Authority Directed to Consider Each Year Separately While Finalizing SCN Issued for Multiple Years | HC

Case Details: Haries Muhammed vs. Assistant Commissioner - [2025] 171 taxmann.com 706 (Kerala)

Judiciary and Counsel Details

• Gopinath P., J.
• Santhosh P. Abraham, Adv., for the Petitioner.
• Smt. Jasmin M.M., GP Adv. & P.R. Sreejith, for the Respondent.

Facts of the Case

The petitioner, a registered taxpayer, filed a writ petition before the Kerala High Court, challenging a consolidated show cause notice (SCN) issued under Section 74 of the CGST/SGST Acts for the assessment years 2017-18 to 2021-22. The petitioner contended that while the 2017-18 period involved non-filing of returns, which may warrant action under Section 74, the subsequent years (2018-19 to 2021-22) only involved an incorrect tax rate application (5% instead of the applicable rate), which does not justify invoking the extended period under Section 74. The petitioner argued that the consolidated SCN imposed an unnecessary penalty risk and that separate adjudication should be conducted for each year. The Revenue countered that separate orders would be issued for each assessment year, and any taxes already paid by the petitioner would be credited accordingly.

High Court Held

The Hon’ble Kerala High Court held that the Competent Authority must adjudicate each assessment year separately and consider the petitioner’s argument that invoking Section 74 for 2018-19 to 2021-22 lacked justification. It directed that any taxes already paid by the petitioner be given due credit and mandated that the petitioner be afforded a personal hearing before final orders are passed. The writ petition was accordingly disposed of with these directions, ensuring procedural fairness in adjudication.