the order will be temporarily stayed until a later date since it was initially satisfied with the reasons made by the petitioner's attorney.

To Read the full text of the Order CLICK HERE

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