2025 (2) TMI 466 - HC - GST

Demand, show-cause and assessment under s.73(10) UP SGST Act quashed as time-barred after limitation expired

HC allowed the writ petition and quashed the Demand Order, show-cause notice and assessment order issued under s.73 UP SGST Act for FY 2017-18 as ... Seeking quashing of Demand Order and SCN issued consequent to it by the concerned opposite party u/s 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017 - contention of the petitioner is that the notices are time bound - HELD THAT:- The due date for filing annual return in the case of financial year 2017- 18 was 31.12.2018, however, this due date was extended by the Central Board of Direct Taxes and Customs vide notification 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. Considering the fact that in this case the Assessment Order was passed on 02.12.2023, which could not have been passed as it was barred by the said provision, the writ petition is allowed and the impugned orders dated 02.12.2023 and 29.09.2023 passed by the Assistant Commissioner, Lucknow Sector-20, Lucknow quashed. The issues presented and considered in the judgment are as follows:1. Whether the Demand Order and Show Cause Notice issued under Section 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017, are time-bound and within the jurisdiction of the authorities.2. Whether the impugned orders dated 05.10.2024 and 02.12.2023 were passed beyond the statutory time limit prescribed under Section 73 of the Act, 2017.3. Whether the retrospective effect of a notification dated 24.04.2023 extends the time limit for passing orders under Section 73 of the Act for the financial year 2017-18.Detailed Analysis:The Court considered the contention of the petitioner that the impugned orders were beyond the time limit prescribed by Section 73 of the Act, 2017. The petitioner argued that the orders dated 05.10.2024 and 02.12.2023 were issued after the expiration of the statutory time limit. The Court referred to Section 73(10) of the Act, which mandates that the proper officer must issue the order within three years from the due date for furnishing the annual return for the relevant financial year.The Court also examined Section 44(1) of the Act, which specifies the due date for filing annual returns and allows for extensions by notification. The Court noted that the due date for filing the annual return for the financial year 2017-18 was extended to 05.02.2020 by a notification, which was further extended by a subsequent notification adopted by the State of U.P. to 05.02.2023. The Court emphasized that the impugned orders were passed beyond this extended time limit.Regarding the notification dated 24.04.2023, the Court highlighted that while it extended the time limit for the financial year 2017-18 until 31.12.2023, it had retrospective effect only from 31.03.2023. The Court reasoned that if the time limit prescribed in Section 73 had expired before 31.03.2023, the notification would not apply. Consequently, the Court found that the impugned orders were beyond the jurisdiction as they were issued after the statutory time limit.Significant Holdings:The Court held that the impugned orders dated 05.10.2024 and 02.12.2023 were quashed as they were passed beyond the time limit prescribed under Section 73 of the Act, 2017. The Court ordered the de-freezing of the petitioner's bank accounts and directed that consequences shall follow accordingly.In conclusion, the Court found that the impugned orders were issued beyond the statutory time limit, as prescribed under Section 73 of the Act, 2017, and therefore, quashed the said orders. The Court's decision was based on the interpretation of relevant statutory provisions and notifications, emphasizing the importance of adhering to prescribed time limits in tax matters.