High Court Sets Aside the Composite GST Assessment Order

Aruna Slab Polishing Industries, a business based at Betamcherla, Kurnool District, Andhra Pradesh, represented by Palem Balarami Reddy, the owner of the company, filed a Writ Petition before the High Court of Andhra Pradesh at Amaravati under Article 226 of the Constitution of India. The petition was heard by the Division Bench comprising of Hon’ble Sri Justice R. Raghunandan Rao and the Hon’ble Sri Justice T.C.D. Sekhar.

The central grievance for the petitioner under the Act was that the GST authority had, in its single assessment order, rendered for multiple financial years in one single order, which is an act that is strictly disallowed by the provisions of Sections 73 and 74 of the Goods and Service Tax Act, 2017. Under this, a separate show cause notice and a separate assessment order are required for each period, that is, for each given tax period, each month or every single financial year. Filing multiple years together under one composite order is to refuse to provide the taxpayer the right and reasonable chance to pay the tax owing for each year in an individual manner, thereby obstructing the natural justice system.

The petitioner also contested the recovery notice dated June 30, 2025, under Section 79 of the GST Act for the attachment and sale of immovable properties and the auction notice in Form DRC-17 dated February 24, 2026, which were the direct result of the unlawful composite assessment order.

The Division Bench, hearing both sides, explained that such a very legal question had already been resolved by a coordinate bench of the same court in W.P. Nos. 11028 of 2025 and batch, which held that a single show cause notice or a single composite assessment order cannot be entered for more than one tax period. On this strong case law, the Court endorsed the petitioner’s position on the ground on which the impugned assessment order dated 12 December 2022 had been challenged and overturned.

Further, the Court set aside the coercive recovery steps against the petitioner (including the property attachment, which was a result of the now-quashed order) which the petitioner pursued. After overturning the order, the Court enabled the GST authority to carry out fresh proceedings as it has the right to proceed to an additional period, but by issuing separate assessment orders for each financial year separately and with the stipulation that the petitioner first pays 20% of the disputed tax demand. Any payment already made by the petitioner in respect of the tax imposed by the original assessment order will be adjusted against this 20% requirement. It also put the petitioner’s rights on guard regarding limitation in the application of proceedings and noted that the computing limitation periods for fresh litigation shall be excluded from the date of the original assessment order till the date of receipt of this court order.

Writ Petition is disposed of, setting aside the impugned order. This decision is a major statement, as it shows that GST authorities need to work very properly, that in the case of multi-year assessment orders, the procedure must be strictly adhered to, and orders may not be rendered for multiple years as prescribed under the GST Act. Each period of taxation needs to be assessed individually for taxpayers, which allows them every opportunity to respond as a separate assessment of taxes.