Composite Multi-Year SCN Under Section 74 Quashed — Bombay HC Follows Milroc and Rite Water, Declines to Follow Delhi HC's Mathur Polymers, Notes Larger Bench Reference Pending

The Bombay High Court has quashed a show cause notice issued under Section 73 of the CGST Act covering financial years 2019-20 to 2021-22 in a single notice, reiterating its settled position in M/s Milroc Good Earth Developers v. Union of India (WP No. 2203/2025, Goa Bench, decided 09.10.2025) and Rite Water Solutions (India) Ltd. v. Joint Commissioner (WP No. 466/2025, decided 28.11.2025) that there is no scope under the statutory scheme for consolidating various financial years or tax periods in a single SCN. The ruling, by Justice Anil L. Pansare and Justice Nivedita P. Mehta in WP No. 2978/2026 (Ganesh Valmik Bawane, decided 11.09.2026), squarely addressed and declined to follow the contrary view of the Delhi High Court in Mathur Polymers (W.P.(C) 2394/2025, decided 26.08.2025).

The Revenue relied on the Delhi HC's view in Mathur Polymers that in cases involving fraudulent ITC availed across several years, a consolidated notice may be required to establish the illegal modality, and submitted that the SLP against Mathur Polymers was dismissed by the Supreme Court, giving the decision finality. The Bombay HC rejected this argument on two grounds: first, the Supreme Court had dismissed the SLP in limine and not on merits, and therefore the concept of merger of judgment did not apply; second, the Bombay HC had subsequently taken a different view in Milroc Good Earth Developers and Rite Water Solutions with detailed reasoning — including that the GST scheme is based on annual returns, limitation runs separately for each financial year under Sections 73(10) and 74(10), and consolidation would collapse year-specific limitation periods, harming the taxpayer's ability to respond year-by-year. The court noted that these niceties were not considered by the Delhi HC.

The court further noted that SLPs against the Milroc and Rite Water judgments are pending before the Supreme Court (SLP Diary Nos. 22424/2026 and 24615/2026) and that the issue of clubbing has been referred to a Larger Bench of the Bombay HC in Writ Petition No. 16848/2025 (M/s Rollmet LLP). The petition was partly allowed, the composite SCN was quashed, and the respondents were given liberty to reissue year-wise notices strictly in terms of the Act, with a further liberty to revive the petition if the Bombay HC judgments are set aside by the Supreme Court or the Larger Bench takes a different view.

- 2026-juristway.com-2487-HC(Bombay)-GST  |  High Court of Bombay  |  WP No. 2978/2026  |  11.09.2026