Time Limits Matter: Section 73 Orders Quashed for FY 2017-18

Section 73 Time Limits: Why the Allahabad HC Quashed FY 2017-18 Orders

⚡ The Core Issue: Section 73 Orders & Time Limits

In a landmark ruling, the Hon’ble Allahabad High Court in M/s. AV Pharma v. State of UP [Writ Tax No. 264 of 2024] clarified that time limits under Section 73 of the Central Goods and Services Tax Act, 2017 (“CGST Act”) are crucial. The Court held that any notification extending time limits is inapplicable if the original time limit had already expired.

📊 Facts of the Case

• Petitioner: M/s. AV Pharma (Proprietor)
• Orders Challenged:
  • October 5, 2024 (Form GST DRC-13)
  • December 2, 2023 (Form GST DRC-07)
• Disputed Period: FY 2017-18
• Key Argument: The orders were passed beyond the 3-year time limit set by Section 73(10) of the CGST Act, which expired on February 5, 2023.

🧐 The Legal Question

Would the notification extending the time limit for Section 73 orders apply if the original time limit had already lapsed?

🚶‍♂️ The Court’s Decision

The Allahabad High Court’s verdict revolved around these key points:

1. Time Limit Expiry:
   • The deadline for passing orders under Section 73 for FY 2017-18 expired on February 5, 2023.
2. Notification Date:
   • The State Notification No. 515/XI-2-23, effective March 31, 2023, came after the time limit had already expired.
   • This notification was based on Central Government Notification No. 09/2023 – Central Tax dated March 31, 2023.
3. Retrospective Effect Inapplicable:
   • Since the notification came into effect after the original deadline, it could not revive expired time limits.
4. Outcome:
   • The Court quashed the orders passed beyond the prescribed limit, upholding the validity of Section 73 time limits.

📊 Why This Matters

This ruling reinforces the significance of adhering to statutory time limits in GST proceedings. Tax authorities cannot rely on retrospective notifications to justify orders issued after the deadline. Taxpayers can now confidently challenge orders passed beyond these time frames.

❓ Key Takeaways