Writ Petition Not Maintainable as Appeal is Prescribed Remedy for Time-Barred Demand Order Under Section 73(9) of CGST/UPGST Act for FY 2017-18, as Per Extended Limitation.
Issue:
Whether a writ petition challenging an ex-parte assessment order passed under section 73(9) of the CGST/UPGST Act, imposing tax liability, penalty, and interest for the period 2017-18, is maintainable on the sole ground that the order is time-barred, especially when an appeal remedy is available against such an order.
Facts:
For the period 2017-18, an ex-parte order was passed by the Deputy Commissioner under section 73(9) of the CGST/UPGST Act, imposing tax liability, as well as penalty and interest on the assessee. The assessee contended that this order was time-barred. The order was passed on December 13, 2023.
Decision:
In favor of the revenue: The court held that the impugned assessment order passed on December 13, 2023, was not barred by time. Therefore, the writ petition filed by the assessee was not maintainable, as the remedy of appeal is prescribed against such an order.
Key Takeaways:
- Limitation Period for Section 73(9) Orders: For Financial Year 2017-18, the initial due date for furnishing the annual return was December 31, 2018. The original three-year limitation period for issuing an order under Section 73(9) would have thus ended on December 31, 2021. However, this due date for the annual return was extended to February 5, 2020. Consequently, the three-year limitation for the order would end on February 5, 2023.
- Extensions through Notifications (Section 168A): The Government, using powers under Section 168A of the CGST Act (and corresponding State GST Acts), has issued several notifications extending these time limits, especially due to the COVID-19 pandemic.
- Notification No. 596/XI-2-22-9(47)/17-T.C.187-U.P. Act-1-2017-Order-(249)2022 dated July 21, 2022, extended the time limit for FY 2017-18 orders under Section 73(9) up to September 30, 2023. This notification was deemed to have come into force from March 1, 2020.
- A subsequent Notification dated April 24, 2023, further extended the time limit for FY 2017-18 up to December 31, 2023. This notification was given retrospective effect from March 31, 2023.
- Application to the Case: Since the ex-parte order was passed on December 13, 2023, it fell within the extended time limit of December 31, 2023, granted by the notifications for the financial year 2017-18. Therefore, the order was not time-barred.
- Writ Remedy vs. Statutory Appeal: When a statutory remedy of appeal is available against an assessment order (as it is under GST law), a writ petition is generally not entertained by the High Court unless there are exceptional circumstances, such as a complete lack of jurisdiction, violation of natural justice (where no alternative remedy is equally efficacious), or an order being ex facie time-barred without any ambiguity from relevant notifications. In this case, since the order was found to be within the extended limitation period, the general rule of exhausting the alternate statutory remedy of appeal applied.
HIGH COURT OF ALLAHABAD
Manoj Glass thru. Its Sole
v.
State of U.P.
Rajan Roy and Om Prakash Shukla, JJ.
WRIT TAX No. 303 of 2025
APRIL 21, 2025
Shobhit Kant and Anshuman Asthanafor the Petitioner.
ORDER
1. Shri Shobit Kant, learned counsel for the petitioner and Shri Rajesh Tiwari, learned Additional Chief Standing Counsel for the State.
2. By means of this writ petition the petitioner has challenged ex-parte order dated 13.12.2023 passed by the Deputy Commissioner, Sector 21, State GST, Lucknow under Section 73(9) of Goods Service Tax Act, 2017 by which tax liability of Rs.1,12,827.38/- as well as the penalty of Rs.20,000/- and interest of Rs.1,14,787.42/- have been imposed.
3. The contention of the petitioner’s counsel was that order is time barred. He invited our attention to a judgment passed by us on 12.11.2024 in A.V. Pharma v. State of U.P (Allahabad)/Writ Tax No. 264 of 2024 to submit that based on the said judgment this writ petition is liable to be allowed. The said judgment reads as under:-
“1. Supplementary affidavit on behalf of petitioner and short counter affidavit on behalf of State filed today are taken on record.
2. Heard Shri Anuj Kudesia, learned counsel for the petitioner and learned Additional Chief Standing Counsel for the State as also Shri Akhilesh Kumar, Deputy Commissioner, State G.S.T., Lucknow, who is present before this Court.
3. The present writ petition has been filed with the following reliefs:-
“i) to issue a writ, order or direction in the nature of Certiorari quashing the order on Form GST DRC-13 dated 05.10.2024 issued by Deputy Commissioner, State Tax, Sector 05, Lucknow contained as annexure no. 1 to this writ petition.
(ii) to issue a writ, order or direction in the nature of certiorari quashing the assessment order and DRC-07 dated 02.12.2023 issued by Deputy Commissioner, State Tax, Sector-5, Lucknow contained as annexure no. 2 to this writ petition.
(iii) to issue a writ, order or direction in the nature of mandamus commanding the respondents to direct the petitioner bank to defreeze the two bank accounts operated petitioners i.e. account No. 7711564951 and Accout No. 9946014812 in Kotak Mahindra Bank.
4. The contention of learned counsel for the petitioner is that the impugned orders are barred by sub Section 10 of Section 73 of the U.P.G.S.T. Act, 2017 (hereinafter referred to as, the Act, 2017) as they have been passed beyond the time limit prescribed therein as calculated from the due date of filing annual returns prescribed in Section 44 (1), which was extended to 05.02.2020 and the time limit of three years ended on 05.02.2023 but the impugned orders are dated 05.10.2024 and 02.12.2023, therefore, the impugned orders are without jurisdiction.
