Case: S.J. Constructions vs. Assistant Commissioner
Citation: [2025] 178 taxmann.com 570 (AP & Telangana HC)
Date of Judgment: 17 September 2025
Bench: Justice R. Raghunandan Rao & Justice T.C.D. Sekhar
A recurring controversy in GST adjudication has been the issuance of composite show cause notices (SCNs) and combined assessment orders covering multiple tax periods. Taxpayers have consistently argued that such composite proceedings violate the statutory design of period-wise adjudication and infringe their rights to independent appeal, rectification, and waiver.
In a significant ruling, the Andhra Pradesh High Court in S.J. Constructions vs. Assistant Commissioner has held that each tax period under GST is a distinct adjudicatory unit, and that composite notices or orders for multiple years are legally impermissible.
Facts and Grounds
The petitioners were subjected to assessment orders covering the tax periods 2017–18 to 2021–22 under both the APGST and CGST Acts. They challenged these orders primarily on two grounds:
-
The orders were unsigned and lacked a Document Identification Number (DIN); and
-
The authorities had clubbed several financial years together through common show cause notices and composite assessment orders, depriving the petitioners of distinct statutory remedies.
Court’s Analysis
The High Court examined the legal framework under the Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017, with particular reference to:
-
Section 73 – Determination of tax not involving fraud;
-
Section 74 – Determination of tax involving fraud;
-
Section 107 – Appeal to Appellate Authority; and
-
Section 128 – Power to waive penalty or late fee.
It observed that both statutes are built upon the concept of distinct tax periods—each month or year being a separate unit for liability, adjudication, and appeal.
Accordingly, a single show cause notice or assessment order cannot validly cover multiple tax periods, as doing so would prejudice the taxpayer’s statutory rights, including the right to appeal and to seek relief under Section 128.
Judicial Finding
“A single show cause notice or a composite assessment order cannot be passed in relation to more than one tax period—whether monthly or annual—once the due date for filing the annual return has reached. Any such composite action would adversely affect the registered person’s right to appeal and to seek benefit under Section 128.”
The Court therefore set aside the impugned composite orders, granting liberty to the Department to initiate fresh proceedings separately for each assessment year.
Professional Insight
This ruling affirms that procedural discipline in GST is not a mere formality but a statutory safeguard. The law envisages period-specific adjudication for clear reasons — to preserve accuracy, transparency, and remedy.
A composite order, by collapsing several tax years into one, can distort turnover computations, deny year-wise defenses (like ITC reconciliations or exemptions), and restrict appellate or condonation rights that operate independently per period.
For the Department, the verdict serves as a compliance compass — to ensure that every show cause notice and order respects the unit-wise structure of the Act.
For taxpayers and professionals, it provides a strong legal precedent to challenge any consolidated or overlapping GST orders.
Conclusion
The S.J. Constructions judgment restores the fundamental equilibrium between administrative efficiency and taxpayer justice.
By insisting that each tax period must be adjudicated on its own merit, the Andhra Pradesh High Court has reinforced both the legislative intent and procedural fairness of the GST regime — ensuring that speed in enforcement never eclipses the taxpayer’s right to due process.
