Taxpayer Gets Relief: Kerala HC Strikes Down Consolidated GST Proceedings [Read Order]

The Kerala High Court has granted relief to a taxpayer by quashing consolidated GST proceedings, ruling that the issuance of a single Show Cause Notice (SCN) covering multiple financial years is legally untenable.

Justice Ziyad Rahman A.A. delivered the judgment while allowing a writ petition filed by Bemmanakkodan Reghu, proprietor of Karthika Foods and Traders. The petitioner had challenged Ext.P1, a consolidated SCN dated May 12, 2025, and Ext.P4, an Order-in-Original dated October 6, 2025, issued by the State TaxOfficer, Hosdurg. These documents pertained to multiple financial years, specifically from 2018-19 to 2022-23. The petitioner contended that the department's action violated established legal principles regarding the distinctness of assessment years.

Accepting the petitioner's submission, the Court referred to the binding precedents set by a Division Bench of the same High Court in Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories and Tharayil Medicals v. Deputy Commissioner, Thrissur. These earlier judgments had categorically held that issuing a composite notice for multiple assessment years is not legally sustainable.

"I find merit in the said submission, in view of the fact that, such a finding was indeed entered into by the Division Bench of this Court," Justice Rahman observed.

Consequently, the Court quashed both the consolidated Show Cause Notice and the subsequent Order-in-Original. However, the judgment provides the Revenue Department with the liberty to initiate fresh proceedings by issuing separate notices for each of the relevant assessment years.

To ensure fairness in the re-adjudication process, the Court directed that the period from the date of the original notice (Ext.P1) until the date the petitioner receives the certified copy of the judgment shall be excluded from the calculation of the limitation period. This exclusion protects the department's right to pursue legitimate claims while correcting the procedural flaw. All other contentions raised by both parties were left open for adjudication during the fresh proceedings.

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