Is CGST Notification No 14/2021 dated 1st May 2021, in partial contradiction of SC Orders on Extension of Limitation?

By Taxscan Team - On May 7, 2021 6:38 pm

The SC, in its order dated 27^th April 21 , in the case of Re Cognizance of Extension of Limitation, suo motu extended the general periods of limitation , due to the raging 2^nd wave of the pandemic,and restored its earlier order dated 23^rd March 2020 on the same . It had earlier passed similar orders on limitation , on 20^th March 2020, and on 8^th March 2021 . The original order dated 23^th March 2020, had extended all periods of limitation, till further orders. A further order was passed on 8^th March 2021, which sought to prescribe a finite limitation period ( discussed in the later paras) .However, the last and most recent order dated 27/4/2021, has again” restored “ the original order dated 23/3/2020 .

The CBIC/Finance Ministry, issued CGST Notfn dated 1^st May 2021, extending certain due dates and deadlines for CGST proceeding till 31^st May 2021 . It maybe noted that the SC order referred supra, preceded the CGST notification, hence the CBIC would be well aware of the SC orders

This article examines some aspects of prima facie incongruence and disharmony, between the SC order, and the CGST notification that followed it .

The relevant operative parts of the SC order dated 27^th April 2021, 1are reproduced below :

“…The extraordinary situation caused by the sudden and second outburst of COVID-19 Virus, thus, requires extraordinary measures to minimize the hardship of litigant–public in all the states. We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, whether condonable or not, ( emphasis added , as this will include tax laws like GST) shall stand extended till further orders.

It is further clarified that the period from 14th March, 2021 till further orders shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings( emphasis added , as this covers tax laws) outer limits (within which the court or tribunal can condone delay) and termination of proceedings. We have passed this order in exercise of our powers under Article 142 read with Article 141 of the Constitution of India. Hence it shall be a binding order within the meaning of Article 141 on all Courts/Tribunals and Authorities. …”

Thus, from the above extract, . following 2 points clearly emerge, apart from the extension of the limitation period itself , which is discussed in the next paragraph :

The orders clearly cover limitation periods and due dates for “proceedings “ for all general and special laws , including, by inference, Tax laws and CGST Acts in its ambit
The SC orders are passed under Article 142 /141. Article 141 states that the law declared by SC tobe binding on all courts and lower judicial and quasi judicial authorities

Prima Facie Contradiction/Incongruence between the SC orders with GST Notfn 14/2021 dated 1/5/2021

A conjoint reading of the SC orders dated 23^rd March 2020, 8th March 2021 , and the current order dated 27th April 2021, suggest that all limitation periods ( for all appeals /suits /judicial and quasi judicial proceedings under all laws ) which fall due any time after 14th March 2020 ( especially since the last order of 27th April 2021 , “restores” original order dated 20th March 2020) stand extended till further orders of SC , to be passed .

Conservatively, even if wejuxtapose all the 3 SC orders together, ( though the order dated 8^th March 2021 , which sought to end the indefinite extension of limitation vide the first order dated 20^th March 2020,now stands effectively superseded in large parts , with the most recent SC order dated 27/4/2021, “restoring “ the order dated 23^rd March 2020, ) the following picture emerges :

a. The period between 15^thMarch 2020- 14^th March 2021 shall stand excluded for calculating any limitation period

b. After such exclusion, all limitation periods that expired between 15.3.2020 to 14.3.2021, shall stand extended to the later of the following two outer time limits ( ref SC order dated 8^th March 2021)

90 days from 15/3/2021
Balance unexpired limitation period remaining , as per the relevant statute ( e,g CGST Act ) after excluding the entire period from 15/3/2020 to 14/3/2021 )

( ref the earlier SC order dated 8^th March 2021)

But, since well before expiry of 90 days from 15/3/2021 ( which is 13^th June 2021 ) , the last and most recent SC order dated 27^th April 2021 has now again restored SC’s first order dated 23^rdMarch 2020, limitation period of all proceedings that expired any time after 15^th March 2020, now stand extended and postponed till further orders of the SC, which are awaited as on date, and may be passed only after the pandemic situation improves

GST Notification no 14/2021 dated 1^st May 2021

On the other hand, the GST Noftn no 14/2021 dated 1/5/2021 , specifically extends the statutory due dates for various GST proceedings, ( incl , inter alia, filing of appeals, refund application ) falling only falling within the limited period 15^th April 21 to 30^th May 2021, to 31^st May 2021.

Thus , for example , if the time limit of filing a refund application expires on 10^th April 2021, ( without being filed ) the CBEC notfn will treat it as time barred as it precedes 15^th April 2021 , though this is well within the extension granted by the SC order

. Similarly, even if the due date for such a transaction expires , say , on 1^st May 2021, it will be extended vide the GST notfn, only till 31^st May 2021, even if the SC does not pass its further orders by 31^st May 2021)

Prima facie, this seems to contradict the SC orders cited supra , ,( the extensions mandated by which, are much wider in scope, and indefinitely extended till” further orders”to be passed by the SC itself , unless the CBIC is planning further piecemeal extensions even from 31^st May onwards , after the current relaxations till 31^st May, expire. However, such piecemeal extensions even if envisaged for future, , keep the assessee on tenterhooks, and do not allow much scope for long term planning of activities , which are anyway adversely impacted by the raging 2^nd wave of the pandemic

Specific Exclusions from Relief, by the Notfn No 14/2021 CGST dated 1/5/2021

Further, the said GST Notfn also specifically excludes the following from the scope of its limited extension till 31st May2021 , probably because it has construed these to be mere compliance transactions , not falling within the scope of “ judicial and quasi/judicial proceedings”:

Chapter IV of CGST Act: Time and Value of Supply
Section 10(3): Composition Scheme option lapsing upon exceeding the threshold
Section 25: Procedure for Registration
Section 27: Special provisions for casual taxable person, non-resident taxable person
Section 31: Tax Invoice
Section 37: Furnishing details of outward supplies –GSTR-1
Section 47: Levy of Late fee
Section 50: Interest
Section 69: Power to Arrest
Section 90: Liabilities of Partner of firm to pay tax
Section 122: Penalty of certain o‑ences
Section 129: Detention, seizure and release of goods and conveyances in transit
Section 39 except (3),(4) & (5): Furnishing of Returns (except GSTR-5,6,7)
Section 68: Inspection of goods in movement in so far as e-way bill is concerned

Conclusion

Finally , It may be again reiterated that the SC orders are passed invoking powers under Article 141 , which is founded on the principle of “stare decisis “. Hence , in the event of a conflict in interpretation in actual situations , we do hope that this same principle of stare decisis will be respected by the concerned authorities, and the more liberal limitation periods prescribed by the SC orders, be allowed to prevail .