Facts of the Case

Sri Sai Venkataramana Constructions, represented by its Managing Partner Amara Sree Ramulu, was served an assessment order dated 31.08.2024 in Form GST DRC-07 by the Assistant Commissioner, State Tax, Nellore, covering an extraordinarily wide span — July 2017 to March 2023 — and confirming a total demand of Rs. 1,38,92,827/- in tax (CGST, SGST and IGST components), Rs. 87,56,579/- in interest and Rs. 15,39,284/- in penalty. Its appeal against the order was rejected by the Appellate Additional Commissioner, State Tax, Tirupati, without considering the petitioner's contention that the order itself was time-barred. The petitioner approached the Andhra Pradesh High Court under Article 226.

Issues Involved

  1. Whether a single, composite assessment order for more than one financial year — here, spanning nearly six years — is permissible under Sections 73 and 74 of the GST Act, 2017.
  2. Whether the Appellate Authority erred in rejecting the appeal without considering the contention that the order under appeal was barred by limitation.

Petitioner's Arguments

  • The petitioner contended that a single assessment order passed for more than one financial year is violative of Sections 73 and 74 of the GST Act, and separately argued that the order appealed against was barred by limitation, rendering it no order in the eyes of law — a point the Appellate Authority failed to consider.

Respondent's Arguments

  • The order does not record a distinct substantive defence beyond the Government Pleader's appearance; the disposal proceeded principally on the settled legal position established in the Court's own precedent.

Court Order / Findings

  • The Court relied on its Division Bench ruling in W.P.No.11028 of 2025 and batch, which held that a single show cause notice or composite assessment order cannot be passed covering more than one tax period — limited to a single month if assessment is taken up before the annual return due date, or a single year if that due date has already passed.
  • Applying that ratio to an assessment spanning July 2017 to March 2023 in one composite order, the Court set aside the impugned order dated 31.08.2024, leaving it open to the respondents to initiate fresh proceedings separately for each assessment year.
  • The period from the date of the impugned order to receipt of this order was directed to be excluded for computing limitation for any fresh proceedings.

Important Clarification

  • A GST demand cannot be raised through a single, composite show cause notice or assessment order clubbing multiple financial years together once the annual return due date for those years has passed — the department must issue separate notices and orders, year by year, and a composite multi-year order is liable to be set aside on this ground alone, independent of the merits of the tax demand.

Sections Involved

  • Section 73, Central Goods and Services Tax Act, 2017 – determination of tax not paid or short paid for reasons other than fraud, requiring a period-specific notice/order.
  • Section 74, Central Goods and Services Tax Act, 2017 – determination of tax involving fraud, wilful misstatement or suppression, subject to the same period restriction.

Decision – In Favour of

Allowed; entirely in favour of the Assessee, with the composite multi-year order set aside and liberty reserved to the department to reinitiate year-wise proceedings.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: W.P. No. 4354 of 2025
  • Coram: Justice R. Raghunandan Rao and Justice Subhendu Samanta
  • Date of Order: 05.11.2025

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.