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2025 (5) TMI 137 - HC - GSTExtension of the time limit under Section 73 - Violation of statutory provision - notice issued - non-compliance to sub-section (8) of Section 73 of C.G.S.T. Act 2017 (Act 2017) - time-barred under the limitation provisions of Section 73(9) and (10) of the CGST/BGST Act 2017 - principle of natural justice - HELD THAT - No doubt initially deadline was on or before 31.12.2021 and the same has been extended by virtue of circular dated 31.03.2023 (Annexure P/5). Therefore the State respondents have right to initiate proceedings for the assessment of the year 2017-18 till 31.12.2023. In this regard we have to take note of that the notice under Section 73 or Act 2017 has been issued on 25.09.2023. Therefore it is within the time limit. While issuing notice under Section 73(i) or Act 2017 read with rule 142(i) whether State respondents have given thirty days time to answer or not. In this regard it is evident from notice dated 29.09.2023 date for submission of reply has been given 05.10.2023 and so also for hearing on 05.10.2023. Thirty days lapses on 28.10.2023. Therefore issuance of notice dated 29.09.2023 is not in accordance with sub-section 8 of Section 73 of Act 2017. On this score the petitioner has made out a case. Accordingly the impugned actions dated 30.11.2023 are set aside. Matter is remanded to the concerned authority to issue a corrigendum to 29.09.2023 notice insofar as extending time limit for submission of reply and also date of hearing strictly in accordance with sub-section 8 of Section 73 or Act 2017. The above exercise shall be completed within a period of three months from the date of receipt of this order. Remaining contentions or reliefs sought by the petitioner are left open to be urged before the authorities or before this Court in future. Thus the present Writ Petition No. 14239 of 2024 stands allowed in part.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions addressed by the Court in this matter include:
2. ISSUE-WISE DETAILED ANALYSIS Limitation and validity of demand order under Section 73(9) & (10) CGST/BGST Act, 2017 The petitioner contended that the demand order dated 30.11.2023 for the period July 2017 to March 2018 is time-barred as the original limitation period for assessment was 31.12.2021. The petitioner challenged the subsequent notifications extending the limitation period, particularly Notification No. 9/2023 CT dated 31.03.2023, on the grounds that the extension was not justified by "special circumstances" or force majeure conditions as required under Section 168A of the Act. The petitioner argued that once the limitation period was extended by Notification No. 13/2022 CT dated 05.07.2022, no further extension was permissible in the absence of such conditions. The respondents countered that the limitation period for assessment of the 2017-18 year had been validly extended up to 31.12.2023 by the notification dated 31.03.2023, which was upheld in prior litigation. Thus, the issuance of notice under Section 73 on 25.09.2023 and subsequent demand order on 30.11.2023 fall within the extended limitation period. The Court acknowledged that the original limitation period was 31.12.2021 but noted the extension granted by the notification dated 31.03.2023. The Court held that the issuance of the notice under Section 73 on 25.09.2023 was within the extended limitation period and therefore not time-barred. The Court did not delve into the validity of the notification extending the limitation period itself, as it had been subject to judicial scrutiny in connected matters. Compliance with procedural requirements under Section 73(8) CGST/BGST Act, 2017 The petitioner challenged the show cause notice dated 29.09.2023 issued under Section 73(1) read with Rule 142(1) on the ground that it did not comply with the mandatory requirement under sub-section (8) of Section 73, which mandates a minimum period of thirty days for the recipient to submit a reply and for the hearing to be conducted. The notice dated 29.09.2023 fixed the date for submission of reply and hearing as 05.10.2023, which is only six days after the notice issuance, falling short of the thirty-day period required. The petitioner appeared on 05.10.2023 but contended that the truncated time frame violated principles of natural justice. The respondents argued that sufficient opportunity was provided, including a reminder issued on 04.11.2023, and that the petitioner had not availed the statutory remedy before the Appellate Authority. The Court examined the timeline and found that the thirty-day period stipulated under Section 73(8) had not been observed. The Court held that the issuance of the notice dated 29.09.2023 was not in accordance with the statutory requirement, thereby violating principles of natural justice. Consequently, the Court set aside the demand order dated 30.11.2023 and remanded the matter to the concerned authority with directions to issue a corrigendum to the notice dated 29.09.2023, providing the petitioner a full thirty days to submit a reply and fixing a hearing date accordingly. The Court mandated completion of this exercise within three months. Issuance of pre-show cause notice under Section 73(3) CGST/BGST Act, 2017 The petitioner contended that the demand order and show cause notices were issued without prior issuance of a pre-show cause notice in Form DRC-01A as required by Section 73(3), thereby violating the principles of natural justice. The Court did not expressly rule on this issue in the operative portion of the judgment but left other contentions and reliefs open for future consideration, indicating that this issue was not determinative at this stage. Service of notices and orders via Common Portal under Section 169 CGST/BGST Act, 2017 The petitioner argued that merely uploading the show cause notice and demand order on the Common Portal does not constitute valid service as mandated by Section 169 of the Act. The Court did not provide a definitive ruling on this issue in the present judgment and left it open for future adjudication or for the authorities to consider. Extension of input tax credit period under Section 16(4) and Article 14 challenge The petitioner challenged the non-extension of the time limit for availing input tax credit under Section 16(4) for the 2017-2018 period despite the COVID-19 pandemic, claiming this selective extension violated Article 14 of the Constitution by denying beneficial relief to registered persons. The Court did not resolve this constitutional issue in the present judgment, leaving it open for future consideration. Exhaustion of statutory remedies and maintainability of writ petition The respondents contended that the petitioner had not exhausted the statutory remedy of appeal before the Appellate Authority and thus the writ petition was not maintainable. The Court acknowledged the availability of statutory remedies but proceeded to entertain the writ petition on the limited ground of violation of Section 73(8) procedural requirements, which is a jurisdictional and fundamental issue affecting the validity of the proceedings. Other contentions were left open. 3. SIGNIFICANT HOLDINGS The Court made the following crucial legal determinations:
The Court thus established the core principle that while extension of limitation period by notification is valid if properly issued, the procedural safeguards under Section 73(8) requiring a minimum thirty-day period for reply and hearing are mandatory and any non-compliance renders the demand order liable to be set aside. The Court's final determination was to allow the writ petition in part by quashing the demand order dated 30.11.2023 and remanding the matter for compliance with procedural requirements, leaving other issues and reliefs open for future adjudication.
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