Facts of the Case

The respondent, M/s MCR Marketing, a proprietary concern (GSTIN 29AIYPT4994Q1ZF) represented by its proprietrix Smt. Rajini Tamrakar, had been issued a common/consolidated show cause notice dated 18.06.2024 under Section 74 of the CGST Act, followed by Form GST-DRC-01 dated 05.08.2024, Form GST-DRC-07 dated 16.01.2025, and an Order-in-Original dated 31.12.2024. The respondent had challenged these before the Single Judge in W.P.No.5739/2025, who by order dated 20.01.2026 quashed the consolidated show cause notice and consequential proceedings. Aggrieved, the Revenue — the Superintendent of Central Tax and connected officers of the West and Mysore Audit Commissionerates — filed the present intra-Court writ appeal under Section 4 of the Karnataka High Court Act.

Issues Involved

  1. Whether the Single Judge was correct in quashing the common show cause notice and consequential Order-in-Original on the ground that a Section 74 notice cannot cover multiple financial years/tax periods in one consolidated notice.
  2. If the notice and order are restored, what protection should be extended to the assessee given the time already spent in litigation.

Petitioner's Arguments

(Here, the Revenue was the appellant.) The Revenue's standing counsel submitted that the issue stood squarely covered by this Court's own decision dated 24.04.2026 in W.A.No.1751/2024 and Connected Appeals, which had already held that a consolidated Section 73/74 show cause notice for multiple financial years is legally permissible, and that the Single Judge's contrary view could not be sustained.

Respondent's Arguments

(MCR Marketing, as respondent, was the original writ petitioner.) No serious opposition was recorded to the applicability of the coordinate ruling in W.A.No.1751/2024; the only substantive protection sought, implicit in the disposal, was a fair opportunity to pursue the statutory remedy of appeal without being defeated on limitation given the time consumed in the writ proceedings.

Court Order / Findings

  • The Court held that the ratio of its decision dated 24.04.2026 in W.A.No.1751/2024 and Connected Appeals — that a consolidated/common show cause notice under Section 74 covering more than one financial year is permissible — applied fully to restore the show cause notice and Order-in-Original in this case as well.
  • Since the Order-in-Original had been passed pursuant to the Section 74 notice, and having regard to the appellate authority's limited power to condone delay coupled with the respondent having diligently pursued the writ remedy, the Court granted six weeks from the date of the order for the respondent to file a statutory appeal.
  • If such appeal is filed within the time granted, the appellate authority is directed to consider it on merits without raising the plea of limitation.
  • The writ appeal was allowed, the Single Judge's order set aside, and the show cause notice, DRC-01, DRC-07 and Order-in-Original were restored.

Important Clarification

  • Following the Karnataka High Court's ruling in W.A.No.1751/2024, a consolidated Section 73/74 CGST show cause notice spanning multiple financial years is not per se invalid.
  • Where such a notice/order is restored on appeal after being quashed by a Single Judge, courts will typically grant a fresh limitation window (here, six weeks) for the assessee to pursue the statutory appellate remedy without prejudice on limitation, in recognition of time already spent bona fide pursuing the writ remedy.

Sections Involved

  • Section 74, Central Goods and Services Tax Act, 2017 – determination of tax not paid by reason of fraud, wilful misstatement or suppression of facts; the provision under which the consolidated notice and Order-in-Original were issued.
  • Section 107, Central Goods and Services Tax Act, 2017 – statutory appeal against an Order-in-Original, to which the respondent was relegated.
  • Section 4, Karnataka High Court Act, 1961 – the provision under which the intra-Court writ appeal was filed.

Decision – In Favour of

The decision is in favour of the Department — the writ appeal was allowed and the show cause notice/Order-in-Original restored — though the assessee was given a protected window to pursue its statutory appeal on merits.

Case Details

Court: High Court of Karnataka at Bengaluru
Case No.: Writ Appeal No. 924 of 2026 (T-RES)
Neutral Citation: 2026:KHC:23103-DB
Coram: Justice S.G. Pandit and Justice K.V. Aravind
Date of Order: 24.04.2026

Link to Download the Order

Click here to view/download the full order

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.