GST UPDATE ON CLARIFICATION REGARDING EXTENSION OF LIMITATION UNDER GST LAW IN TERMS OF ORDER OF SUPREME COURT

In the view of the Covid 19 situation the Supreme Court had issued an order dated 23^rd March 2020 and on 27^th April 2021 declaring that the period from 15^th March 2020 till further orders, shall not be taken into consideration for counting the period of limitation prescribed under any general or special laws. Further, The Central Government, exercising its power under Section 168A of the CGST Act, 2017, vide Notification No. 35/2020-CT dated 03.04.2020, granted general extension for compliance under the CGST Act, 2017, IGST Act, 2017 and UTGST Act, 2017.Extension has been made applicable to appeals which were due to be filed between20^th March, 2020 to 29^th June, 2020. Many authors have opined that notification cannot go beyond Apex Court verdict. Hence, the impugned notification is not legally sustainable. Many associations have made representations in this regard to CBIC.
CBIC recently vide circular no. 157/13/2021-GST dated 20^th july,2021 have given the clarification regarding extension of time limit in GST Law in terms of decision of Supreme Court dated 27.04.2021.The council has provided following clarifications :-
1.     The extension granted by Supreme Court extend only to the judicial and quasi- judicial proceedings in the nature of appeal/suits/petitions etc. and does not extend to every action or proceedings under CGST Act.
2.     The order of Supreme Court apply to the appeals, reviews, revisions etc., and not to original adjudication i.e. in case of any SCN is issued to taxpayer than this extension of time limit will not apply.
3.     This Verdict of Highest Court of India will apply only to the judicial and quasi-judicial proceedings which need to be pursued within a time limit as provided in law. In case there is no limit given in the law than the order of extension will not apply.
4.     The proceedings which are under process (judicial or quasi-judicial which requires to be heard and disposed off) are need to disposed off via physical/virtual mode based on prevailing policies within the time limit.
5.     The following actions such as scrutiny of returns, issuance of summons, search, enquiry or investigations and even consequential arrest in accordance with GST law would not be covered by the judgment of the Hon’ble Supreme Court.
6.     It will not apply with regard to issuance of SCN, replies and passing order as the order applies only to the petition/applications/suits etc.

The circular says that the proceedings need to be initiated and compliances that are need to be done is to be done within specified time given in statue. The tax authorities will continue to dispose the proceedings like application of refund or application related to revocation or cancellation of registration without any extension of time limit.
              The board by providing the such kind clarification have invited the     litigation as the time limit has been extended only to the appeals reviews and revision and no limit has been extended for SCN, replies, order passing of petition etc. even though the assesses was facing same problem due to COVID -19. This is not logical as well as legally sustainable. Taxpayers, who are going to file appeal, will be giving extension in limitation due to COVID pandemic. But taxpayers, who are filing refund or reply to show cause notice or revocation of cancellation of registration or filing returns, are not suffering from pandemic and has to do compliance within time limit. CBIC is inviting unnecessary litigation and the technical interpretation of this judgement will invite litigation. Moreover, such relaxations have been provided only to the assesse not to the department in case of departmental order or appeal. Govt. should have taken a liberal view by covering other situations in providing extension of time limit and follow the ratio decindandia of Apex Court decision.

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GST UPDATE ON CLARIFICATION REGARDING EXTENSION OF LIMITATION UNDER GST LAW IN TERMS OF ORDER OF SUPREME COURT

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