The Telangana high court in a recent ruling upheld the notifications issued by GST authorities, extending the timeframe for issuing show-cause notices related to tax recovery and input tax credit matters for the financial year 2019-20.
The ruling was addressing over 300 petitions from various business entities in the state. The petitioners challenged the notifications, arguing that under the GST Act, show-cause notices must be issued within three years from the due date for filing the annual return. They contended that the notices, set for May 31, 2024, exceeded this timeframe, and that extensions should only be granted in cases of force majeure, not due to administrative difficulties.
The petitioner argued that time limit can be extended only under force majeure conditions (acts of God or greater force), not because of administrative challenges.
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The relaxations and extensions granted during Covid-19 are no longer applicable, as the deadline for completing or complying with any action was extended only until June 30, 2021.
Senior counsel Dominic Fernandes, representing the Central Board of Indirect Taxes, argued that the petitioners had benefited from extensions for tax payments during the same period.
After hearing arguments from both parties, the high court decided not to interfere with the notifications and show-cause notices. The court dismissed the petitions but preserved the petitioners’ right to file statutory appeals against the notices.
Complete Supreme Court Judgment on GST from 2017 to 2024 with Free E-Book Access, Click here
A division bench, comprising Justices Sujoy Paul and G. Radha Rani viewed that the COVID-19 Pandemic created extraordinary difficulties which could not have been anticipated, measured and solved with mathematical precision. COVID-19 was not a creation of Government. Thus, hair-splitting in many aspects must be eschewed.
The court held that period between 15.03.2020 to 28.02.2022 stood excluded for limitation as per Supreme Court’s order, remaining points raised by the petitioners relating to legality of impugned notifications need not be dealt with.
In this batch of matters, admittedly, the petitioners have a statutory efficacious alternative remedy of appeal. The court held that the petitioners may avail the statutory remedy of appeal.
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