Facts of the Case

The Petition was filed by M/s Evershine Polymers under Article 226 of the Constitution of India challenging:
• The Show Cause Notice (SCN) No. 77/2024‑25 issued on 23rd July 2024 by the Deputy Commissioner, Anti‑Evasion, CGST – Delhi North; and
• The Order‑in‑Original No. 83/ADC/D.N./ dated 27th January 2025 passed by the Additional Commissioner, CGST – Delhi North demanding tax and penalty totaling ₹1,34,08,276 for alleged wrongful availment/utilization of Input Tax Credit (ITC) exceeding ₹41 crore across multiple financial years.

The Petitioner contended that the issuance of a single consolidated SCN for multiple financial years was contrary to the statutory regime and thus invalid. 

Issues Involved

Whether a single consolidated Show Cause Notice can be validly issued for multiple financial years under the CGST Act, 2017?
Whether provisions of Sections 73 and 74 of the CGST Act permit issuance of a notice “for any period” covering more than one financial year?

Petitioner’s Arguments

The Petitioner argued that:
• The consolidated issuance of SCN for multiple years is not permissible under the CGST Act.
• The statutory language suggests separation of tax periods by financial year, and therefore, separate notices were mandatory.
• The impugned Order and SCN are unsustainable on this ground. 

Respondent’s Arguments

The Respondent countered that:
• Legislative intent and statutory provisions expressly allow notices for “any period” without restricting to financial years.
• In cases of alleged tax evasion or fraud, analysing cross‑year transactions is necessary for establishing wrongful ITC credits.
• The impugned consolidated SCN and order were justified given the factual matrix.

Court Order / Findings

The High Court upheld the validity of issuing a single consolidated SCN for multiple financial years, stating:

Sections 73(3), 73(4), 74(3) and 74(4) of the CGST Act refer to tax determination “for any period” and “for such periods” — clearly enabling a consolidated notice across years.

The use of “financial year” occurs only in Sections 73(10) and 74(10) relating to limitation periods and not in the provision governing issuance of SCNs.

In cases involving alleged fraudulent availment/utilization of ITC, consolidated notices are often necessary to establish patterns of wrongful transactions.

The writ petition was disposed of, with liberty granted to the Petitioner to file an appeal under Section 107 of the CGST Act, 2017 by 30th September 2025, with requisite pre‑deposits.

Important Clarifications

The High Court clarified that a consolidated SCN for multiple financial years does not violate the statutory language when the facts involve alleged fraudulent ITC credits.

The statutory expression “for any period” is deliberately broad to capture cross‑year fraudulent transactions.

The decision distinguishes between provisions dealing with notice issuance and provisions setting the period of limitation.

The order is appealable under Section 107 of the CGST Act, 2017. 

SECTIONS INVOLVED

• Section 73(3), 73(4) — Determination of tax (non‑fraud).
• Section 74(3), 74(4) — Determination of tax (fraud).
• Sections 73(10), 74(10) — Time‑bar/limitation period for order issuance.
• Section 107 — Appeals against orders of adjudication.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/PMS20082025CW53762025_124259.pdf

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