GST SCN Can Cover Multiple Financial Years Under Sections 73 & 74, Ambika Traders Applies Beyond Fraud: Delhi High Court
Kapil Dhyani
17 March 2026 9:58 PM IST
The Delhi High Court has held that show cause notices (SCNs) under the GST regime can cover multiple financial years, both under Sections 73 and 74 of the Central Goods and Services Tax Act, 2017.
A division bench of Justices Nitin Wasudeo Sambre and Ajay Digpaul clarified that its earlier ruling in Ambika Traders is not confined to cases involving fraudulent availment of input tax credit (ITC).
For context, the petitioner company, engaged in the supply/installation of CCTV surveillance systems, had argued that the SCN and the impugned order impermissibly consolidate multiple financial years into a single adjudicatory exercise, even though, according to the petitioner, the present matter does not concern fraudulent availment or utilisation of Input Tax Credit, but arises out of an interpretational dispute as to the nature of the supplies effected by it and the rate of tax applicable thereto.
It was contended that Ambika Traders' judgment, which held that a consolidated show cause notice for multiple years is permissible, was rendered in the context of allegations relating to fraudulent availment or utilisation of ITC extending across financial years. Whereas the present case, it was contended, does not involve fake invoices, circular trading, non-existent suppliers or clandestine credit chains, but raises a pure issue of classification and rate applicability.
Rejecting this submission, the court held that such a narrow interpretation of Ambika Traders is not acceptable.
In this regard, the Court referred to the following observations made in the judgment:
“...a notice can be issued for a period which could be more than one financial year. Similar isthe language even in section 73 of the CGST Act.”
The aforesaid extract, the Court said, “leaves no manner of doubt that this Court, in the said judgment, contemplated and accepted consolidation of SCNs covering multiple financial years under both Section 73 and Section 74 of the CGST Act.”
The petitioner had also relied on decisions of the Bombay High Court which had taken a different view in non-fraud cases. However, the Court held that it was bound by its own precedent in Ambika Traders.
On challenge to the GST demand, the Court declined to interfere in writ jurisdiction, noting that the petitioner had an efficacious alternative remedy by way of an appeal under Section 107 of the CGST Act.
As such, the writ petition was dismissed.
For Petitioner: Advocates Abhishek Rastogi, Pooja M Rastogi, Trishala Trivedi, Meenal Songire and Harsh Pandya
For Respondent: Advocates Anushree Narain, Yamit Jetley and Naman Choula for R-2 and R-3