Facts of the Case

The petitioner, M/s. Pavan Kumar Reddy Bhumireddy, a registered taxpayer under the GST laws, challenged a composite assessment order dated 18.09.2025 issued by the Deputy Assistant Commissioner, State Tax. The impugned order covered the assessment period from FY 2019-20 to FY 2023-24 and raised the following demands:

  • Tax Demand: ₹73,63,226 (CGST ₹36,81,613 + SGST ₹36,81,613) under Section 74 of the CGST/SGST Act, 2017.
  • Interest: ₹35,42,164 (CGST ₹17,71,082 + SGST ₹17,71,082) under Section 50.
  • Penalty: ₹73,63,226 (CGST ₹36,81,613 + SGST ₹36,81,613) under Section 74.

The petitioner filed a writ petition before the Andhra Pradesh High Court seeking quashing of the assessment order, interest demand, and penalty.

Issues Involved

  1. Whether a single composite assessment order can legally be issued under the GST law for multiple financial years.
  2. Whether such a composite assessment order violates the provisions of Sections 73 and 74 of the CGST/SGST Act, 2017.
  3. Whether the assessment order was liable to be set aside and remanded for separate proceedings for each assessment year.

Petitioner’s Arguments

The petitioner contended that:

  • The assessment order was illegal because it combined multiple financial years (2019-20 to 2023-24) into one assessment order.
  • Such a composite order was contrary to the statutory framework under Sections 73 and 74 of the CGST/SGST Act, 2017.
  • The petitioner relied upon the earlier judgment of the Andhra Pradesh High Court in W.P. No.11028 of 2025 & batch, wherein the Court had already held that separate assessment proceedings are required for separate tax periods.
  • Although several grounds were raised in the writ petition, the petitioner confined the challenge primarily to the illegality of the composite assessment order

Respondent’s Arguments

The respondents, represented by the Government Pleader for Commercial Taxes, defended the assessment order.

However, the respondents could not dispute the legal position already laid down by the Division Bench of the Andhra Pradesh High Court regarding the impermissibility of issuing a single assessment order covering multiple assessment years.

Court Order / Findings

The Andhra Pradesh High Court observed that:

  • The issue was already settled by the Division Bench in W.P. No.11028 of 2025 & batch.
  • A single show cause notice or a single assessment order cannot be issued for more than one tax period.
  • Once the due date for filing the annual return has expired, each financial year constitutes a separate assessment period, requiring independent proceedings.
  • Since the impugned assessment order covered five different financial years, it was contrary to the provisions of the GST law.

Accordingly, the Court:

  • Set aside the composite assessment order dated 18.09.2025.
  • Remanded the matter to the tax authorities.
  • Granted liberty to the department to initiate fresh assessment proceedings separately for each assessment year.
  • Directed that the period between the issuance of the impugned assessment order and the receipt of the High Court's judgment shall be excluded while computing limitation.
  • Left all other legal grounds raised by the petitioner open for consideration in the fresh proceedings.

Important Clarification

This judgment reiterates that:

  • GST assessment proceedings cannot be clubbed for multiple financial years through a single show cause notice or assessment order.
  • Separate tax periods require separate adjudication under the GST law.
  • Tax authorities must issue independent notices and independent assessment orders for each assessment year where the annual return due date has been reached.
  • The decision strengthens procedural safeguards available to taxpayers against composite assessment proceedings.

Sections Involved

  • Section 50 of the CGST/SGST Act, 2017 – Interest on delayed payment of tax.
  • Section 74 of the CGST/SGST Act, 2017 – Determination of tax involving fraud, wilful misstatement or suppression of facts.
  • Article 226 of the Constitution of India.

Link to Download the Order

https://www.mytaxexpert.co.in/uploads/1785407722_2420compressed.pdf

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