Multi-Year SCNs Under Scrutiny: Supreme CourtConsolidates the Challenge Before Justice
Narasimha
A detailed analysis of the issue arising from JBN Impex Private Limited v. Additional Commissioner & Ors., SLP (C) No. 21345/2026, Order dated 17.07.2026
Sashthi Taxlegal Advisory Services LLP | Hosur • Bengaluru
- The Order in Brief
JBN Impex Private Limited carried the matter to the Supreme Court against the judgment of the Hon’ble High Court of Delhi dated 29.04.2026 in W.P. No. 5814/2026.
On 17.07.2026, a Bench comprising the Hon’ble Chief Justice, Hon’ble Mr. Justice Joymalya Bagchi and Hon’ble Mrs. Justice V. Mohana passed a short two-paragraph order:
* The present SLP, together with SLP (C) No. 60097/2025, SLP (C) No. 6232/2026 and all
connected matters, is to be tagged and listed before a Bench presided over by Hon’ble
Mr. Justice P.S. Narasimha; and
* Being the oldest matter in the group, SLP (C) No. 60097/2025 shall be the lead
matter.
Two things follow, and it is important that both are read correctly.
What the order does not do. It records no finding on merits, grants no interim protection, and does not stay any proceeding below. Nothing in it can be cited as approval or disapproval of either side’s case.
What the order does do. It signals that the Supreme Court proposes to decide the underlying question once, for an entire batch, through a designated Bench. Where a question of law recurs across High Courts with divergent outcomes, consolidation of this kind is ordinarily the precursor to an authoritative pronouncement. For a question that touches thousands of pending demands, that is not a small development.
2. The Underlying Question
The issue running through the batch is the legality of the consolidated show cause notice — a single notice, and often a single adjudication order, bunching demands across two or more financial years, typically issued under Section 73 or Section 74 of the CGST Act, 2017.
The practice became widespread once departmental audits and scrutiny under Sections 61,
65 and 66 began covering multiple years in one exercise. Rather than issue year-wise
notices, officers frequently issue one DRC-01 covering, say, FY 2017-18 to FY 2021-22, with
a consolidated tax, interest and penalty figure, or with a year-wise annexure but a single
operative demand.
The question is whether the CGST Act permits this.
3. The Statutory Architecture
The case against bunching does not rest on any express prohibition. It rests on the structure of the Act, which is built financial-year-wise from end to end.
(a) Limitation is year-specific. Section 73(10) requires the order to be passed within three years, and Section 74(10) within five years, from the due date for furnishing the annual return for the financial year to which the tax not paid or short paid relates. Section 73(2) and Section 74(2) work backwards from that outer date to fix the last date for the notice. Limitation therefore has a different start date and a different expiry date for every
single financial year in the demand. A consolidated notice necessarily collapses several distinct limitation periods into one date, and the taxpayer’s right to say “for FY 2017-18 the notice is time-barred, whatever the position for FY 2020-21” becomes difficult to assert and difficult for the adjudicating authority to answer.
(b) The return cycle is year-specific. Section 44 fixes the annual return for a financial year; Section 39 fixes monthly returns; the entire reconciliation exercise on which a demand is founded is a year-wise exercise. Section 16(4) and the relief in Section 16(5) are similarly year-referenced.
(c) The demand and recovery machinery is order-specific. Rule 142(1) of the CGST Rules requires the summary of the notice in FORM GST DRC-01 to accompany the notice; Rule 142(5) requires the summary of the order in FORM GST DRC-07. Section 75(7) bars the adjudicating authority from confirming a demand exceeding the amount specified in the notice or on grounds other than those specified in the notice — a discipline that becomes
blurred when heads and years are aggregated.
(d) The appellate route is order-specific. Section 107(1) contemplates an appeal against “any decision or order”. Section 107(6) fixes pre-deposit at 10% of the tax in dispute arising from the order, subject to the statutory ceiling. Where one order fuses five years, the taxpayer who wishes to contest only two of them is nonetheless confronted with a single order, a single appeal, and a computation of pre-deposit that may not track the years actually in dispute.
(e) Amnesty and settlement provisions are year-specific. Section 128A confers waiver of interest and penalty only for FY 2017-18, FY 2018-19 and FY 2019-20, and only for proceedings referable to Section 73. A consolidated notice that spans both covered and uncovered years — or that invokes Section 74 across the board — can operate to deny the taxpayer a benefit Parliament expressly conferred. This is, in practical terms, one of the sharpest edges of the dispute.
(f) The position from FY 2024-25. Section 74A, inserted by the Finance (No. 2) Act, 2024 with effect from 01.11.2024, provides a common limitation framework for periods from FY 2024-25 onwards. It merges the fraud and non-fraud streams, but it retains the yearreferenced structure: the notice period runs from the due date of the annual return for the financial year to which the demand relates. The bunching question therefore does not disappear under Section 74A; it re-presents itself in a slightly different statutory setting.
Whatever the Supreme Court holds is likely to inform the position under Section 74A as well, though the reasoning will need to be applied with care rather than transplanted.
4. The Revenue’s Side of the Argument
A balanced analysis must set out the contrary case, which is not without force:
* No express bar. Neither Section 73 nor Section 74 in terms requires one notice per financial year. Where the Act intends a year-wise act, it says so; the absence of such language in the notice provisions is said to be deliberate.
