2024 (9) TMI 1461 - HC - GST

Limitation period for initiating proceedings under Section 73(10) of CGST Act, 2017 - filing of annual returns under the Central Goods and Services Tax Act, 2017 - HELD THAT - In the present case, 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 is initiated on 19.04.2024, as per Annexure P-3. The three year period as provided under Section 73(10) ends on 31.12.2022. The ground of limitation is raised on this count. 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. Sub-section (2) as we notice speaks of any annual return to be filed within three years from the due date of furnishing the said annual return. Section 73(10) specifies three years from the due date of filing of annual return and not three years from the extended date of filing an annual return under Section 44(2). Further, it has to be noticed that the proviso under Sub-section (2) empowers the Government to issue a notification and the notification produced before us dated 28.10.2020 has been issued by the Commissioner who does not have such 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 provided under Sub-section (2), for filing of annual returns. Interim stay of the Annexure P-3 order granted - Post on 11.09.2024.

Summary

Issues:
1. Limitation period for initiating proceedings under Section 73(10) concerning the filing of annual returns under the Central Goods and Services Tax Act, 2017.

Analysis:
The judgment pertains to a case concerning the Assessment Year 2018-19 and the assessment order passed under the Central Goods and Services Tax Act, 2017. The main issue raised is regarding the limitation period for initiating proceedings under Section 73(10) in relation to the due date of filing annual returns. The petitioner argues that the due date for filing the annual return is the 31st day of December following the end of the financial year, as per Rule 80. Section 73(10) mandates proceedings to be initiated within three years from the due date of filing annual returns. However, the respondent contends that the due date for filing the return was extended to 31.12.2020, in line with a Supreme Court decision extending limitation periods due to the pandemic.

The court notes that the due date for filing the return was indeed extended to 31.12.2020, as per Annexure P-3, based on the Supreme Court's decision. However, the court opines that the extension provided in Section 44(2) is only for filing the return after the original three-year period, not for extending the period for initiating proceedings under Section 73(10). The court highlights that Section 73(10) specifies three years from the due date of filing annual returns, not from the extended due date. Additionally, the court points out that the Commissioner lacks the authority to issue a notification for extending the due date for filing annual returns, as it falls under the purview of Section 44(1) and not Section 44(2).

Consequently, the court grants an interim stay on the assessment order (Annexure P-3) based on the prima facie view that the extension granted for filing returns does not automatically extend the period for initiating proceedings under Section 73(10). The court directs the filing of a counter affidavit within three weeks and schedules the next hearing for 11.09.2024.