Authority: High Court at Calcutta, Circuit Bench Jalpaiguri

Order Date: 30 June 2026

Case Overview

  • Parties: State Bank of India (petitioner) vs. Commercial Central Goods and Service Tax and Central Excise, SLG Commissionerate, Central Revenue Building and others (respondents), Union of India.
  • Nature of Proceeding: Writ petition (WPA 433 of 2026) under Article 226 challenging a composite show‑cause notice and subsequent order issued by GST authorities under Section 74 of the Central Goods and Services Tax Act, 2017.
  • Key Dates & Documents:
  • Show‑cause notice issued on 25 June 2025 (Annexure P‑8, p.94).
  • Petitioner’s reply with calculation worksheets, invoice‑level details and copies of every invoice filed on 21 July 2025 (Annexure P‑9, p.425).
  • GST authorities rejected the reply, stating lack of invoices and relevant details, and passed an order on 12 December 2025 (Annexure P‑12, p.454).
  • Demand & Penalty: Order confirmed GST demand of Rs 5,48,56,775 (IGST) and imposed an equal penalty of Rs 5,48,56,775, together with interest under Section 50, aggregating to a total liability of approximately Rs 10,97,13,550.
  • Petitioner’s Submissions (Senior Advocate Sakya Sen):

1. The single show‑cause notice clubbing multiple financial years is illegal and beyond jurisdiction.

2. The notice was issued after the statutory limitation period (three years for Section 73 and five years for Section 74) for the years 2018‑19, 2019‑20 and 2020‑21.

3. The GST authorities ignored documents already supplied at the pre‑show‑cause stage, violating natural justice.

4. Invocation of Section 74 was arbitrary, lacking any finding of fraud, willful misstatement or suppression of facts.

  • Respondents’ Submissions (Advocates Dilip Kumar Agarwal & Bishwa Raj Agarwal):

1. The writ petition is not maintainable because a statutory appellate remedy under Section 107 of the Act exists.

2. The limitation question is mixed law‑fact and should be examined by the appellate authority, not the writ court.

3. Consolidated show‑cause notices are permissible where alleged fraud spans several years, citing decisions of the Delhi High Court (Mathur Polymers) and this High Court (Sampa Das).

  • Statutory Provisions Discussed:
  • Section 74(1) – power to issue show‑cause notice for tax not paid, short‑paid, erroneously refunded or wrongly availed input tax credit.
  • Section 74(2) – notice must be issued at least six months before the time limit for order.
  • Section 74(9) – determination of tax, interest and penalty after considering representations.
  • Section 74(10) – order must be issued within five years from the due date of filing the annual return for the relevant financial year.
  • Section 73 – three‑year limitation for assessment under the same Act.
  • Sub‑Section (106) of Section 2 – defines “tax period” as the period for which a return is required.
  • Judicial Precedents Cited:
  • Titan Company Ltd. vs. Joint Commissioner of GST (2023 SCC OnLine Mad 8082).
  • State of Jammu & Kashmir vs. Caltex (India) Ltd. (AIR 1966 SC 1350).
  • Milrue Good Earth Developers vs. Union of India (Bombay HC).
  • Godrej Sara Lee Ltd. vs. Excise & Taxation Officer (2023 SCC OnLine SC 95).
  • Supreme Court observations in State of Jammu & Kashmir (assessment year split) and other High Court decisions confirming that a single notice cannot cover multiple assessment years.

Final Outcome

  • The Court held that Section 74 expressly treats each financial year as a separate unit; therefore a single show‑cause notice cannot lawfully cover multiple years.
  • The show‑cause notice dated 25 June 2025 (Annexure‑P‑8) is de hors the statute and illegal, lacking jurisdiction.
  • Consequently, the order‑in‑original dated 12 December 2025 (Annexure‑P‑12) is also illegal, without jurisdiction and is set aside.
  • The writ petition is allowed; the interim order is vacated; no order as to costs is made.
  • The revenue authorities may re‑initiate proceedings, but strictly in accordance with the law and respecting the separate five‑year limitation for each financial year.

Topics: GST Jurisdiction, Show‑Cause Notice Limitation