GST Show Cause Notice for Multiple Financial Years: Can One SCN Cover Several Years?

Direct answer: A single GST show cause notice covering several financial years is now a serious jurisdictional issue, not a settled drafting convenience. The Bombay High Court has held that separate financial years cannot be clubbed in one Section 74 notice because the GST statute applies year-specific tax periods and limitation. The Delhi High Court has taken a different view in some cases, especially where an alleged fraudulent ITC pattern spans several years. Until the Supreme Court settles the conflict, taxpayers should test every multi-year notice for jurisdiction, limitation, prejudice and the exact statutory period involved.

Why this issue matters in 2026

Multi-year GST investigations are common in DGGI and departmental proceedings. The practical problem arises when one notice combines tax periods that have different annual-return dates, limitation cut-offs, factual records and defences. A consolidated notice may make reconciliation easier for the department, but it can materially affect a taxpayer’s ability to answer each financial year independently.

The issue is especially important now because Sections 73 and 74 govern determinations pertaining up to FY 2023-24, while Section 74A governs FY 2024-25 onward. This statutory transition makes correct period-mapping essential before a reply is filed.

The statutory framework: Sections 73, 74 and 74A

Periods up to FY 2023-24

Section 73 applies to non-fraud cases and Section 74 applies where fraud, wilful misstatement or suppression is alleged, for periods up to FY 2023-24. Their limitation architecture is tied to the financial year and the due date of the annual return for that year. That year-specific structure is central to the Bombay High Court line of cases.

FY 2024-25 onward

Section 74A now governs determination of tax not paid or short paid, erroneous refunds and wrongly availed or utilised ITC for FY 2024-25 onward. It creates a common demand framework while retaining differentiated penalty consequences depending on whether fraud, wilful misstatement or suppression is involved. A 2026 notice must therefore be tested against the correct section for the financial year concerned.

Bombay High Court: multiple financial years should not be clubbed

In M/s Milroc Good Earth Developers v. Union of India, decided on 9 October 2025, the Bombay High Court at Goa held that the statutory scheme leaves no scope for consolidating different financial years or tax periods in one Section 74 show cause notice. The Court emphasised that liability, annual returns and limitation operate by reference to the relevant financial year.

That reasoning was followed by the Nagpur Bench in M/s M G Wadhwani v. Union of India on 13 February 2026. The impugned Section 74 notice covered July 2017 to January 2024. The Court quashed the composite notice, while allowing the department to re-issue a notice strictly in accordance with law if otherwise permissible.

Delhi High Court: consolidated notices may be permissible in some cases

The Delhi High Court has taken a different approach. In Mathur Polymers, it observed that where fraudulent ITC availment is alleged to follow a common modus operandi across several years, a consolidated notice may be needed to present the complete alleged scheme. The Bombay High Court in M G Wadhwani expressly considered that contrary view but declined to follow it within its jurisdiction.

This means the legal position is presently jurisdiction-sensitive. A business should not assume that every multi-year SCN is automatically void, nor should it assume that clubbing is automatically valid. The nature of the allegation, the High Court having territorial jurisdiction, the years covered and any subsequent Supreme Court development all matter.

What should a taxpayer check immediately?

1. List every tax period and financial year covered by the notice. 2. Map each year to Section 73, 74 or 74A. 3. Compute limitation independently for each year. 4. Separate fraud/suppression allegations from ordinary reconciliation differences. 5. Identify whether the notice relies on one common transaction pattern or unrelated year-specific issues. 6. Check whether clubbing prevents a meaningful year-wise reply. 7. Preserve objections to jurisdiction before dealing with the merits. 8. Reconcile the demanded figures separately with GSTR-1, GSTR-3B, GSTR-2B, e-invoice data, ledgers and annual returns.

Worked example

Assume a GST notice issued in 2026 covers FY 2019-20, 2020-21, 2021-22 and 2022-23 in one demand. The first review should not begin with the total demand. Break the notice into four annual schedules, calculate the limitation position separately, identify the statutory provision invoked for each year, and test whether the factual allegations are genuinely common. If the business falls within Bombay High Court jurisdiction, the Milroc/M G Wadhwani line becomes a significant threshold objection. If another High Court’s contrary precedent governs, the strategy may differ.

Does Section 74A solve the multi-year SCN controversy?

Not automatically. Section 74A changes the demand framework for FY 2024-25 onward, but professionals should still examine the exact wording of the notice, the periods clubbed, statutory time limits, procedural fairness and applicable judicial precedent. A new common demand provision should not be treated as a blanket answer to every jurisdictional objection.

Practical response strategy for CFOs and tax teams

Build the defence year by year even when the department has not. Create a financial-year matrix showing turnover, tax declared, ITC availed, disputed amount, principal evidence, limitation date and response position. This makes it easier to isolate a time-barred period, a purely reconciliation-driven difference, or a fraud allegation unsupported by year-specific facts.

Where a writ-jurisdiction challenge is being considered, the decision should be taken early. Filing a detailed merits reply without reserving threshold objections can complicate litigation strategy. At the same time, businesses should not ignore the notice while pursuing a jurisdictional point; evidence and reconciliations should be prepared in parallel.

Frequently asked questions

Can GST authorities issue one SCN for several financial years?

There is conflicting High Court authority. Bombay High Court decisions have rejected such clubbing under Section 74, while Delhi High Court decisions have recognised consolidated proceedings in certain fact patterns. The answer depends on jurisdiction, allegations, years covered and later appellate developments.

Does dismissal of an SLP always make a High Court ruling binding nationwide?

No. A summary dismissal without a reasoned merits ruling does not necessarily create a nationwide declaration of law on the underlying issue. The precise Supreme Court order must be examined before drawing that conclusion.

Which demand section applies from FY 2024-25?

Section 74A applies to determination of tax, erroneous refunds and wrongly availed or utilised ITC pertaining to FY 2024-25 onward. Sections 73 and 74 now expressly relate to periods up to FY 2023-24.

Key takeaway

A multi-year GST notice should never be answered only as one aggregate demand. The highest-value first step is a year-wise jurisdiction and limitation review before the substantive reconciliation begins. With High Courts presently taking different approaches, preserving the correct legal objection can be as important as reconciling the tax computation itself.

Primary references

Central Goods and Services Tax Act, 2017 — India Code: https://www.indiacode.nic.in/handle/123456789/12697

Bombay High Court, M/s Milroc Good Earth Developers v. Union of India, W.P. No. 2203/2025, 9 October 2025: https://bombayhighcourt.nic.in/

Bombay High Court, M/s M G Wadhwani v. Union of India, W.P. No. 3902/2025, 13 February 2026.

How PGT & Associates can help

PGT & Associates assists businesses with GST show cause notices, DRC proceedings, year-wise reconciliations, limitation analysis and litigation support before the appropriate appellate or constitutional forum. For a multi-year demand, the review should ideally begin before the first substantive reply is finalised.

Disclaimer: This article is for general professional information only and does not constitute legal or tax advice. Judicial positions can differ by jurisdiction and may change through later appellate decisions. Obtain advice on the specific notice, facts and applicable limitation period before acting.