Time barred order, Goods and Services Tax - GST

[CA Adarsh]

Hello everyone,

whether demand order DRC-07 is not served up to 30-04-2024 through post or email or portal to tax payer but demand order is dated 29-04-2024 is received on 09-05-2024

is above order is time barred? Any case laws

Posts / Replies

[KASTURI SETHI]

Pl. elaborate your query. It is too short to reply. No use of posting reply without full facts.

[Bishan Shah]

Assuming Order issued under section 73 of the CGST Act, 2017 for the period 2018-19; If uploaded on Portal before 30th April, 2024; then not time barred.

[PRAVEEN SHARMA]

If the DRC-07 demand order dated 29-04-2024 was not served (through post, email, or portal) until 09-05-2024, the determination of whether it is time-barred would depend on the interpretation of the relevant statutory provisions regarding the timing of service versus issuance. The CGST Act and Rules do not explicitly define a time limit for the service of the order after its issuance. Therefore, the order being received by the taxpayer on 09-05-2024 does not automatically render it time-barred unless specific provisions or judicial precedents dictate otherwise.

[CA Adarsh]

Details of Case:-

As per Scanned signed order received on Email on 09-05-2024 by tax payer under section 73(9) is dated as 29-04-2024 in scanned signed order but same was not received on tax payer by post or hand delivery or uploaded on Portal till 30-04-2024.

And as per Instruction No. 04/2023, dated November 23, 2023 states that order should be uploaded on portal.

Based on above facts whether order is time barred order?

[KASTURI SETHI]

Not time barred. As per Section 169  (1) of CGST Act, order can be served by any one of the methods mentioned therein. A rule or circular cannot override a Section. 

[Amit Agrawal]

Based on the query, I am presuming that material period under dispute is FY 2018-19.

A. 'Date of Order' & 'Date of Issuance Order' are two different things and both dates can be either same date or different dates. First, 'issues under dispute' are to be adjudicated / determined (i.e. date of order) and then, same is issued for serving to the tax-payer. Please see wordings of Section 73(9) to understand this better.

B. If order is digitally signed, please check the date of signature put.

C. If email is received from email-id address of same authority (i.e. original adjudicating authority who passed the order), then, 'Date of Issuance Order' is 09.05.2024 & not 29.04.2024. Hence, such order has no legal validity in view of Section 73(10) read with the extension granted vide various notifications from time to time for FY 2018-19.

D. Please check whether original adjudicating authority has mentioned 'Date of Issuance of Order' in the OIO & method of serving the same.

E. For issuance of order through email, generally speaking, date of email (i.e. 09.05.2024) should be date of issuance of order. Only argument here for Revenue, so as to try & justify its conduct, can be that original adjudicating authority had issued order on or before 30.04.2024 and asked his sub-ordinate officer to serve 'the order so issued' to the tax-payer under any mode prescribed u/s 169. But, burden to prove the same lies on Dept. and not on the tax-payer. This is more so as one need not taken 9 days to serve an order through email which is issued on or before 30.04.2024. Apparently, it seems that Dept. mischievously tried to overcome time-limits u/s 73(10) and hence, it is on them to prove bona fides of their conduct.

For this post, I have ignored the question of law i.e. whether 'issuance of order' u/s 73(10) means 'serving such order u/s 169 on the tax-payer', more specifically when mode of communication is vie email / electronically / on gst portal.

I have also ignored the the question of law i.e. whether last extension granted in time-limit to issue order u/s 73(10) vide notification for FY 2018-19 is legally valid or not.

I have also ignored the the question of relating to validity or otherwise of Instruction No. 04/2023, dated November 23, 2023 & implication of those instructions.

However, all above aspects must also be considered & all necessary arguments must be raised while defending tax-payer against subject order on the issue of time-limitations u/s 73(10).

These are ex facie views of mine and the same should not be construed as professional advice/suggestion.

[Amit Agrawal]

Summarizing above post of mine:

Burden to prove that subject order was actually issued on or before 30.04.2024 u/s 73(10) lies with Department and not on the tax-payer. Mere communicating 'Order dated 29.04.2024' vide email on 09.04.2024 to the tax-payer does not prove that such order was indeed issued on or before 30.04.2024. 

These are ex facie views of mine and the same should not be construed as professional advice/suggestion.

[Amit Agrawal]

As explained in my first post above, for that post, I had ignored the question of law i.e. whether 'issuance of order' u/s 73(10) means 'serving such order u/s 169 on the tax-payer', more specifically when mode of communication is vie email / electronically / on gst portal.

Now, let me address this question in my current post:

1. As per Section 73(10), order needs to be 'issued' within prescribed time limit. Here, the word 'issue' cannot mean anything other than 'issue to the person chargeable to tax' specially when read with sub-section (1), (2), (3) (7), (9) of Section 73.

2. 'Date of Order' & 'Date of Issuance Order' are two different things and both dates can be either same date or different dates. First, 'issues under dispute' are to be adjudicated / determined (i.e. date of order) and then, same is issued for serving to the tax-payer. Please see wordings of Section 73(9) to understand this better. 'Date of Order' is 'Date of Determination of liability u/s 73(10)' which needs to be communicated / served upon to the tax-payer through issuance of order. 

3. In other words, IMHO, 'issue of order' u/s 73(10) is nothing but 'start of process of serving / communicating the order to the person chargeable to tax'.

4. It is true that there can be difference in time between 'Date of Issue of Order' and 'Date of Serving of Order' (For example, while serving order through registered post as allowed u/s Section 169(1)(b) read with 169(3)), but such order must be 'issued' within prescribed time-limits u/s 73(10)) to avoid implications u/s 75(10).

5. Difference of time taken for delivery / serving the order cannot be an excuse for Department to justify 'Prior Date of Order' as 'Date of Issuance of such Order' when 'start of process of serving / communicating such order' (i.e. date of issuance of order) is also the date of serving the such order (i.e. when communication of order takes place through email, GST portal etc.). In such cases, date of issue of the order is nothing but the date when such order was communicated to the tax-payer through email, GST portal etc.

6. While issuing the order through registered post / speed post courier with acknowledgement, order will be said to be issued only when same is handed over to the postal dept. / courier agency for delivery to the person chargeable to tax and NOT before. When such order is handed over to the postal dept. / courier agency for delivery to the the person chargeable to tax on or before time-limit prescribed u/s 73(10), same fulfills requirements of Section 73(10) even when such order gets delivered / served upon tax-payer by the postal dept. / courier agency after time-limits prescribed u/s 73(10). 

7. Hence, IMHO, even if Department takes the argument that 'original adjudicating authority had issued order on or before 30.04.2024 and asked his sub-ordinate officer to serve 'the order so issued' to the tax-payer under any mode prescribed u/s 169 and such sub-ordinate officer served the same on the tax-payer vide email dated 09.05.2024', such argument/s are legally untenable in my view. Such order dated 29.04.2024 will be treated as 'issued' only on 09.05.2024 IMHO. 

8. In view of the above, I hold a view that subject order (presumably confirming demand/s) is patently time-barred being issued after time-limit prescribed u/s 73(10) read with Section 75(10). 

These are ex facie views of mine and the same should not be construed as professional advice/suggestion.

[KASTURI SETHI]

The Adjudication Order is not time barred. There is internal administrative mechanism based on the Adjudication Manual.  After the conducting /completing personal hearing and after following the proper  procedure, the Adjudication Authority issues the order on  the relevant file. Thereafter, the  Adjudication Branch does it job.