M/s EVM MOTORS AND VEHICLES INDIA PRIVATE LIMITED v. ASSISTANT DIRECTOR

Introduction

This judgment of the Kerala High Court reiterates the settled legal principle that a composite Show Cause Notice (SCN) covering multiple assessment years under the GST Act is legally impermissible. Following the binding Division Bench decisions in Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories and Tharayil Medicals (M/s.) v. Deputy Commissioner, the Court held that every financial year is a separate assessment unit requiring independent adjudication.

The Court observed that the issuance of a single Show Cause Notice for multiple financial years is contrary to the statutory scheme of the GST law. Consequently, the Court quashed the composite Show Cause Notice while granting liberty to the Revenue to issue fresh, separate notices for each assessment year. To balance the interests of the Revenue, it also directed that the period spent in the defective proceedings shall be excluded while computing the limitation period for initiating fresh proceedings.