2024 (11) TMI 911 - HC - GST

Taxpayer Wins Challenge Against Delayed Tax Orders Exceeding Statutory Time Limits Under UPGST Act Section 73(10)

M/s A.V. Pharma Thru. Its Prop. Smt. Madhu Vohra Versus State Of U.P. Thru. Prin. Secy. State Tax Lko. And 2 Others

HC allowed writ petition challenging tax orders issued beyond statutory time limits under U.P.G.S.T. Act, 2017. The court found the impugned orders dated ... Jurisdiction of impugned orders under U.P.G.S.T. Act, 2017 - time limitation u/s 73 and Section 44 of the Act - retrospective effect of notifications - impugned order passed beyond the time limit prescribed therein as calculated from the due date of filing annual returns prescribed in Section 44 (1), which was extended to 05.02.2020 and the time limit of three years ended on 05.02.2023 but the impugned orders are dated 05.10.2024 and 02.12.2023 - HELD THAT:- Ordinarily the due date for filing annual return is 31st December of the end of the Financial Year, which in the case of financial year 2017-18 would be 31.12.2018, however, this due date for filing annual return, was extended vide notification of the Central Board of Direct Taxes and Customs dated, 03.02.2018 to 05.02.2020 and this notification was adopted by the State of U.P. vide notification dated 05.02.2020. Based on this 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 for the financial year 2017-18 could have been passed by 05.02.2023 but not after it. Apparently the impugned orders are beyond the time limit prescribed under sub Section 10 of Section 73 as applicable for the financial year 2017-18 and therefore the impugned orders are beyond jurisdiction being barred by the time provided in the said provision, therefore, the writ petition is allowed and the impugned orders dated 05.10.2024 and 02.12.2023 issued by the Deputy Commissioner, State Tax, Sector 05, Lucknow quashed. The accounts of the petitioner which have been freezed shall be de-freezed - petition allowed. Issues:1. Jurisdiction of impugned orders under U.P.G.S.T. Act, 2017.2. Interpretation of time limits under Section 73 and Section 44 of the Act.3. Validity of retrospective effect of notifications on time limits.Detailed Analysis:The High Court considered a writ petition challenging orders issued under the U.P.G.S.T. Act, 2017. The petitioner sought to quash the orders dated 05.10.2024 and 02.12.2023 issued by the Deputy Commissioner, State Tax, Sector 05, Lucknow. The petitioner argued that the orders were beyond the jurisdiction as they exceeded the time limit prescribed under sub Section 10 of Section 73 of the Act. The contention was based on the due date for filing annual returns prescribed in Section 44(1), which was extended to 05.02.2020, making the time limit for the impugned orders to end on 05.02.2023. However, the orders were dated beyond this period, on 05.10.2024 and 02.12.2023, respectively.The Court examined the provisions of Section 73(9) and (10) of the Act, 2017, which govern the time limit for issuing orders related to tax liabilities. It noted that a notification dated 24.04.2023 extended the time limit of three years mentioned in Section 73(10) for the financial year 2017-18 up to 31.12.2023. However, the retrospective effect of this notification was limited to 31.03.2023, meaning it did not apply prior to that date. Section 73(10) mandates that the order must be issued within three years from the due date for furnishing annual returns or from the date of erroneous refund.Furthermore, the Court referred to Section 44(1) of the Act, which specifies the due date for filing annual returns. The due date was extended to 05.02.2020 through notifications, thereby affecting the calculation of the time limit under Section 73(10). The Court emphasized that the impugned orders were issued beyond the prescribed time limit, rendering them jurisdictionally flawed. The retrospective application of the notification dated 24.04.2023 was found inapplicable if the time limit had expired before 31.03.2023.Ultimately, the Court held that the impugned orders were beyond the statutory time limit as per Section 73(10) for the financial year 2017-18. Consequently, the Court allowed the writ petition, quashed the orders dated 05.10.2024 and 02.12.2023, and directed the de-freezing of the petitioner's bank accounts. The judgment emphasized the importance of adhering to statutory time limits and the retrospective effect of notifications in determining the validity of administrative actions under the U.P.G.S.T. Act, 2017.