Case Details: Rainbow Greeners vs. State of Maharashtra (2026) 40 Centax 338 (Bom.)
Judiciary and Counsel Details
- Anil L. Pansare & Nivedita P. Mehta, JJ.
- Shri R. D. Heda, Adv., for the Petitioner.
- Shri K. R. Lule, AGP & Mrs K. Jaltare, Adv., for the Respondent.
Facts of the Case
The petitioner challenged the show cause notice issued under Section 74 of the CGST Act by the Deputy Commissioner, CGST, Nagpur, covering multiple financial years on the allegation of suppression of taxable value and consequential short payment of tax. It was contended that the impugned notice was vitiated as it consolidated different financial years in a single proceeding, which was impermissible under the statutory scheme governing Section 74 of the CGST Act. The petitioner relied upon the decision of the Division Bench of the Bombay High Court in Milroc Good Earth Developers v. Union of India (2025) 36 Centax 97 (Bom.) = 2025 (104) G.S.T.L. 45 (Bom.), wherein it was held that there is no scope for issuing consolidated show cause notices covering multiple financial years or tax periods. It was further submitted that the said view was reiterated in Rite Water Solutions (India) Ltd. v. Joint Commissioner, CGST & Central Excise, (2026) 39 Centax 399 (Bom.) thereby affirming the year-wise structure of assessment and limitation under the Act. The authorities, however, contended that clubbing of multiple financial years in a single notice is permissible in cases involving allegations of fraudulent ITC availment and relied upon the judgment of the Delhi High Court in Mathur Polymers v. Union of India. It was also contended that the said view had attained finality upon dismissal of the Special Leave Petition by the Supreme Court. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that since it had, subsequent to the decision of the Delhi High Court, taken a different view in Milroc Good Earth Developers and Rite Water Solutions (India) Ltd. (supra), the authorities below would be bound by the subsequent judgments. It was observed that the Hon’ble Supreme Court had neither stayed nor overruled the view taken in the aforesaid two decisions and, therefore, the argument of the department could not be accepted. The Court further noted that a submission was made that a proposal to challenge the said judgments was under consideration and they were likely to be carried before the Hon’ble Supreme Court. It was observed that in such a situation, liberty could be granted to the department to revive the proceedings if the said judgments were set aside. Accordingly, the petition was partly allowed and the impugned show cause notice was quashed and set aside, with liberty to the department to re-issue notice strictly in terms of Section 74 of the CGST Act if otherwise permissible in law.
List of Cases Cited
- CIT v. Godavaridevi Saraf — 1978 (2) E.L.T. 624 (Bom) — Referred [Para 10]
- Mathur Polymers v. Union of India — (2025) 35 Centax 150 (Del.) = 2025 (103) G.S.T.L. 72 (Del.) — Distinguished [Paras 6, 7, 8, 9, 11]
- Mathur Polymers v. Union of India — (2026) 38 Centax 135 (S.C.) — Referred [Paras 7, 8, 11]
- Milroc Good Earth Developers v. Union of India — (2025) 36 Centax 97 (Bom.) = 2025 (104) G.S.T.L. 45 (Bom.) — Followed [Paras 3, 9, 12, 13, 14]
- Rite Water Solutions (India) Ltd. v. Joint Commissioner — (2026) 39 Centax 399 (Bom.) — Followed [Paras 5, 9, 12, 13, 14]
