Limitation for tax recovery and extension by notification: remand for fresh adjudication subject to 50% predeposit and bank attachment lifted

Limitation for issuance of recovery orders and effect of a notification extending the time limit are central; the HC treated the impugned order as ex parte due to failure to reply to the show cause notice and remitted the matter for fresh adjudication on merits, conditioned on a predeposit. The petitioner must deposit 50% of the disputed tax in cash or from the electronic cash ledger within 30 days; on such deposit and provided no other arrears exist, bank attachment will be lifted. Failure to comply permits the respondent to pursue recovery as if the petition were dismissed; respondent must give notice before further action.

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Issues: Whether the impugned order dated 20.08.2024 confirming demand for the tax period April 2019 - March 2020 is barred by limitation and whether the notifications extending time limits under Section 73(10) (Notification No.9/2023-C.T. dated 31.03.2023 and Notification No.56/2023-C.T. dated 28.12.2023) apply so as to validate the issuance of the order.

Analysis: The Court examined the temporal effect of the statutory limitation under Section 73 and the scope of the executive notifications issued under Section 168A of the CGST Act, 2017 which extend the time limit specified under subsection (10) of Section 73 for issuance of order under subsection (9) of Section 73 for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilised. The Court noted that the relevant notifications extend the operative deadline for the financial year 2019-20 to 31.08.2024 and observed that the impugned order (dated 20.08.2024) falls within the extended period. The Court also considered that the impugned order was passed ex parte due to the petitioner's failure to file a reply to the Show Cause Notice and followed its established practice in similar situations by requiring partial pre-deposit and remitting the matter for fresh adjudication on merits.

Conclusion: The challenge to the impugned order on limitation grounds is rejected and the petition is not allowed on that basis; the Writ Petition is disposed of by remitting the matter to the respondent for fresh adjudication on merits subject to the petitioner depositing 50% of the disputed tax within 30 days and filing a reply to the Show Cause Notice, with adjustments of any amounts already paid and vacatur of bank attachment upon compliance.

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