5. After hearing the parties, what comes out is that for justifying the time limit within which the impugned orders have been passed under Section 73 (9) and (10) of the Act, 2017 for the financial year 2017-18 reliance is being placed upon a notification dated 24.04.2023 by which the time limit of three years mentioned in sub Section 10 of Section 73 was extended for the financial year 201718 upto 31.12.2023, however, what is being omitted from consideration by the opposite party is that this notification dated 24.04.2023 has been given retrospective effect only from 31.03.2023 and not prior to it, now, in this context we may refer to Section 73 (10) of the Act, 2017, which reads as under:-
“(10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund.”
6. We may also refer to Section 44(1) of the Act, 2017, which reads as under:-
“44. Annual return -(1) Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty-first day of December following the end of such financial year.
Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual return for such class of registered persons as may be specified therein:
Provided further that any extension of time limit notified by the Commissioner of Central tax shall be deemed to be notified by the Commissioner.”
7. Ordinarily the due date for filing annual return is 31st December of the end of the Financial Year, which in the case of financial year 2017-18 would be 31.12.2018, however, this due date for filing annual return, as already observed earlier, was extended vide notification of the Central Board of Direct Taxes and Customs 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 201718 could have been passed by 05.02.2023 but not after it. Now the opposite parties are relying on the notification dated 24.04.2023 to submit that in fact they could have passed the order under sub Section 9 of Section 73 uptill 31.12.2023 however in doing so, they omit to consider para no. 2 of the said notification which says that the notification dated 24.04.2023 would be applicable retrospectively but only from 31.03.2023 meaning thereby, if the time limit of three years prescribed in sub Section 10 of Section 73 read with sub Section 1 of Section 44 expired prior to 31.03.2023 then the notification dated 24.04.2023 extending the time limit for passing of an order under sub Section 9 of Section 73 would not be applicable, apparently so.
8. 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, therefore, we allow the writ petition and quash the impugned orders dated 05.10.2024 and 02.12.2023 issued by the Deputy Commissioner, State Tax, Sector 05, Lucknow
9. Consequences shall follow, accordingly. The accounts of the petitioner which have been freezed shall be de-freezed.”
4. However, Shri Rajesh Tiwari, learned Additional Chief Standing Counsel for the State has placed before us a Notification dated 21.07.2022 which was not brought to our notice while deciding the Writ Tax No. 264 of 2024. The said Notification reads as Under:-
“NOTIFICATION
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No.-596/XI-2-22-9(47)/17-T.C.187-U.P. Act-1-2017-Order-(249)2022 Lucknow: Dated: July 21, 2022
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In exercise of the powers conferred by section 168A of the Uttar Pradesh Goods and Services Tax Act, 2017 (U.P. Act no. 1 of 2017) (hereinafter referred to as the said Act) read with section 20 of the integrated Goods and Services Tax Act, 2017 (13 of 2017) and in partial modification of the notifications No.-445/XI-2-9(47)/17-U.P. Act-1 of 2017-Order-(118)-2020 dated 11.05.2020 and No.-496/XI-2-21-9(47)17-U.P. Act-1-2017-Order-(186)-2021 dated 28.06.2021, the Governor, on the recommendations of the Council, hereby,-
| (i) | extends the time limit specified under sub-section (10) of Section 73 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, in respect of a tax period for the financial year 2017-18, up to the 30th day of September, 2023. |
| (ii) | excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation under sub-section (10) of section 73 of the said Act for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of erroneous refund; |
| (iii) | excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation for filing refund application under section 54 or section 55 of the said Act. |
2. This notification shall be deemed to have come into force with effect from the 1st day of March, 2020.”
5. When we take into consideration the notification aforesaid what we find is that though by virtue of the Central Board of Direct taxes and Customs Notification dated 03.02.2018 the date for filing annual return for the financial year 2017-18 which would normally be 31.12.2018 stood extended till 05.02.2020 and based on the said 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 could have been passed by 05.02.2023 for the financial year 2017-18, however, in view of the Notification dated 21.07.2022 which came into effect from 01.03.2020 the said time limit specified under Sub-section 10 of Section 73 for issuance of order under Sub-section 9 of Section 73 of the U.P. GST Act, 2017, for recovery of taxes not paid or short paid or of input tax credit wrongly availed or utilized, in respect of a tax period for the financial year 2017-18, stood excluded up to the 30th day of September, 2023 and by the subsequent notification of the State Government dated 24.04.2023 which has been given effect from 31.03.2023 the said time limit stood extended till 31.12.2023 for the financial year 2017-18.
6. In the case at hand, the impugned order has been passed on 13.12.2023, therefore, it has been passed within the time limit as extended by the Notifications referred hereinabove. The said notifications are not under challenge.
7. The aforesaid notification dated 21.07.2022 was not brought to the notice of the Court while passing the order in Writ Tax No. 264 of 2024 otherwise the result may have been different.
8. Shri Rajesh Tiwari, learned Additional Chief Standing Counsel for the State says that a review application is proposed to be filed in said Writ Tax No. 264 of 2024 and in other similar matters where the benefit of the said judgment has been granted.
9. So far as the facts of the present case are concerned, the impugned order of assessment dated 13.12.2023 is not barred by time, therefore, the writ petition is not maintainable as remedy of appeal is prescribed against such an order.
10. The petitioner has not brought the said Circular on record.
11. In view of the above, the writ petition is dismissed.