Facts of the Case

Neelimarla Jute Mills Company Limited was served with a single assessment order dated 9 February 2024 in Form GST DRC-07, covering the entire period from 2017-2018 to 2021-2022, preceded by show cause notices dated 25.09.2023, 11.10.2023 and 02.11.2023. The petitioner challenged this composite, multi-year assessment as impermissible under the GST Act.

Issues Involved

  1. Whether a single show cause notice or a single composite assessment order can validly cover more than one tax period/financial year under Sections 73 and 74 of the GST Act.

Petitioner's Arguments

  • A single assessment order spanning five financial years violates the scheme of Sections 73 and 74 of the GST Act, 2017, and is liable to be set aside.

Respondent's Arguments

  • (The order records no separate contest by the Revenue on this point beyond appearance through the Government Pleader for Commercial Tax; the petition proceeded on the settled Division Bench position.)

Court Order / Findings

  • Following the Division Bench ruling of the same Court in W.P. No. 11028 of 2025 & batch, which held that a single show cause notice or composite assessment order cannot be issued for more than one tax period — a month, if assessment is undertaken before the due date for the annual return, or a year once that due date has passed — the Court held the impugned composite order for five financial years to be similarly impermissible.
  • The impugned order dated 9 February 2024 was set aside, with liberty to the Department to initiate fresh proceedings separately for each assessment year.
  • The period from the date of the impugned order till receipt of the present order was directed to be excluded for computing limitation; no costs were awarded.

Important Clarification

  • A single show cause notice or a single composite assessment order cannot validly straddle more than one financial year (or, before the annual-return due date, more than one month) under Sections 73/74 of the GST Act — each tax period requires its own separate notice and order, and a composite multi-year order is liable to be set aside on this ground alone.

Sections Involved

  • Section 73, CGST/APGST Act, 2017 – demand of tax not involving fraud/suppression, tied to a specific tax period.
  • Section 74, CGST/APGST Act, 2017 – demand of tax involving fraud/suppression, tied to a specific tax period.

Decision – In Favour of

Decided in favour of the Assessee – the composite five-year assessment order is set aside, with liberty to the Department to proceed year-wise.

Case Details

  • Court: High Court of Andhra Pradesh at Amaravati
  • Case No.: Writ Petition No. 10094/2025
  • Coram: Hon'ble Justice R. Raghunandan Rao and Hon'ble Justice Subhendu Samanta
  • Date of Order: 29 October 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.