2024 (11) TMI 911 - HC - GST

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

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 ... Limitation period for issuance of order under Section 73(9) read with Section 73(10) - due date for furnishing annual return under Section 44(1) - retrospective extension of limitation by notification and its temporal applicability - jurisdictional bar due to expiry of limitation periodLimitation period for issuance of order under Section 73(9) read with Section 73(10) - due date for furnishing annual return under Section 44(1) - retrospective extension of limitation by notification and its temporal applicability - jurisdictional bar due to expiry of limitation period - Validity of impugned orders dated 05.10.2024 and 02.12.2023 for financial year 2017-18 insofar as they were issued after the three-year period prescribed by Section 73(10) as calculated from the extended due date for filing the annual return under Section 44(1). - HELD THAT: - The court examined the temporal interplay between the due date for filing the annual return under Section 44(1) and the three-year limitation in Section 73(10) for issuing an order under Section 73(9). The due date for filing the annual return for 2017-18 had been extended to 05.02.2020 by a central notification which the State adopted, and hence the three-year period under Section 73(10) expired on 05.02.2023. Reliance placed by the opposite parties on the notification dated 24.04.2023 was considered: that notification extended the three-year period up to 31.12.2023 but expressly provided retrospective operation only from 31.03.2023. Where the three-year limitation had already expired prior to 31.03.2023 (here on 05.02.2023), the retrospective effect from 31.03.2023 could not operate to revive or validate actions taken after the expiry. Consequently, orders issued after 05.02.2023 were held to be beyond the statutory time and therefore without jurisdiction. [Paras 5, 7, 8, 9]Impugned orders dated 05.10.2024 and 02.12.2023 are time barred under Section 73(10) read with Section 44(1) for FY 2017 18 and are quashed; consequential directions follow including de freezing of the petitioner's bank accounts.Final Conclusion: Writ petition allowed; impugned orders quashed as time barred and the petitioner's frozen bank accounts shall be defrozen with consequential relief. 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.