2025 (3) TMI 1392 - HC - GST

Section 73(9) demand order struck down as time-barred when passed beyond three-year limitation period

Ambrish Chandra Arya Versus State Of U.P. Thru. Prin. Secy. (Deptt. Of State Tax) And Another

The HC allowed the petition challenging an ex-parte demand order and SCN, ruling it was time-barred. Following precedent in M/s Anita Traders case, the ... Challenge to ex-parte demand order and SCN - Time limitation - HELD THAT:- This subject matter is covered by the judgment and order in M/s Anita Traders Lko. U.P. Thru Proprietor Aneeta Sharma vs. State of U.P. and another [2025 (2) TMI 466 - ALLAHABAD HIGH COURT] where it was held that 'As would be apparent from a reading of the said order, 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.' It has been held in the said judgment that an order under sub-Section 9 of Section 73 pertaining to financial year 2017-18 could have been passed by 05.02.2023 but not thereafter. The notification dated 24.04.2023 has been considered and the contention that such an order could have been passed til 31.03.2023 has been repelled for the reasons given therein. Now, in the case at hand the order under sub-Section 9 of Section 73 has been passed on 14.12.2023, therefore, it is clearly time barred. Conclusion - 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. Petition allowed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal issue considered in this judgment is whether the demand order and show cause notice issued under Section 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017, for the assessment year 2017-18, were validly issued within the prescribed time limits. Specifically, the court examined whether the orders, dated 14.12.2023 and 21.09.2023, were time-barred under the statutory framework.2. ISSUE-WISE DETAILED ANALYSISRelevant Legal Framework and Precedents:The primary legal framework involved is Section 73 of the Uttar Pradesh State Goods and Service Tax Act, 2017, particularly sub-sections 9 and 10. Sub-section 10 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. Additionally, Section 44(1) prescribes the due date for filing annual returns as December 31 following the end of the financial year, subject to extensions by the Commissioner.The court also referenced a previous judgment dated 06.02.2025 in Writ Tax No. 57 of 2025, which dealt with a similar issue and provided a precedent for the current case.Court's Interpretation and Reasoning:The court interpreted the statutory provisions to determine the applicable time limits for issuing orders under Section 73. The original due date for filing the annual return for the financial year 2017-18 was December 31, 2018. This was extended to February 5, 2020, by a notification from the Central Board of Direct Taxes and Customs, which was adopted by the State of Uttar Pradesh.The court noted that the three-year period for issuing orders under Section 73(10) would have ended on February 5, 2023. However, the respondents relied on a notification dated April 24, 2023, which purportedly extended the time limit to December 31, 2023. The court found that this notification was only applicable retrospectively from March 31, 2023, and not before, meaning it could not apply to extend the deadline that had already expired on February 5, 2023.Key Evidence and Findings:The court relied on the statutory text of Section 73 and Section 44, the notifications extending the due dates, and the precedent set by the judgment in Writ Tax No. 264/2024. The court found that the orders dated December 14, 2023, and September 21, 2023, were issued beyond the permissible time frame, rendering them void for lack of jurisdiction.Application of Law to Facts:Applying the legal framework to the facts, the court concluded that the orders were time-barred. The notification dated April 24, 2023, could not retroactively extend the deadline for issuing orders that had already expired. Consequently, the orders issued in December 2023 and September 2023 were invalid.Treatment of Competing Arguments:The court addressed the respondent's argument that the April 24, 2023, notification extended the time limit. It rejected this argument, emphasizing that the notification's retrospective effect was limited to March 31, 2023, and could not revive an expired deadline.Conclusions:The court concluded that the orders were issued without jurisdiction due to being time-barred. It allowed the writ petition and quashed the impugned orders and notices.3. SIGNIFICANT HOLDINGSVerbatim Quotes of Crucial Legal Reasoning:'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.'Core Principles Established:The judgment reaffirms the principle that statutory deadlines for issuing tax orders must be strictly adhered to, and any extension of such deadlines must be clearly authorized by law. Notifications extending deadlines cannot apply retroactively to revive expired deadlines unless explicitly stated.Final Determinations on Each Issue:The court determined that the orders dated December 14, 2023, and September 21, 2023, were issued beyond the permissible time frame and were therefore null and void. The writ petition was allowed, and the impugned orders were quashed, with the consequences of such quashing to follow accordingly.