Article 73 of the Central Goods and Services Tax Act grants authority to authorized officers for the assessment of tax liability, interest, and penalties. Despite the initial three-year timeframe, subsequent amendments and notifications have prolonged deadlines, giving rise to discussions and legal controversies.
The inclusion of Section 168A in the 2020 amendment provides the government with the ability to extend limits in cases of force majeure. Nevertheless, challenges arise from the retrospective application and interpretations of the term "force majeure," contributing to complexities and disputes, as evidenced by recent legal cases.
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Section 73 of the Central Goods and Services Tax Act confers authority upon the designated officer to assess tax liability, interest, and penalties. Subsection (10) initially sets three years for issuing orders, yet this temporal limitation has been subject to amendments via GST notifications.
For instance, the original time limit for FY 2018-2019 was 31.12.2023, extended to 31.03.2024 (Notification No. 09/2023–Central Tax Dated: 31/03/2023) and later to 30.04.2024 (notification, No. 56/2023-Central Tax, dated the 28th December, 2023). For FY 2019-20, the original deadline of 31.03.2024 was extended to 30.06.2024 (Notification 09/2023) and then to 31.08.2024 (Notification 56/2023).
These extensions result from the 2020 amendment's introduction of Section 168A, which grants the government, based on Council recommendations, the authority to extend time limits due to force majeure. The retrospective applicability of this section, dating back to the Act's commencement, introduces complexities, particularly for years devoid of any force majeure events.
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The term "force majeure" encompasses occurrences such as earthquakes and pandemics. A debate arises regarding whether the clause "or otherwise affecting the implementation of any provisions of the Act" permits the government to extend limitations even in the absence of calamities. Some argue that this interpretation confers unchecked power for extensions unrelated to pandemics or earthquakes. However, legal principles like Ejusdem generis and Noscitur a sociis suggest that the phrase "or otherwise" should be construed in conjunction with the preceding words, confining extensions to extraordinary circumstances.
Legal disputes, exemplified by recent cases such as M/s Garg Rice Mills vs State of Punjab CWP 1138 of 2024 in the Punjab and Haryana High Court, and cases in the Gujarat High Court involving M/s SRSS Agro Pvt. Ltd. and M/s New India Acid Baroda Pvt. Ltd., underscore the challenges posed by the second extension of GST notice time limits under Section 168A. These cases shed light on arguments against unrestricted time limit extensions.
Closure: The complexities stemming from amendments and interpretations in the context of time limit extensions under Section 73 of the CGST Act highlight the challenges faced. The incorporation of Section 168A, designed to tackle force majeure situations, has sparked legal disputes and discussions regarding the extent of extensions. Current legal cases offer valuable perspectives, illustrating arguments opposing unrestricted time limit extensions and underscoring the importance of clarity and meticulous interpretation when dealing with the intricacies of GST notice time limits.
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