* The proceedings arise from a single investigation. Where the alleged suppression or wrongful availment is a continuing course of conduct spanning years, a single notice is said to reflect the reality of the case and to avoid multiplicity.
* Curable irregularity, not a jurisdictional defect. The Revenue’s position is generally that bunching is at highest a procedural irregularity, and that the notice cannot be struck down unless the taxpayer demonstrates actual prejudice — a defence that could not be taken, a limitation plea that could not be raised, a year-wise breakup that was withheld.
* Year-wise annexure cures the objection. Where the notice carries a year-wise computation and the order records year-wise findings, the Revenue contends that no substance is lost by the common covering notice.
* Efficiency and finality. Splitting a single investigation into five notices, five adjudications and five appeals is said to burden the taxpayer as much as the department.
The strength of this position varies enormously with the facts of the particular notice. A notice with a clean year-wise annexure, year-wise findings and year-wise quantification stands on very different ground from a notice that throws a lump-sum figure across five years with no ability to disaggregate.
5. Where the High Courts Stand
Several High Courts have ruled on bunched notices, and the outcomes have not been uniform — which is precisely why the batch has been consolidated. The specific decisions, and the High Court judgments from which SLP (C) No. 60097/2025 and SLP (C) No.6232/2026 arise, are to be inserted here after verification against the firm’s case-law repository. The propositions required are:
- Decisions holding a consolidated multi-year SCN under Section 73/74 to be impermissible on limitation and structural grounds.
- Decisions upholding a consolidated SCN, or treating the defect as curable absent demonstrated prejudice.
- Decisions on the related question of a consolidated adjudication order passed on separate year-wise notices.
- Decisions on the consequences — whether the notice is quashed in entirety, or only for the years that are time-barred, or remanded for fresh year-wise adjudication.
(This section is deliberately left for citation from the verified repository. No authority has been stated from recollection.)
6. What the Consolidation Means in Practice
No stay operates. Tagging is not a stay. Notices continue to be issued, adjudications continue to be completed, appeals continue to run. A taxpayer who waits for the Supreme Court before acting will lose the matter on limitation long before the batch is heard.
The lead matter governs. The reasoning in SLP (C) No. 60097/2025 will determine the outcome across the batch and, in the ordinary course, across all pending matters raising the same question.
The relief question is as important as the validity question. If bunching is held bad, the practical value of the ruling to any given taxpayer will turn on what consequence the Court attaches to it — quashing, severance of time-barred years, or remand for fresh year-wise adjudication with the limitation clock treated as saved. Taxpayers should not assume that a favourable ruling automatically extinguishes the demand.
7. Practical Guidance
- Take the objection, and take it first. The plea must appear in the reply to the DRC-01, be pressed at the personal hearing, and be carried as a distinct ground in the appeal memorandum. An objection to the form of a notice, not raised at the notice stage, invites the answer that the taxpayer participated without demur and suffered no prejudice.
- Plead prejudice, not merely irregularity. The stronger formulation is not “the notice covers five years” but “because the notice covers five years, the following defences were denied to me” — specify the year that was time-barred, the year eligible under Section 128A, the year for which the ground alleged does not exist, the pre-deposit computed on years not in dispute.
- Keep the limitation plea separate. For each year in the notice, compute the Section 73(10)/74(10) outer date independently and record it in the reply. This survives as an independent ground even if the bunching objection fails.
- Do not sacrifice the merits. A procedural objection is an addition to the substantive defence, never a substitute for it. Every year in the notice should be answered on merits as well.
- Protect Section 128A eligibility. Where a consolidated notice spans FY 2017-18 to FY 2019-20 along with later years, the eligibility of the covered years should be asserted separately and the record made clear, so that the benefit is not lost by aggregation.
- Watch the appeal clock. Section 107 limitation runs from communication of the order regardless of the pendency of the Supreme Court batch. Where the appeal period is running, file — the ground can be argued, and if necessary supplemented, later.
- Writ or appeal. A challenge to the notice itself at the threshold is a writ remedy and carries the usual alternate-remedy objection. Once the order is passed, the statutory appeal is ordinarily the correct route, with the bunching plea taken as a ground. The choice is factsensitive and should be taken on advice.
- Preserve the paper. Retain the DRC-01, the annexures, the reply, the hearing record and the DRC-07. Whether the notice carried a year-wise breakup is likely to be decisive in individual cases.
8. Conclusion
The Supreme Court has not yet said anything on the merits of the consolidated show cause notice. What it has done is arrange for the question to be answered authoritatively and in one place. For taxpayers carrying multi-year demands — and there are a great many — the correct response is not to wait, but to ensure that the objection is properly taken, properly particularised and properly preserved at every stage, so that the benefit of the eventual ruling is available when it comes.
An objection not taken in time is an objection lost.
We assist clients in framing replies to consolidated show cause notices and in appellate representation before the Appellate Authority and the GST Appellate Tribunal. For a review of a pending multi-year notice, please write to us.
Sashthi Taxlegal Advisory Services LLP Hosur • Bengaluru
This analysis is for general information only and does not constitute professional advice. Readers should obtain advice on the facts of their own case before acting on any part of it