The Patna High Court while staying the assessment order held that the limitation period in terms of Section 73(10) of the Goods and Service Tax Act (GST Act) is to be computed from the due date, and not from the extended due date, for furnishing the Annual Return for the relevant Financial Year.
The bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy has observed that the proviso under section 44 (2) empowers the Government to issue a notification and the notification dated 28.10.2020 has been issued by the Commissioner which does not have the power. The notification is also issued under the proviso to Section 44(1) which empowers the Commissioner to exempt any class of registered persons from filing annual returns under the provision and not for extension of due date for filing of annual returns or extension of the period for filing of annual returns.
Background
The petitioner/assessee has challenged the assessment order passed on 19.04.2024 under the Central Goods and Services Tax Act, 2017.
The petitioner submitted that the due date of furnishing the annual return as per Rule 80 of the Central Goods and Services Rules, 2017 is on the 31st December, following the end of such financial year. Section 73(10) speaks of a proceeding to be initiated within three years from the due date of filing of annual returns.
A conspectus of the provisions would indicate that Rule 80 prescribes the time within which return is to be filed, under Section 44(1) of the GST Act which is up to the 31st day of December following the end of such a financial year.
A registered person is prohibited in filing an annual return at any time after the expiry of three years from the due date of furnishing the said annual return as is provided under Section 44(2).
However, the proceeding under Section 73(10) has to be initiated within three years from the due date of filing of annual return, which is as provided under Rule 80.
The assessee contended that the Assessment Year is 2018-19 and the end of the financial year comes on 31.12.2019, within which time as per Rule 80, an annual return has to be filed. The petitioner filed the annual return before 31.12.2019 and the present proceeding was initiated on 19.04.2024. The three year period as provided under Section 73(10) ends on 31.12.2022. The ground of limitation was raised.
The department contended that the due date for filing return was extended from 31.12.2019 to 31.10.2020 and later to 31.12.2020, by Annexure P-3. It is further argued that since 31.12.2020 falls within the period in which the Supreme Court extended the limitation period, as per Suo Motu Writ Petition (C) No. 3 of 2020, Cognizance for Extension of Limitation, In Re (2021) 5 SCC, the period for filing of return stands further extended.
The Supreme Court held that all limitations which occurs between 15.03.2020 till 28.02.2022 will stand extended for a further period of three months. Hence, the limitation stands extended upto 28.05.2022 and three years from that date is 19.04.2024. The contention would be applicable only if the due date stands extended to 31.10.2020 and 31.12.2020.
Also Read : GST DEPT. CAN’T ADJUDICATE SCN SOLELY BASED ON AUDIT REPORT: DELHI HIGH COURT
Conclusion
The court prima facie opined that the extension as provided in the second proviso to Section 44(2) is only with respect to the filing of a return even after the expiry of the further period of three years, from the due date of furnishing the annual return.
The Court has granted an interim stay of the assessment order confirming the demand.
Case Title: S.S. Enterprises Versus Union of India & Ors.
Case No.: Civil Writ Jurisdiction Case No.10743 of 2024
Date: 30/07/2024
Counsel For Petitioner: D.V.Pathy
Counsel For Respondent: K.N.Singh
