2025 (4) TMI 497 - HC - GST

Time limitation - challege to ex-parte demand order and SCN - Violation of principles of natural justice - HELD THAT - This subject matter is covered by the judgment in M/s Anita Traders Lko. U.P. Thru Proprietor Aneeta Sharma vs. State of U.P. and another 2025 (2) TMI 466 - ALLAHABAD HIGH COURT - It has been held in the said judgment that an order under sub-Section 9 of Section 73 pertaining to financial year 2017-18 could have been passed by 05.02.2023 but not thereafter. The notification dated 24.04.2023 has been considered and the contention that such an order could have been passed til 31.03.2023 has been repelled for the reasons given therein. Now in the case at hand the order under sub-Section 9 of Section 73 has been passed on 28.12.2023 therefore it is clearly time barred. Conclusion - The orders dated 28.12.2023 and 11.07.2023 are quashed due to being issued beyond the jurisdictional time limit prescribed by law. The impugned orders/notices dated 28.12.2023 and 11.07.2023 quashed - petition allowed.

Summary

ISSUES PRESENTED and CONSIDERED

The core legal issue in this judgment concerns the validity of the ex-parte demand order and show cause notice issued under Section 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017, for the assessment year 2017-18. The primary question is whether these orders were issued within the legally prescribed time limits, as outlined in the relevant statutory provisions and notifications.

ISSUE-WISE DETAILED ANALYSIS

Relevant Legal Framework and Precedents

The legal framework centers on Section 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017, particularly sub-sections (9) and (10), which govern the issuance of orders related to tax not paid, short paid, or input tax credit wrongly availed or utilized. Section 44(1) pertains to the due date for filing annual returns, which impacts the calculation of the time limits under Section 73(10). The notification dated 24.04.2023 is also crucial, as it purportedly extends the time limit for issuing orders under Section 73.

Court's Interpretation and Reasoning

The Court analyzed the statutory time limits for issuing orders under Section 73(9) and (10), which prescribe a three-year period from the due date for filing the annual return. For the financial year 2017-18, the original due date for filing was extended to 05.02.2020, thereby setting the deadline for issuing orders as 05.02.2023. The Court scrutinized the notification dated 24.04.2023, which attempted to extend this deadline to 31.12.2023, but noted that its retrospective effect was only applicable from 31.03.2023. Thus, any orders issued after 05.02.2023 but before 31.03.2023 would be time-barred.

Key Evidence and Findings

The key evidence includes the dates of the impugned orders (28.12.2023 and 11.07.2023) and the notification dated 24.04.2023. The Court found that the notification could not retroactively validate orders issued after the expiry of the original three-year period, as it only took effect from 31.03.2023.

Application of Law to Facts

Applying the legal framework, the Court concluded that the orders issued on 28.12.2023 and 11.07.2023 were beyond the permissible time limit, as the three-year period for the financial year 2017-18 expired on 05.02.2023. The notification dated 24.04.2023 did not apply retroactively to extend this deadline.

Treatment of Competing Arguments

The State argued that the notification extended the deadline to 31.12.2023. However, the Court rejected this argument, emphasizing that the notification's retrospective effect only began on 31.03.2023, thus not covering the period before this date.

Conclusions

The Court concluded that the impugned orders were issued beyond the statutory time limit and were therefore without jurisdiction. The orders were quashed as a result.

SIGNIFICANT HOLDINGS

The Court's significant holding is that orders under Section 73(9) for the financial year 2017-18 must be issued by 05.02.2023, in line with the extended due date for filing annual returns. The notification dated 24.04.2023 does not retroactively extend this deadline beyond 31.03.2023.

Core Principles Established

The judgment establishes the principle that statutory time limits for tax orders are strict and cannot be retroactively extended unless explicitly provided by law. Notifications extending deadlines must be carefully scrutinized for their effective dates and applicability.

Final Determinations on Each Issue

The final determination is that the orders dated 28.12.2023 and 11.07.2023 are quashed due to being issued beyond the jurisdictional time limit prescribed by law. The petition is allowed, and the consequences of quashing the orders shall follow accordingly.