FACTS OF THE CASE (Professional Summary)

Petitioner M/s Shree Shyam Polymers filed W.P.(C) 5202/2025 before the High Court of Delhi under Article 226 of the Constitution challenging:

  1. Order‑in‑Original No. 83/ADC/D.N./Shaukat Ali Nurvi/2024‑25 dated 27.01.2025 passed by the Respondent, Additional Commissioner, CGST, Delhi North; and
  2. Show Cause Notice No. 77/2024‑25 dated 23.07.2024 issued by Deputy Commissioner, CGST (Anti‑Evasion), Delhi North.

The impugned orders alleged wrongful and fraudulent availment/utilization of Input Tax Credit (ITC) over multiple financial years (2017–2021) amounting to significant sums exceeding crores. The Petitioner challenged the legality of issuing a single consolidated Show Cause Notice (SCN) and order for multiple years under the CGST Act, 2017.

ISSUES INVOLVED

  1. Whether a single consolidated SCN and Order‑in‑Original for multiple financial years is permissible under Section 73 and Section 74 of the CGST Act, 2017?
  2. Whether the impugned consolidated order raising demands including ITC reversal and penalty is appealable and/or legally sustainable? 

PETITIONER’S ARGUMENTS

The Petitioner contended that:

  • A single SCN covering multiple financial years was not permissible as each financial year constituted a distinct tax period requiring separate notice.
  • The consolidated order violated statutory requirements of the CGST Act and deprived the Petitioner of proper procedural safeguards.
  • The order was liable to be quashed on merits and on grounds of legality, and further contended that the Tribunal or appropriate appellate authority should examine merits rather than high court in writ jurisdiction.

RESPONDENT’S ARGUMENTS

The Respondent, Additional Commissioner CGST, argued that:

  • Sections 73 and 74 of the CGST Act use language such as “for any period” and “for such periods”, which legally permits issuance of a single consolidated SCN covering multiple years as long as the grounds remain the same.
  • Allegations of fraudulent availment/utilization of ITC inherently require assessment over inter‑connected transactions across multiple years.
  • The consolidated notice was necessary to disclose and adjudicate the pattern of wrongful ITC transactions in entirety.

COURT ORDER / FINDINGS

The Delhi High Court (Coram: Justice Prathiba M. Singh & Justice Shail Jain) held that:

  • Sections 73(3), 73(4), 74(3) & 74(4) of the CGST Act expressly refer to “for any period” / “for such periods”, indicating that consolidated SCNs and orders covering multiple years are permissible when the allegations and grounds of tax shortfall/ITC misuse are uniform.
  • The legislative distinction between “period” and “financial year” (as used in Sections 73(10) and 74(10)) demonstrates that notice for multiple years is not barred by statute.
  • In cases of alleged fraudulent ITC misuse, transactional analysis naturally spans multiple accounting periods; hence consolidation is not an invalid procedural device.
  • The impugned order was an appealable order under Section 107 of the CGST Act, and therefore the correct remedy for the Petitioner was to file an appeal before the Appellate Authority rather than quashing the order outright in writ jurisdiction.
  • The petition was disposed of with liberty to file appeal by 30.09.2025 with necessary pre‑deposits; the appellate authority could not dismiss on limitation grounds if filed within the extended period directed by this Court.

Order: Writ petition disposed of accordingly. 

IMPORTANT CLARIFICATIONS

Consolidated SCN for multiple tax periods is legally valid under Sections 73 & 74 of CGST Act where charges relate to continuous transactional pattern.

High Court reaffirmed that consolidated notices/orders are necessary to unravel complex fraudulent availment of Input Tax Credit spanning several years.

Even if issuance of consolidated SCN is permissible, appeal rights under Section 107 cannot be ousted; therefore merits of impugned claims should be adjudicated by appellate authority. 

SECTIONS INVOLVED (Statutory)

  • Section 73 – Determination of tax not paid or short paid or ITC wrongly availed or utilised
  • Section 74 – Determination of tax in cases involving fraud, misstatement, suppression
  • Section 107 – Appeals against orders passed by CGST authorities
  • Section 2(106) – Definition of tax period under the CGST Act

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS20082025CW52022025_123940.pdf

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