Can extended limitations override Statutory Time Limits? Uncovering the Potential Unconstitutionality of Notification Extending Deadline for GST Orders u/s 73

The (CBIC) has extended the deadline for issuing demand orders under Section 73(9) of the Goods and Services Tax Act on 28/12/2023 through Notification 56/2023. Read More: Issuance of Goods and Services Tax Demand Order under Section 73(9) of Central Goods and Services Tax (CGST) Act as per limitation periods under Section 73(10) extended in line with the following Notifications — Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful-misstatement or suppression of facts — [ (9) The proper officer shall, after considering the representation, if any, made by person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to ten percent of tax or ten thousand rupees, whichever is higher, due from such person and issue an order. (10) The proper officer shall issue the order under sub-section (9) 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 utilized relates to or .

Notably, the new notifications are issued as per the amendments made to Section 168 by inserting the Section 168A. Specifically, the Insertion of Section 168A of the Central Goods and Services Tax Act as per Section 7 of The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The amendment itself came in 2020 and currently, the matters pertaining to Financial Years 2017-18.

And the newly inserted Section 168A(2) defines the retrospective applicability of the power to issue notification under sub-section (1) — “shall include the power to give retrospective effect to such notification from a date not earlier than the date of commencement of this Act. ” To Learn More About GST Laws and Practice, attend the Power of Government to extend time limit in special circumstances — (1) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions which cannot be completed or complied with due to . (2) The power to issue notification under sub-section (1) shall include the power to give retrospective effect to such notification from a date not earlier than the date of commencement of this Act.

Explanation. – For the purposes of this section, the expression “ ” means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act. Grab your copy of the latest GST Bare Act here: At present, there is no such ground attributable to which affects the implementation of any of the provisions of the act (GST Act) throughout India.

Thus the invocation of Section 168A is an act of grave misuse of legislative provisions. Further, neither the press release nor the recent meeting minutes of the GST Council show any hint of discussion or recommendation regarding the extension of the time limit. As per the Provisions of Section 168A, the Government may, , by notification, extend the time limits.

However, as noted, the Press Releases of GST Council Meetings do not give any hint of any such recommendation whatsoever. Read GST Council Meeting Minutes here: Suggested Reasons for Unconstitutionality and Ultra Vires nature of the limitation extension notification: – Thus, in conclusion, the following grounds can be relied on while moving an appeal/petition against Section 73 demand orders that are issued invoking the extended period of limitation as per the said Notifications– For the above stated reasons, the notification extending the deadline is both of the Goods and Services Tax Act, 2017 and unconstitutional for grave deprivation of rights of GST Taxpayers. The following case laws are also in favour of the assessee, even though only interim orders have been issued in the favour of the petitioners — [R/SPECIAL CIVIL APPLICATION NO.

20227 of 2023, Gujarat HC] In summary, the recent notifications extending the time limits for issuing Goods and Services Tax demand orders under Section 73(9) raise significant concerns regarding their constitutionality and adherence to the statutory framework. The basis for such extensions, as per Section 168A of the Central Goods and Services Tax Act, relies on the concept of force majeure, yet no such grounds are evident at the time of notification issuance. Moreover, the absence of any recommendation in GST Council meetings and press releases adds to the uncertainty surrounding the legitimacy of these extensions.

The potential for perpetual extensions under the guise of force majeure grants broad powers to the government, posing a serious risk of abuse against honest GST taxpayers. The retrospective applicability of Section 168A is also questionable, as it seems to favor revenue at the expense of the rights of taxpayers. © 2020 Taxscan © 2020 Taxscan.