The Karnataka High Court, in M/s Pramur Homes and Shelters v. Union of India & Ors., examined the legality of a composite show cause notice dated 30 September 2025 issued under Section 74 of the Central and Karnataka Goods and Services Tax Acts, 2017, proposing a consolidated demand of ₹11.86 crore towards tax, interest, and penalty for multiple financial years ranging from 2019-20 to 2023-24. The petitioner, a registered partnership firm engaged in real estate development, challenged the notice on the ground that it impermissibly clubbed multiple tax periods into a single proceeding.

The petitioner contended that the GST statutory framework is intrinsically structured on a financial-year basis, covering registration, maintenance of accounts, filing of returns, availment of input tax credit, adjudication, and limitation. It was argued that Sections 73 and 74 of the CGST Act mandate issuance of show cause notices and determination of tax liability separately for each financial year, with distinct limitation periods linked to the due date of the annual return for the relevant year. Clubbing multiple financial years into a single notice, according to the petitioner, amounted to a jurisdictional error, violated principles of natural justice, and caused serious prejudice by denying the opportunity for year-wise rebuttal.

The Revenue opposed the petition, contending that there was no express statutory prohibition against issuing a consolidated show cause notice for multiple financial years, particularly where transactions spanned several years. Reliance was placed on departmental communications and certain judicial precedents to argue that such consolidation was permissible.

After an exhaustive analysis of the CGST/KGST statutory scheme, including Sections 2, 35, 39, 44, 49, 59, 73, and 74, the High Court held that GST assessments are unmistakably financial-year specific. The Court observed that limitation under Sections 73(10) and 74(10) is separately prescribed for each financial year and that permitting a composite notice would blur the statutory distinction between fraud and non-fraud cases, potentially extending limitation impermissibly. The Court further noted that the introduction of Section 74A by the Finance Act, 2024, reinforced the legislative intent that determination of tax liability must be tied to a specific financial year.

Relying on its earlier decisions in Veremax Technologies Services Ltd., Bangalore Golf Club, Chimney Hills Education Society, Albatross Builders and Developers LLP, as well as decisions of other High Courts including Titan Company Ltd. and Milroc Good Earth Developers, the Court held that issuance of a composite show cause notice covering multiple financial years is contrary to the statutory architecture of the GST law and is without jurisdiction.

Accordingly, the Karnataka High Court allowed the writ petition and quashed the impugned show cause notice. Liberty was reserved to the tax authorities to issue separate, independent show cause notices for each financial year strictly in accordance with Sections 73 or 74 of the CGST/KGST Acts and within the prescribed limitation.


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