Calcutta High Court Refuses Writ Against Consolidated GST Section 74 Notice

The Calcutta High Court on 19 May dismissed a writ petition challenging a consolidated show cause notice issued under Section 74 of the Central Goods and Services Tax Act, 2017, holding that the assessee had an efficacious statutory appellate remedy under Section 107 of the Act. Justice Smita Das De refused to interfere with the adjudication order passed against S. S. Iron & Steel & Anr. and relegated the petitioners to the appellate forum.

The petitioners had challenged the legality of an order dated 02.03.2026 passed under Section 74(9) of the CGST Act. The primary grievance of the petitioners was that the GST authorities had issued a consolidated show cause notice covering multiple financial years from 2019-20 to 2023-24, which, according to them, was contrary to the statutory scheme and limitation provisions under the Act.

Before the High Court, the petitioners relied upon the decisions in Whirlpool Corporation and Titan Company Ltd. to contend that bunching of show cause notices across several assessment years was impermissible in law. It was argued that the limitation under the GST provisions applies separately for each financial year and, therefore, a consolidated proceeding could not be sustained. The Court pointed out that the petitioners contended that issuance of a consolidated show cause notice covering multiple financial years was “de hors the mandate of the statutory provision”.

The GST authorities, however, raised a preliminary objection regarding the maintainability of the writ petition on the ground that the petitioners had an effective appellate remedy under Section 107 of the CGST Act. Reliance was placed on the decision in UBS Exports International Pvt. Ltd. and the Supreme Court order in Mathur Polymers.

After hearing both parties, the High Court observed that the petitioners had not challenged the show cause notice at the initial stage and approached the Court only after the adjudication order was passed. The Court held that issues relating to limitation, jurisdiction and validity of the proceedings could be effectively examined by the appellate authority. The Court observed that the belated writ challenge appeared to be “an attempt to stall the multi tiered adjudicatory process envisaged under the statute.”

The Court further noted that an identical issue regarding the permissibility of consolidated show cause notices was already pending consideration before a Larger Bench of the Bombay High Court in Mirloc Good Earth Developers. In view of judicial propriety, the Court refrained from expressing any opinion on the merits of the controversy.

Holding that no exceptional circumstances were made out for interference under Article 226 of the Constitution, the High Court dismissed the writ petition while granting liberty to the petitioners to file an appeal under Section 107 within thirty days. The Court directed that if such appeal is filed within the stipulated period, the appellate authority shall decide the matter on its merits without rejecting it on limitation grounds.

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