Facts of the Case

The petitioner, Mr. Meganatha Naidu Vadlamudi, a registered taxpayer under the GST law, challenged Order-in-Original No. 08/2025-GST-Adjn (AC) dated 03.12.2025 passed by the Assistant Commissioner of Central Tax. The impugned order covered multiple financial years, namely 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23, and demanded tax, interest and penalty under Section 74 of the CGST Act, 2017.

The petitioner approached the Andhra Pradesh High Court under Article 226 of the Constitution seeking quashing of the composite assessment order on the ground that such a common order for several assessment years was contrary to the provisions of the GST law and violated the principles of natural justice.

Issues Involved

  1. Whether a single composite assessment order under the GST Act can legally cover multiple financial years.
  2. Whether issuance of a common adjudication order for different tax periods is permissible under Sections 73 and 74 of the CGST Act, 2017.
  3. Whether such a composite assessment order is liable to be set aside in view of the earlier decision of the Andhra Pradesh High Court.

Petitioner's Arguments

  • The impugned Order-in-Original was illegal as it combined assessment proceedings relating to five different financial years into a single adjudication order.
  • Sections 73 and 74 of the CGST Act, 2017 contemplate separate proceedings for separate tax periods and do not authorize a consolidated assessment covering multiple financial years.
  • The impugned order was contrary to the binding judgment of the Andhra Pradesh High Court in W.P. No.11028 of 2025 & Batch, wherein the Court had already held that composite show cause notices or assessment orders covering multiple tax periods are not legally sustainable.
  • The order violated Articles 14, 19(1)(g), 21, 265 and 300A of the Constitution of India and the principles of natural justice.

Respondent's Arguments

The respondents defended the adjudication proceedings. However, in view of the earlier Division Bench judgment on the issue of composite assessment orders, the principal question before the Court was confined to the legality of issuing a single assessment order covering multiple financial years.

Court Order / Findings

The Andhra Pradesh High Court observed that a Division Bench of the same Court had already held in W.P. No.11028 of 2025 & Batch that:

  • A single show cause notice or
  • A single composite assessment order

cannot be issued for more than one tax period, whether relating to multiple months or multiple financial years, depending upon the relevant statutory time limits.

Following the earlier binding precedent, the Court held that the impugned assessment order covering FY 2018-19 to FY 2022-23 was legally unsustainable.

Accordingly, the High Court:

  • Set aside the composite Order-in-Original dated 03.12.2025.
  • Remanded the matter to the GST authorities.
  • Granted liberty to the department to initiate fresh assessment proceedings separately for each assessment year in accordance with law.
  • Directed that the period between the issuance of the impugned order and receipt of the High Court's order shall be excluded while computing limitation for fresh proceedings.
  • Left all other grounds raised by the petitioner open without adjudicating upon them.

Important Clarification

  • Separate assessment proceedings are required for each financial year under Sections 73 and 74 of the CGST Act.
  • Composite assessment orders covering several financial years are not permissible under the GST law.
  • The judgment reinforces the earlier Andhra Pradesh High Court ruling that every tax period must be assessed independently.
  • The department retains the right to initiate fresh proceedings separately for each assessment year, subject to limitation after excluding the period directed by the Court.

Sections Involved

  • Section 73 – Determination of tax not paid, short paid, erroneously refunded or input tax credit wrongly availed or utilized (other than fraud cases), CGST Act, 2017.
  • Section 74 – Determination of tax not paid, short paid, erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud, wilful misstatement or suppression of facts, CGST Act, 2017.
  • Article 226 of the Constitution of India.
  • Articles 14, 19(1)(g), 21, 265 and 300A of the Constitution of India.

Link to Download the Order-https://mytaxexpert.co.in/uploads/1784808851_1926compressed.pdf

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