2026 (2) TMI 275 - HC - GST

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 ... Limitation for issuance and passing of order u/s 73 - extension of limitation by notification under Section 168A - effect of notification extending time limit for recovery of tax - exparte order and right to be heard - remand for fresh adjudication subject to predeposit - predeposit as condition for proceeding and vacating bank attachment - HELD THAT:- Considering the fact that the impugned order is an ex-parte order, as the petitioner has failed to file a reply to the Show Cause Notice in DRC-01 dated 22.05.2024, and following the consistent view taken by this Court under similar circumstances, the case is remitted back to the respondent to pass fresh orders on merits subject to the petitioner deposits 50% of the disputed tax amount in cash or from the Petitioner’s Electronic Cash Ledger, within a period of 30 days from the date of receipt of a copy of this order. It is made clear that bank attachment shall be lifted subject to the deposit of 50% of the disputed tax as ordered above and the Petitioner not being in arrears of any other amount demanded for any other tax period barring the amount demanded under the impugned Order. In case the Petitioner fails to comply with any of the stipulations, the Respondent is at liberty to proceed against the Petitioner to recover the tax in accordance with law as if this Writ Petition was dismissed in limine today. Needless to state, before passing any such order, the Respondent shall give due notice to the Petitioner. Writ Petition stands disposed of. 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.