ESL Steel Limited and another Vs Union of India
Date: December 10, 2025
Subject Matter
Show-Cause Notice for Multiple Financial Years Deemed Impermissible; High Court Stays Operation
Summary
The High Court stayed the operation of an impugned show-cause notice dated 1st September, 2025. This interim relief was granted based on the premise that a single show-cause notice covering multiple financial years is impermissible in law, aligning with a prior ruling by the Karnataka High Court on an identical legal issue.
Summary of Facts and Dispute:
- Impugned Action: The issuance of a show-cause notice bearing File No.ZD210825032263R, dated 1st September, 2025, by the authorities, which covers multiple financial years.
- Petitioner's Argument: The petitioners challenged the notice, contending that a single show-cause notice that encompasses multiple financial years is impermissible in law and therefore unconstitutional.
- Core Question of Law: Whether a single show-cause notice can legally cover multiple tax periods or financial years under the GST Act.
Key Legal Issues & Findings:
Validity of a Single Show-Cause Notice for Multiple Financial Years
The Court considered the precedent regarding the validity of a single show-cause notice for multiple tax periods.
- Precedent from Karnataka High Court: The Single Bench of the High Court of Karnataka, in Veremax Technologie Services Ltd. Vs. Assistant Commissioner of Central Tax (Writ Petition No.15810 of 2024, decided on 4th September, 2024), held that one show-cause notice for multiple tax periods is not permissible and consequently quashed it.
- Consistency with Other Petitions: The Court noted that a spate of similar writ petitions raising identical legal issues have been filed and admitted by this Court, indicating a consistent stance on this point.
Ruling:
- Outcome: The operation of the impugned show-cause notice bearing File No.ZD210825032263R, dated 1st September, 2025, is stayed until the next date of hearing.
- Directions: The State CT & GST Authorities have been added as party-opposite parties. The opposite parties are directed to file their counter affidavit within two weeks, and the petitioners may file a rejoinder within one week thereafter. The matter is listed along with W.P.(C) No.27979 of 2024 on 15th January, 2026.
- Liberty: The matter remains pending for further consideration on the constitutional challenge to certain provisions of the GST Act and the legality of the impugned notice itself.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
1. Leave is granted to the petitioners to add the State CT & GST Authorities as party-opposite parties in the instant writ petition. A copy of the writ petition shall be served upon Mr. Sunil Mishra, learned Standing Counsel, who appears for the State CT & GST Department in course of the day.
2. Since Mr. P.K. Parhi, learned Deputy Solicitor General of India along with Mr. Satya Narayan Pattanaik, learned Central Government Counsel appears and waives service of notice on behalf of opposite party no.1, Mr. Debashis Tripathy, learned Additional Government Advocate appears and waives service of notice on behalf of opposite party nos.2 and 4, Mr. Avinash Kedia, learned Junior Standing Counsel appears and waives service of notice on behalf of the opposite party nos.3 and 5, learned counsel for the petitioners is directed to serve adequate number of copies of the writ petition on them in course of the day.
3. We find that certain provisions of the GST Act are challenged in the instant writ petition being unconstitutional and contrary to the settled principles of law as recognized in the Indian Legal Parlance. Apart from the aforesaid relief, the challenge is also founded upon the notice dated 1st September, 2025 on the premises that it covers multiple financial years which is impermissible in law. The aforesaid point came up before the High Court of Karnataka in Writ Petition No.15810 of 2024, decided on 4th September, 2024 (Veremax Technologie Services Ltd. Vs. Assistant Commissioner of Central Tax), wherein the Single Bench was of the view that one show-cause notice for multiple tax periods are not permissible and quashed the same.
4. The spate of writ petitions have been filed before this Court taking the same plea and have been admitted by this Court by granting liberty to the authorities to file their affidavit. One of such writ petitions being W.P.(C) No.27979 of 2024 is pending before this Court, where the identical legal issues are involved.
5. List this matter along with W.P.(C) No.27979 of 2024 on 15th January, 2026. Consolidated cause title of the writ petition be filed within a week from date. Counter affidavit be filed within two weeks from date and Rejoinder be filed within one week thereafter.
6. There shall be stay of operation of the impugned show-cause notice bearing File No.ZD210825032263R, dated 1st September, 2025 vide Annexure-P-1 till the next date.