The Andhra Pradesh High Court, in M/s P. Venkataramaniah & Co. v. Assistant Commissioner, ST, Nellore-II Circle & Others, has set aside a composite GST assessment order covering multiple financial years. The Court held that a single show cause notice or composite assessment order cannot ordinarily be issued for more than one tax period or financial year.
The judgment was delivered on 8 July 2026 by a Division Bench comprising Justice Ninala Jayasurya and Justice T.C.D. Sekhar in Writ Petition No. 2136 of 2025, reported as 2026:APHC:27416.
Background of the Case
The petitioner was a partnership firm engaged in providing works contract services to various government departments. It challenged an assessment order dated 31 August 2024, which covered the tax periods from 2018-19 to 2021-22.
The principal contention raised before the High Court was that a single assessment order covering several tax periods and financial years was impermissible under the GST law. The petitioner relied upon the earlier decision of a coordinate Bench in S.J. Constructions v. Assistant Commissioner & Others, where the Court had considered the legality of composite notices and assessment orders covering more than one tax period.
Composite Assessment for Multiple Years Held Impermissible
The High Court noted that permitting a common assessment order for more than one financial year could affect statutory rights available to a registered person. These include the benefit contemplated under Section 128 of the Andhra Pradesh GST Act and the right to independently pursue appellate remedies against assessment orders passed under Sections 73 or 74.
The Court reiterated that a single show cause notice or composite assessment order cannot be issued for more than one tax period. Where assessment is undertaken after the due date for filing the annual return, separate proceedings are required for each financial year.
The State’s counsel did not dispute either the applicable legal position or the fact that the impugned order was a composite order covering multiple tax periods.
Assessment Order Set Aside
Considering the admitted factual and legal position, the High Court set aside the assessment proceedings dated 31 August 2024.
However, the Court granted liberty to the competent authority to issue separate notices and undertake assessments independently for the relevant tax periods. Such proceedings must be conducted after providing the petitioner with a proper opportunity of hearing and in accordance with law.
Limitation Period Protected
The High Court further directed that the period commencing from the date of the impugned assessment order until the date on which the authorities receive the High Court’s order would be excluded while computing limitation.
The writ petition was accordingly allowed without any order as to costs. Pending miscellaneous petitions were also closed.
Significance of the Judgment
The judgment reinforces the principle that GST assessment proceedings must be initiated and concluded with reference to the applicable tax period or financial year. Tax authorities cannot consolidate several financial years into a single notice or assessment order where such consolidation interferes with the statutory scheme, limitation provisions or appellate rights of the taxpayer.
The ruling is relevant for businesses, GST practitioners, advocates, Chartered Accountants and tax consultants dealing with notices or assessment orders that combine liabilities relating to multiple financial years.