2024 (5) TMI 1183 - HC - GST

Denial of Input Tax Credit (ITC) - challenge to assessment order on the ground that the same is barred by limitation - power to extend the time limit - HELD THAT - The order under sub-section (9) of Section 73 is to be issued by the proper officer within a period of three years from the due date for furnishing the annual returns for the financial year. An order passed beyond the period of three years in respect of the financial year from the due date of filing the annual return would become time-barred and without jurisdiction. Section 168A empowers the Government to extend the time limit in special circumstances for actions which could not be completed due to force majeure. This power is overriding power, and sub-section (1) of Section 168A has a non-obstante clause. If there is force majeure as defined in Section 168A, the Government is empowered to extend the limitation period for taking actions which could not be completed or complied with due to force majeure. No one can deny that COVID-19 was a force majeure as it was a pandemic that caused large-scale human tragedy and suffering all over the world and paralyzed the world, including economic activities. Extension of time limit - HELD THAT - How much time could have been extended considering the pandemic is the discretion of the Executive, which has been taken based on the recommendation of the GST Council. It is not found that the notifications impugned in the writ petition in Exts. P7 and P8 are ultra vires the provisions of Section 168A of the CGST/SGST Act. The Government is well within the power to extend the limitation for completing the proceedings and taking action under Section 73 of the Act by issuing notification under Section 168A of the GST Act if there is force majeure. COVID-19 was a force majeure, and taking into account the various factors, the time limit has been extended. Therefore, there are no substance in the challenge to the said notifications, and the writ petition is dismissed to that extent. As the Government itself has come out with Circular No. 183/15/2022-GST dated 27.12.2022 to deal with the difference in Input Tax Credit availed in Form GSTR-3B as compared to that detailed in Form GSTR-2A for the Financial Year 2017-18 and 2018-19, it is found that in the case of the petitioner also the benefit of the said Circular should be given and the assessment order to be passed afresh. The matter is remanded back to the Assessing Authority to pass a fresh Assessment Order giving the benefit of Circular No. 183/15/2022-GST dated 27.12.2022 - Petition allowed by way of remand.

Summary

Issues Involved:
1. Denial of Input Tax Credit (ITC)
2. Limitation for passing the assessment order u/s 73(9) of the CGST Act
3. Validity of Notifications extending the time limit u/s 168A of the CGST Act
4. Application of Circular No. 183/15/2022-GST dated 27.12.2022

Summary:

1. Denial of Input Tax Credit (ITC):
The petitioner, a registered dealer under the CGST/SGST Act, challenged the Order-in-Original No. 11/2023/GST dated 21.06.2023, which denied the petitioner's claim for ITC amounting to Rs. 1,16,75,250/- for the period from July 2017 to September 2017. The petitioner argued that the omission to report inward and outward supplies during this period was due to the initial rollout issues of the GST system, including the non-availability of Form GSTR-2A.

2. Limitation for passing the assessment order u/s 73(9) of the CGST Act:
The petitioner contended that the assessment order was barred by limitation as per Section 73(10) of the GST Act, which mandates that proceedings u/s 73(9) must be concluded within three years from the last date of filing GSTR-9 for the relevant year. The last date for filing the return in GSTR-9 was 07.02.2020, making the deadline for completing the proceedings 07.02.2023. The impugned order was passed on 21.06.2023, and the demand notice was issued on 14.07.2023, thus exceeding the prescribed limitation period.

3. Validity of Notifications extending the time limit u/s 168A of the CGST Act:
The petitioner challenged the notifications No. 13/2022-Central Tax dated 05.07.2022 and No. 09/2023-Central Tax dated 31.03.2023, which extended the time limit for issuance of the order u/s 73(9) to 30.09.2023 and 31.12.2023, respectively. The petitioner argued that these notifications were beyond the powers conferred u/s 168A of the Act, as there was no force majeure justifying the extension. However, the court held that COVID-19 constituted a force majeure, and the notifications were validly issued based on the GST Council's recommendations and the Supreme Court's suo motu order.

4. Application of Circular No. 183/15/2022-GST dated 27.12.2022:
The petitioner argued that the Assessing Officer did not provide time to comply with the provisions of Circular No. 183/15/2022-GST, which addresses discrepancies between ITC claimed in Form GSTR-3B and that available in Form GSTR-2A for FY 2017-18 and 2018-19. The court agreed that the petitioner should be given the benefit of this Circular. Consequently, the assessment order was set aside, and the matter was remanded back to the Assessing Authority to pass a fresh assessment order in compliance with the Circular.

Conclusion:
The writ petition was dismissed regarding the challenge to the notifications extending the time limit. However, the assessment order was set aside, and the matter was remanded back to the Assessing Authority to pass a fresh assessment order, giving the petitioner the benefit of Circular No. 183/15/2022-GST dated 27.12.2022. The petitioner is directed to appear before the Assessing Authority with relevant documents on 26.02.2024. No order as to costs.