GST Dept Must issue Separate Notices for Each Financial Year: Madras HC Strikes Down Bunched Notices for 2018-2024 [Read Order]

The Madras High Court has held that the Goods and Services Tax (GST) Department cannot issue consolidated or “bunched” show cause notices covering multiple financial years, and that each financial year must be dealt with separately.

The petitioner, M/s. KAL Media Services Pvt Ltd had challenged the impugned show cause notice dated 19 June 2025 and the consequent notice dated 30 June 2025, contending that such clubbing of multiple years into one proceeding was impermissible under the GST Act.

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When the matter was taken up, both the petitioner’s counsel and the respondent’s counsel submitted that the issue involved was identical to one already decided by the High Court in its common order dated 21 July 2025 in W.P. Nos. 29716 of 2024 etc. batch.

In its earlier ruling, the Court had laid down clear principles governing the issuance of GST show cause notices. It was stated that the GST Act permits issuance of such notices only on the basis of a defined “tax period.”

In addition, the earlier decision, it was ruled that where an annual return has been filed, the entire financial year is treated as the tax period, and accordingly, the show cause notice must be framed with reference to that return. In situations where notices are issued before the filing of annual returns, they may be issued with reference to monthly returns. However, once annual returns are filed or the limitation period has commenced, any notice must necessarily be based on the annual return of the relevant financial year.

Justice Krishnan Ramasamy held that no show cause notice can cover more than one financial year, as such “bunched” notices are impermissible in law. Consequently, any notices issued by clubbing multiple financial years together are without jurisdiction and therefore liable to be quashed.

Additionally, the court in this case determined that the contested notifications, which covered the six-year period from 2018 to 2024 in a single action, had the same legal flaw.

The court found that the department's action was unsustainable and lacked jurisdiction since the GST Act does not allow for the grouping of several fiscal years into a single notice.

Accordingly, the Court quashed the impugned notice and its consequential notice dated 30 June 2025 to the extent they sought to club multiple years together.

However, the Court granted liberty to the GST Department to initiate fresh proceedings for each financial year separately, within four weeks from the receipt of the order, or before expiry of the limitation period for each respective year, whichever is later.

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