SC affirms Issuance of a consolidated SCN covering multiple financial years, especially in cases involving patterns of fraudulent transactions

The Hon'ble Supreme Court in the case of Mathur Polymers v. Union of India & Ors. [Special Leave Petition (Civil) Diary No. 50279/2025, order dated November 07, 2025] declined to interfere with the Delhi High Court's view that the issuance of a consolidated show cause notice (SCN) covering multiple financial years is permissible, especially in cases involving patterns of fraudulent transactions.

Facts:

Mathur Polymers ("the Petitioner") challenged the legality of the Order-in-Original dated February 2, 2025, issued by the CGST Department ("the Respondent") under the CGST Act, raising demands regarding fraudulent availment of input tax credit (ITC). The principal ground was that the Petitioner was never served with personal hearing notices, and therefore, there was a violation of principles of natural justice.

The Respondent contended that service was effected by sending emails containing notice of hearings to the registered email address shown on the GST portal, which was linked to the Petitioner but reflected the email address of a GST Practitioner/Chartered Accountant.

The Petitioner further submitted that consolidated SCNs and orders covering several financial years were impermissible. The Respondent contended that consolidation is permissible, especially in cases concerning fraudulent ITC claims spreading across financial years and involving analysis of patterns of transactions.

Aggrieved by the Order-in-Original and the manner of service, the Petitioner moved the Delhi High Court by way of a SLP, challenging both the sufficiency of notice and procedural regularity.

Issue:

Whether service of GST notices by email to the registered address of a GST Practitioner/Chartered Accountant (as per GST portal records) is valid communication under Section 169(1)(c) of the CGST Act, 2017?

Whether a consolidated show cause notice covering multiple financial years is legally permissible in cases involving fraudulent transactions?

Held:

The Hon'ble Supreme Court in Special Leave Petition (Civil) Diary No. 50279/2025 held as under:

· Observed that, the Delhi High Court had found that emails sent to the registered address on the GST Portal constitute sufficient service under Section 169(1)(c) of the CGST Act, 2017, even if the address is of a GST Practitioner/Chartered Accountant, so long as it is reflected as the registered email for the assessee.​

· Noted that, the records established the Petitioner's GST Portal profile identified Suman Mathur as the proprietor and listed the disputed email address as the registered one, with the 'authorised signatory' field set to 'NA'.

· Found that, there was no violation of principles of natural justice as proper notice had been issued and received.

· Noted that, the writ petition failed to reveal material facts about email service, and relevant information was withheld from the Court.

· Held that, reliance cannot be placed on cases under the Income Tax Act concerning service on consultants or CAs, emphasizing the statutory difference of language with the CGST Act and the Income Tax Act.

· Observed that, the argument against consolidated SCNs and orders was not tenable in fraud cases and that transactions over several years require consolidated action by authorities.

· Affirmed the Delhi High Court's analysis in Ambika Traders v. Addl. Commissioner, [W.P.(C) 4853/2025 order dated July 29, 2025] based on Section 74, Section 73, and relevant legislative history, holding that consolidated SCNs for multiple years are legally permissible to establish fraudulent patterns of ITC.

· Dismissed Special Leave Petition against the High Court judgment and the order for costs.

Our Comments:

The Supreme Court's decision draws directly from the Delhi High Court's finding and statutory reading of Section 169(1)(c) CGST Act. Further the Delhi High Court's decision in this case reinforces the permissibility of consolidated Show Cause Notices (SCNs) under the CGST Act for cases involving fraudulent Input Tax Credit (ITC), aligning with the legislative intent to uncover patterns of fraud across multiple financial years. The Court's reliance in Ambika Traders v. Addl. Commissioner, [W.P.(C) 4853/2025 order dated July 29, 2025] which had interpreted the language of Sections 74(3) and 74(4), which use "for any period" and "for such periods" rather than "financial year," provides clarity that the CGST Act accommodates such notices when fraud spans multiple years. This interpretation is consistent with the Delhi High Court's ruling in M/s Vallabh Textile Through Its Authorized Representative v. Additional/Joint Commissioner, CGST Delhi East Commiserate & Ors. [W.P.(C) 13855/2024] ,which held that consolidated SCNs are permissible to establish the illegal modalities of fraudulent transactions, and the Calcutta High Court's decision in Britannia Industries Limited vs Union of India & Ors [2024 TAXSCAN (HC) 2554], which also found no specific bar in the CGST Act against issuing consolidated SCNs for multiple years.

However, this stance diverges from the Karnataka High Court's ruling in Veremax Technology Services Pvt. Ltd. [W.P. No. 15810 of 2024 (T-RES)], which held that consolidated SCNs for multiple financial years are impermissible under Section 74(10) read with Sections 74(2) and 74(3) of the CGST Act and Rule 142 of the CGST Rules, 2017. The Hon'ble Madras High Court in the case of Smt. R. Ashaarajaa v. Senior Intelligence Officer [W.P. Nos. 29716, 29720, 29726 & 34137 of 2024, order dated July 21, 2025] held that clubbing several financial years in a single show cause notice or assessment order under the GST Act is impermissible, as it violates statutory requirements for separate notices per tax period, prejudices taxpayer rights, and runs counter to limitation periods fixed for each year. ​Similarly, the Kerala High Court inM/S. Lakshmi Mobile Accessories V. Joint Commissioner (Intelligence & Enforcement) [2025:Ker:30647] also held that consolidation of SCN for multiple years, violates the temporal limits set by Section 74(10) and Rule 142, which governs the issuance of SCNs and demand notices.

Relevant Provisions:

Section 169(1)(c), CGST Act, 2017:

"169. Service of notice in certain circumstances.-

(1) Any decision, order, summons, notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:-

(a) by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or

(b) by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or

(c) by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or

(d) by making it available on the common portal; or

(e) by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or

(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice."

Section 74(10), CGST Act, 2017:

"74. Determination of tax pertaining to the period up to Financial Year 2023-24, not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any willful- misstatement or suppression of facts.-

(10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund."

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED