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2025 (4) TMI 1464 - HC - GSTPrinciples of natural justice - challenge to ex-parte order - contention of the petitioner s counsel was that order is time barred - HELD THAT - Though by virtue of the Central Board of Direct taxes and Customs Notification dated 03.02.2018 the date for filing annual return for the financial year 2017-18 which would normally be 31.12.2018 stood extended till 05.02.2020 and based on the said notification the period of three years mentioned in Sub-section 10 of Section 73 would end on 05.02.2023 meaning thereby an order under Sub-Section 9 of Section 73 could have been passed by 05.02.2023 for the financial year 2017-18 however in view of the Notification dated 21.07.2022 which came into effect from 01.03.2020 the said time limit specified under Sub-section 10 of Section 73 for issuance of order under Sub-section 9 of Section 73 of the U.P. GST Act 2017 for recovery of taxes not paid or short paid or of input tax credit wrongly availed or utilized in respect of a tax period for the financial year 2017-18 stood excluded up to the 30th day of September 2023 and by the subsequent notification of the State Government dated 24.04.2023 which has been given effect from 31.03.2023 the said time limit stood extended till 31.12.2023 for the financial year 2017-18. In the case at hand the impugned order has been passed on 13.12.2023 therefore it has been passed within the time limit as extended by the Notifications referred hereinabove. The said notifications are not under challenge. Conclusion - The impugned order of assessment dated 13.12.2023 is not barred by time therefore the writ petition is not maintainable as remedy of appeal is prescribed against such an order. Petition dismissed.
The core legal questions considered by the Court are:
1. Whether the impugned ex-parte order dated 13.12.2023 passed under Section 73(9) of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter "the Act, 2017") imposing tax liability, penalty, and interest is barred by limitation under Section 73(10) of the Act, 2017. 2. The applicability and effect of various notifications extending or excluding the period of limitation under Section 73(10) of the Act, 2017, particularly for the financial year 2017-18. 3. Whether the writ petition challenging the impugned order is maintainable or whether the petitioner's remedy lies in appeal. Issue-wise Detailed Analysis Issue 1: Limitation under Section 73(10) of the U.P. GST Act, 2017 for passing assessment orders for financial year 2017-18 Legal Framework and Precedents: Section 73(9) of the Act empowers the proper officer to issue an order for recovery of tax not paid or short paid, or input tax credit wrongly availed or utilized. Section 73(10) prescribes a strict three-year limitation period for issuance of such orders, counted from the due date for furnishing the annual return or from the date of erroneous refund, whichever is applicable. Section 44(1) mandates that every registered person furnish an annual return electronically by 31st December following the end of the financial year, subject to extension by the Commissioner. Court's Interpretation and Reasoning: Ordinarily, the due date for filing the annual return for FY 2017-18 would have been 31.12.2018, making the limitation period under Section 73(10) expire on 31.12.2021. However, this due date was extended to 05.02.2020 by a Central Board of Direct Taxes and Customs notification dated 03.02.2018, adopted by the State on 05.02.2020. Thus, the three-year limitation period for issuance of orders under Section 73(9) for FY 2017-18 would expire on 05.02.2023. The petitioner contended that the impugned orders dated 05.10.2024 and 02.12.2023 were beyond this limitation and hence without jurisdiction. Key Evidence and Findings: The petitioner relied on a prior judgment (Writ Tax No. 264 of 2024) wherein the Court held that the time limit expired on 05.02.2023 and orders passed beyond that were barred by limitation. Application of Law to Facts: The Court initially found that the impugned orders were passed beyond the three-year limitation period and thus were barred by limitation. Treatment of Competing Arguments: The State contended that subsequent notifications extended or excluded certain periods from the computation of limitation, thereby validating the impugned order's date. Conclusion: Initially, the Court allowed the writ petition and quashed the impugned orders as barred by limitation. Issue 2: Effect of Notifications Extending or Excluding Periods for Limitation under Section 73(10) Legal Framework and Notifications: Two relevant notifications were considered:
Court's Interpretation and Reasoning: The Court observed that the 21.07.2022 notification was not brought to its notice in the earlier judgment (Writ Tax No. 264 of 2024). This notification effectively suspended the limitation period from March 2020 to February 2022 and extended the limitation up to September 2023. Further, the 24.04.2023 notification extended the limitation period till 31.12.2023 but only with retrospective effect from 31.03.2023 onward, meaning it could not revive limitation periods that had already expired before that date. Key Evidence and Findings: The impugned order dated 13.12.2023 falls within the extended limitation period as per the combined effect of the notifications dated 21.07.2022 and 24.04.2023. Application of Law to Facts: Since the limitation period was extended and the period from 01.03.2020 to 28.02.2022 was excluded, the limitation had not expired as of 13.12.2023 when the impugned order was passed. Treatment of Competing Arguments: The petitioner failed to produce the notification dated 21.07.2022 and relied solely on the earlier judgment which did not consider this notification. The State's argument that the impugned order was within time was accepted. Conclusion: The Court concluded that the impugned order was not barred by limitation and was validly passed within the extended limitation period. Issue 3: Maintainability of the Writ Petition Legal Framework: The Act prescribes a statutory remedy of appeal against orders passed under Section 73(9). Court's Interpretation and Reasoning: Since the impugned order was not barred by limitation and was validly passed, the petitioner's challenge by way of writ petition was not maintainable. The proper remedy was to file an appeal as provided under the Act. Key Evidence and Findings: The petitioner did not produce the notification dated 21.07.2022 and did not avail the statutory appellate remedy. Application of Law to Facts: The Court dismissed the writ petition on the ground of non-maintainability, emphasizing adherence to statutory remedies. Treatment of Competing Arguments: The petitioner's reliance on the earlier judgment was insufficient to bypass the statutory appeal mechanism. Conclusion: The writ petition was dismissed as not maintainable. Significant Holdings "The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund." (Section 73(10) of the Act, 2017) "The due date for filing annual return for the financial year 2017-18 was extended to 05.02.2020 and accordingly the limitation period under Section 73(10) expired on 05.02.2023, however, the notification dated 21.07.2022 excludes the period from 01.03.2020 to 28.02.2022 from computation of limitation and extends the time limit for issuance of order under Section 73(9) up to 30.09.2023." "The notification dated 24.04.2023 further extends the limitation period up to 31.12.2023 but with retrospective effect only from 31.03.2023 and hence does not revive any limitation period expired before that date." "The impugned order dated 13.12.2023 has been passed within the extended limitation period and is therefore not barred by limitation." "Since the impugned order is not barred by limitation, the writ petition challenging the order is not maintainable and the remedy lies in filing an appeal as prescribed under the Act." "The writ petition is dismissed."
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