Kerala High Court Quashes Composite Show Cause Notice Covering Multiple Financial Years

The Kerala High Court has set aside a consolidated show cause notice and the subsequent order issued against a petitioner for multiple financial years, holding that such a composite notice is not legally sustainable.

Background of the case

The present petition has been filed by Mehrin Trading against the Union of India and others, challenging the show cause notice issued by the second respondent and the order-in-original issued by the respondents. These proceedings covered several financial years from February 2021 to March 2021, April 2021 to March 2022, and April 2022 to February 2023.

The main argument raised by the petitioner was that issuing a single, combined notice for multiple assessment years is legally improper. The petitioner further cited previous rulings of the Court in Joint Commissioner (Intelligence & Enforcement) v. M/s Lakshmi Mobiles Accessories and Tharayil Medicals (M/s), Thrissur v. Deputy Commissioner, which held that separate notices must be issued for separate assessment years.

High Court’s Ruling

After hearing both sides, the Court found merit in the petitioner’s argument. It noted that the issue had already been clearly decided in the earlier judgements cited.

The Court quashed the Show cause notice and order-in-order. However, it granted liberty to the authorities to issue fresh, separate notices for each relevant assessment year, in accordance with the law.

The Court also clarified that, for the purpose of calculating the limitation period, the time between the date of the order in original and the date on which the petitioner receives a certified copy of the judgement will be excluded.