The Bombay High Court on Friday set aside a composite show cause notice spanning five financial years, issued to ICAD School of Learning Private Limited, a JEE and NEET coaching centre that offers hostel and mess facilities.
On 6 February 2026, a Bench of Justice Anil L. Pansare and Justice Nivedita P. Mehta emphasised that consolidation defeats the statutory scheme of assessment and recovery for distinct financial years.
Taking note of the GST framework, which mandates filing of returns with liability tied to each financial year, the Court asserted:
“I] The GST scheme is based on annual returns for each financial year (even if returns are filed monthly in practice, the liability is tied to a specific financial year) …
III] If a single SCN is issued covering multiple years, you would be aggregating different tax periods with different due dates and different limitation periods, which the statute does not permit.”
A show cause notice alleged that the commercial training services provided by ICAD, along with hostel and mess facilities, were taxable. The notice spanned five financial years and culminated in an order dated 30 December 2025 by the Additional Commissioner, CGST, Nagpur, demanding over Rs. 6 crores for alleged short payment of CGST and ineligible Input Tax Credit claims.
ICAD contended that clubbing multiple tax periods while issuing a notice under Section 74 of the CGST Act was impermissible. It relied on the Goa Bench decision in Milroc Good Earth Developers and a Division Bench ruling of the Bombay High Court in Rite Water Solutions (India), both of which held that consolidation of tax periods is not permissible.
The Revenue, however, relied on the Delhi High Court's decision in Mathur Polymers, against which a Special Leave Petition has been dismissed by the Supreme Court.
Distinguishing Mathur Polymers, the Bombay High Court highlighted that Sections 73(10) and 74(10) of the CGST Act prescribe separate limitation periods of three years and five years respectively, operating year-wise.
“V] Time limits operate year by year. Section 73(10) and 74(10) of the CGST Act fix the time limit to issue an assessment order within three years (Section 73) or five years (Section 74) from the last date for filing the annual return for the year to which the tax dues relate.
VI] Consolidation would collapse these years, specific steps and grounds, harming the taxpayers' ability to respond year by year and violating the explicit year-wise structure of the statute. These niceties, in our view, were not considered by the Delhi High Court.”
The Court further examined the definition of “tax period” under Section 2(106) of the CGST Act and noted that the Supreme Court had dismissed the petition against Mathur Polymers in limine, without deciding on the merits. It clarified that, following the principles laid down in Godavaridevi Saraf, authorities in Maharashtra remain bound by Bombay High Court rulings unless the Supreme Court delivers a contrary decision.
Accordingly, the Court set aside the show cause notice and the demand order. It, however, granted liberty to the respondent authorities to re-issue the notice under Section 74 of the CGST Act without the consolidation of tax periods.
For Petitioner: Advocates Bharat Raichandani, Mahesh Raichandani, Sarang Malode
For Respondent: Addl GP S. S. Doifode with Advocate Ketki Jaltare-Vaidya