TIME LIMIT TO PASS ORDER UNDER SECTION 73

[Sadanand Bulbule]

General provisions relating to determination of tax.

75. (1) XXXX

(2) Where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under sub-section (1) of section 73.

(2A) Where any Appellate Authority or Appellate Tribunal or court concludes that the penalty under clause (ii) of sub-section (5) of section 74A is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the penalty shall be payable by such person, under clause (i) of sub-section (5) of section 74A.

(3) Where any order is required to be issued in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.

My take:

So in terms of the provisions of Section 75[3], the time limit to issue an order starts within two years from date of direction of the FAA or GSTAT and such order is not hit by time barred from the relevant period.

I also understand that, since the amount of tax is not yet determined in terms of notice issued under 74/74A, and stands converted under Section 73 vide direction under Section 75[3], there is no need to pre-deposit 10% or 20% of tax amount as normally required under Section 107(6)/112(8) of the Act.

The CBIC Circular No.185/17/2022 dated 27/12/2022 is silent as regards to the pre-deposit issue.

Experts to validate.

AI Summary

Limitation for reassessment under section 73 requires issuance of consequential orders within two years of appellate direction.
Section 75(2) converts notices framed for fraud or wilful misstatement into proceedings under the general tax determination provision, requiring the proper officer to re determine tax as if the notice had been issued under that provision. Appellate directions that mandate consequential orders must be complied with within two years from communication; this conversion affects limitation exposure and may, according to commentators, alter the applicability of pre deposit requirements, although administrative guidance is silent.