The Hon’ble Supreme Court in the case of Mathur Polymers v. Union of India & Ors. [SLP (Civil) Diary No. 50279/2025, order dated November 07, 2025] upheld the Delhi High Court judgment [W.P.(C) 2394/2025 & CM APPL. 11289/2025, order dated August 26, 2025] which held that consolidated Show Cause Notices (SCN) covering multiple financial years are permissible in cases of fraudulent Input Tax Credit (ITC) availment, and service of notice on the registered email address constitutes valid service under Section 169(1)(c) of the CGST Act.
Facts:
M/s Mathur Polymers (“the Petitioner”), a proprietary, challenged an Order-in-Original dated February 02, 2025, passed by the CGST Department, confirming a tax demand of Rs. 81,54,990 for alleged fraudulent availment of ITC.
Union of India & Ors. (“the Respondent”) had issued notices for personal hearing to the Petitioner’s registered email address and subsequently passed the impugned order based on a consolidated investigation covering multiple financial years.
The Petitioner contended that they did not receive the personal hearing notices as they were sent to their Chartered Accountant’s email address, not directly to them. They further argued that a combined SCN and order for multiple financial years is impermissible under Section 74 of the CGST Act.
The Respondent contended that the notices were validly served on the email address registered on the GST portal, which was listed as the proprietor’s email, not merely a practitioner’s. They argued that consolidated notices are permissible for fraud cases involving complex transactions spread over several years.
The Petitioner’s grievance was the alleged violation of principles of natural justice due to non-receipt of hearing notices and the lack of jurisdiction in issuing a consolidated order for multiple years. They approached the High Court via a writ petition which was dismissed with costs. They subsequently filed a Special Leave Petition (SLP) before the Supreme Court.
Issues:
- Whether service of notice on the email address provided at the time of registration constitutes valid service under Section 169(1)(c) of the CGST Act?
- Whether a consolidated Show Cause Notice and order covering multiple financial years is permissible under Section 74 of the CGST Act, particularly in cases of fraudulent ITC availment?
Held:
The Hon’ble Supreme Court held as under:
- Held that, there was no good ground and reason to interfere with the impugned judgment/order passed by the High Court.
- Dismissed the SLP and upheld the Delhi High Court’s judgment.
The Hon’ble Delhi High Court held as under:
- Observed that, the email address was registered on the GST portal as the email of the proprietor, and the ‘Authorized Signatory’ section mentioned ‘NA’ for GST practitioner details. Therefore, the email was presumed to be the proprietor’s registered email.
- Noted that, under Section 169(1)(c) of the CGST Act, communication sent to the email address provided at the time of registration constitutes adequate service.
- Observed that, Sections 74(3) and 74(4) of the CGST Act use the terms “for any period” and “for such periods” as opposed to “financial year,” indicating legislative intent to allow notices covering periods longer than a single financial year.
- Held that, in cases of fraudulent ITC availment involving complex transactions spread across several years, a consolidated notice is not only permissible but may be required to establish the “illegal modality” and “consistent pattern” of fraud.
- Noted that, the Petitioner concealed material facts regarding the receipt of emails on their registered address and dismissed the petition with costs of Rs. 50,000.
Our Comments:
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 in M/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.”
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