Three Year Limitation Period u/s 73(10) of GST Act begins from Filing Date of Annual Return, Not Extended Due Date: Patna HC [Read Order]

The Patna High Court has ruled that the demand order under Section 73(10) of the GST ( Goods and Services Tax ) Act must be issued within three years from the filing date of the annual return and not the extended due date.

The bench of Chief Justice K. Vinod Chandran and Partha Sarthy, held that the extension provided under Section 44(2) only applies to the filing of returns, not for the proceedings under Section 73(10) of GST legislation.

The petitioner argued that under Rule 80 of the Central Goods and Services Rules, 2017, the due date for furnishing the annual return is December 31 following the end of the financial year.

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According to Section 73(10), any proceedings must be initiated within three years from the due date for filing the annual return. In this case, the petitioner contended that the three-year period for the 2018-19 assessment year ended on 31.12.2022, as the return was filed before 31.12.2019.

However, the Assistant Solicitor General (ASG) pointed out that the due date had been extended twice—first to 31.10.2020, and then to 31.12.2020—due to the Supreme Court's order extending the limitation period for fillings affected by the COVID-19 pandemic. As per this extension, the ASG argued that the three-year period would expire on 28.05.2022, and the proceedings initiated in April 2024 were still valid.

The court clarified that the three-year period under Section 73(10) is calculated from the original due date of filing the annual return, not from any extended deadlines.

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It also noted that the extension notifications issued by the Commissioner did not have the authority to extend the statutory period for filing returns under Section 44(2). 

The court further noted that the proviso under Sub-section (2) gives the Government the power to issue a notification, but the notification presented before the court, dated 28.10.2020, was issued by the Commissioner, who does not have that authority.

The notification was issued under the proviso to Section 44(1) of GST Act, which allowed the Commissioner to exempt certain groups of registered persons from filing annual returns. However, it does not give the Commissioner the power to extend the due date for filing annual returns or the period allowed under Sub-section (2) for filing those returns.

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The court granted an interim stay on the GST assessment order and directed that any counter affidavits be filed within three weeks. The matter has been postponed to October 26th 2024 for further consideration.

Mr. D.V.Pathy, Advocate appeared for the petitioner. Dr. K.N.Singh, ASG,  Mr. Anshuman Singh, Sr. SC, CGST & CX, Mr. Devansh Shankar Singh, Advocate and Mr. Abhijeet Gautam, AC to ASG appeared for the department.

To Read the full text of the Order CLICK HERE

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