Composite SCN for Multiple Years Not Illegal; Writ Dismissed

Case Summary:

• Case Title: M/s KE Agro Products Pvt Ltd v. Joint Commissioner of State Tax (Intelligence & Enforcement)

• Court Name: High Court of Kerala at Ernakulam

• Petition Number: WP(C) No. 3013 of 2025

• Category of Dispute: Adjudication Procedure under Section 74

• Date of Judgement: 24 January 2025

• Relevant Sections: Section 74, CGST Act, 2017

• CGST/SGST Rule Involved: Not directly discussed

Facts of the Case:

(Refer ¶1–3)

• The petitioner, M/s KE Agro Products Pvt Ltd, received a composite show cause notice dated 24.07.2024 covering six financial years (2017–18 to 2022–23) under Section 74 of the CGST Act.

• The petitioner filed a reply on 03.09.2024 (Exhibit P2), sought personal hearing and cross-examination, and challenged the legality of the composite SCN.

• Cross-examination proceedings commenced, with one such session held on 23.01.2025.

• Petitioner alleged that the department may pass a single composite adjudication order and sought court direction for separate orders per financial year.

Question(s) in Consideration:

(Refer ¶1, ¶4)

1. Whether a composite show cause notice covering multiple financial years is legally sustainable under the CGST Act?

2. Whether the Court should intervene and direct the adjudication officer to pass separate orders for each financial year and ensure adequate hearing?

Observations of the Court:

(Refer ¶3–5)

• The adjudication process was ongoing, and cross-examination was already granted.

• The Court found the petitioner’s apprehension premature and speculative since no final order had been passed.

• The statute provides sufficient remedy in case of an adverse adjudication.

• The Court referred to W.P.(C) No. 35156 of 2024, which upheld the legality of composite SCNs.

• The Court found no procedural violation or denial of natural justice so far.

Judgement of the Court:

(Refer ¶5)

• The writ petition was dismissed.

• Petitioner was granted liberty to raise all contentions in case of adverse adjudication order in future.

Between Fine Lines (Simplified Summary):

• A single show cause notice for multiple years is not illegal by itself.

• The Court won’t interfere unless there’s actual denial of opportunity, not just apprehension.

• Ongoing adjudication and granted cross-examination were deemed sufficient.

• Petitioner can appeal after final order if aggrieved.

• Procedural fairness should be raised before appellate authority, not in writ prematurely.

Summary of Referred Cases:

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