GST Assessment Order Passed Beyond Statutory Three-Year Limit: Allahabad HC Quashes Order [Read Order]

In a recent ruling, the Allahabad High Court (Lucknow Bench) quashed a GST assessment order passed beyond the statutory time limit prescribed under Section 73(10) of the Uttar Pradesh GST Act, 2017.

Anita Traders, a proprietorship firm represented by its proprietor Aneeta Sharma, challenged the legality of the assessment proceedings initiated by the Assistant Commissioner, State Tax, Lucknow. The petitioner submitted that under Section 73(10) of the UPGST Act, an assessment order must be issued within three years from the due date for filing the annual return under Section 44(1).

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The petitioner submitted that since the due date for the financial year 2017–18 had been extended to 05.02.2020 by government notification, the last permissible date for issuing the assessment order was 05.02.2023. So, the assessment order dated 02.12.2023 was passed nearly ten months after the expiration of the statutory deadline.

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The department argued that a notification dated 24.04.2023 extended the time limit for assessments related to FY 2017–18 until 31.12.2023. The petitioner’s counsel pointed out that the said notification had a retrospective effect only from 31.03.2023. So, the statutory three-year period had already lapsed on 05.02.2023, the notification could not revive the time-barred authority to pass orders for FY 2017–18.

The Bench of Justices Rajan Roy and Om Prakash Shukla found merit in the petitioner’s argument. The court observed that similar issues had been adjudicated in a prior decision dated 12.11.2024 in Writ Tax No. 264 of 2024, where it was held that orders passed after the statutory limitation period are void.

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The court explained that the retrospective application of the 24.04.2023 notification was limited to cases where the limitation had not already expired before 31.03.2023. The court ruled that the assessment order and the corresponding show cause notice were passed without legal authority and were liable to be quashed. The court allowed the writ petition and directed that all consequential actions, including the freezing of bank accounts, be reversed.

To Read the full text of the Order CLICK HERE

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