Bunching of GST Show Cause Notices Tracker

Statutory Summary and Direct Legal Ratio:
Under Section 73(10) of the CGST Act, 2017, statutory limitation periods are tied strictly to the annual return due date for each specific financial year. The Madras High Court, Andhra Pradesh High Court, Kerala High Court, Karnataka High Court, and Himachal Pradesh High Court have held that issuing a single composite SCN for multiple financial years is ultra vires Section 73(10). Conversely, the Delhi High Court and Allahabad High Court have permitted consolidated notices in Section 74 fraud cases. The issue is currently before the Supreme Court of India in SLP (C) No. 4521/2025.

Executive Summary and Statutory Architecture

A major legal dispute under Indian indirect tax litigation is the departmental practice of "Bunching" or consolidating multiple financial years into a single Show Cause Notice (SCN) issued under Section 73 or Section 74 of the CGST Act, 2017.

1. Statutory Limitation Framework

• Section 73(10) Limitation Mandate: Prescribes a strict 3-year limitation period calculated from the due date of furnishing the annual return for the specific financial year to which the tax relates.
• Section 74(10) Limitation Mandate: Prescribes a 5-year limitation period for fraud, suppression, or wilful misstatement cases.
• Section 160(1) CGST Act: Revenue often invokes Section 160(1) to argue that composite notices are procedural defects saved by law.
• The CBIC Administrative Policy: CBIC internal instructions (F. No. CBIC-20010/67/2025-GST/994) defend consolidated SCNs on grounds of administrative convenience and judicial economy, contending limitation is tested independently for each year.

2. The Legislative Structural Shift: Section 74A (53rd GST Council)

Pursuant to recommendations of the 53rd GST Council, Parliament enacted Section 74A via the Finance (No. 2) Act, 2024. Effective from Financial Year 2024-25 onwards, Section 74A unifies the limitation timelines:

• Common Notice Timeline: SCN must be issued within 42 months from the due date for furnishing the annual return.
• Common Adjudication Timeline: Order must be passed within 12 months from the date of notice.
• This statutory reform structurally harmonizes non-fraud and fraud timelines, eliminating the Section 73 versus Section 74 classification friction for subsequent assessment years.

3. The 57th GST Council Notice Safeguards (October 8, 2026)

In its meeting on October 8, 2026, the 57th GST Council introduced critical relief measures governing SCNs:

• Monetary Floor of 10,000: Barred field formations from issuing SCNs or demand orders where the disputed tax quantum is 10,000 or below.
• Withdrawal of Minor Notices: Mandated systemic withdrawal of all pending legacy notices and summary intimations up to 10,000.
• Common Procedural Standards: Recommended establishing standardized statutory formats and procedures for notices to curb arbitrary multi-year clubbing.

Comprehensive High Court and Supreme Court Judicial Scorecard

The table below details High Court stances across India, official GST Council actions, and Supreme Court SLP escalation status.

Interaction with Section 128A Amnesty Scheme

Where a bunched SCN covers both eligible financial years (FY 2017-18, 2018-19, 2019-20) and ineligible subsequent financial years (FY 2020-21 onwards):

• Severability of Multi-Year Demands: Under CBIC Circular No. 238/32/2024-GST read with Rule 164, taxpayers are not disqualified from amnesty merely because the notice covers multiple years.
• Partial Settlement Mechanism: Taxpayers can pay the full tax demand pertaining to the eligible initial three financial years and obtain a full waiver of interest and penalty for those years via Form GST SPL-01, leaving only subsequent years for adjudication.

Recommended Action Plan for Tax Notice Defense

If your business receives a consolidated Show Cause Notice (Form DRC-01) covering multiple financial years:

1. Check De-Minimis Threshold: If the principal tax demanded in the notice or individual discrepancy is 10,000 or below, apply for administrative withdrawal under the 57th GST Council mandate.
2. Raise Preliminary Jurisdictional Objections: In Form GST DRC-06, challenge the maintainability of the composite notice under Section 73(10), asserting that each year constitutes an independent assessment unit.
3. Cite Binding High Court Precedents: Rely on Titan Company Ltd. (W.P. No. 33164 of 2023), S.J. Constructions (W.P. No. 4410/2025), Lakshmi Mobile (W.P.(C) No. 9123/2025), and Amit Engineers (CWP No. 1890/2026).
4. Isolate Eligible Amnesty Periods: If the bunched notice encompasses FY 2017-18 to 2019-20, file an application under Section 128A and Rule 164 to extinguish interest and penalties for those years.
5. Writ Petition Strategy Under Article 226: If the assessing authority refuses to bifurcate the notice or evaluate year-specific limitation bars, approach the jurisdictional High Court for certiorari quashing.

For expert legal defense against bunched GST notices and High Court writ filings, consult the ITRnGST Legal Team.