Violation of mandatory Three-Month Limitation u/s 73: Delhi HC Quashes GST Notice [Read Order]
The court rejected the Revenue's argument of a 'technical glitch', clarifying that the three-month period prescribed under Section 73(2) of the CGST Act is mandatory and cannot be dispensed with.
![Violation of mandatory Three-Month Limitation u/s 73: Delhi HC Quashes GST Notice [Read Order]](https://images.taxscan.in/h-upload/2025/11/05/2102569-violation-of-mandatory-delhi-hc-gst-notice-taxscan.webp "Violation of mandatory Three-Month Limitation u/s 73: Delhi HC Quashes GST Notice [Read Order]")
The Delhi High Court has quashed a Show Cause Notice (SCN) issued by the Revenue, holding it to be barred by the mandatory limitation period under the Central Goods and Services Tax (CGST) Act, 2017.
The court rejected the Revenue's argument of a 'technical glitch', clarifying that the three-month period prescribed under Section 73(2) of the CGST Act is mandatory and cannot be dispensed with.
The petition was filed by C.H. Robinson Worldwide Freight India Private Limited, challenging the SCN dated 31st May 2024 for the Financial Year 2019-20. The dispute arose after the CGST Department, upon scrutinising the returns, issued the SCN raising a demand of over Rs. 11 crores for alleged wrongful availment of Input Tax Credit. Though the notice was dated May 31st, it was only served on the petitioner on 12th August 2024.
Counsel for the Revenue argued that a technical glitch prevented the issuance of the DRC-01 form on time and that the notice had been physically dispatched on 3rd June 2024. Per contra, counsel for the petitioner contended that the notice was served well beyond the three-month period mandated by Section 73(2), especially considering the extended deadline for passing the final order was 31st August 2024. It was also argued that the notice was sent to an outdated address.
The Revenue placed reliance on an internal instruction dated 2nd August 2024 regarding the technical glitch. However, the Court found that such administrative difficulties cannot override a mandatory statutory provision designed to protect the assessee's right to a fair hearing.
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A division bench comprising Justice Prathiba M. Singh and Justice Shail Jain held that the purpose of Section 73(2) is to provide a minimum of three months to the assessee to file a reply. The bench relied on its own prior decision in Tata Play Limited to hold that this period is mandatory.
The court found that the department's justification of a technical glitch was not tenable in law and that the service of the notice at an incorrect address further invalidated the department's claim of timely service. The court, on finding that the SCN was issued and served in violation of the mandatory limitation period, allowed the petition and quashed the impugned SCN and any consequential orders.
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