Notification extending period of Limitation for GST Notices for Non-Fraud cases constitutionally void?

The Central Board of Direct Taxes and Customs vide Notification number 56/2023- Central Tax dated 28th December, 2023 have extended period of Limitation for passing GST Assessment Order u/s 73(10) for Non-Faud Cases from 31st March 2024 to 30th April 2023 for FY 2018-19. This also means that the period of Limitation for issuance of Show Cause Notice u/s 73 has been extended from 31st December 2023 to 31st January 2024.

[Breaking] Due Date for passing GST Order u/s 73 extended to 30th April 2024

The notification reads as follows:

S.O. 5483(E).—In exercise of the powers conferred by section 168A of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017), and section 21 of the Union territory Goods and Services Tax Act, 2017 (14 of 2017) andin partial modification of the notifications of the Government of India, Ministry of Finance (Department of Revenue), No. 35/2020-Central Tax, dated the 3rd April, 2020 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 235(E), dated the 3rd April, 2020 and No. 14/2021-Central Tax, dated the 1st May, 2021 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 310(E), dated the 1st May, 2021 and No. 13/2022-Central Tax, dated the 5th July, 2022, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 516(E), dated the 5th July, 2022, and No. 09/2023-Central Tax, dated the 31st March, 2023 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), vide number G.S.R. 1564(E) dated the 31st March, 2023, the Government, on the recommendations of the Council, hereby, extends the time limit specified under sub- section (10) of section 73 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, relating to the period as specified below, namely:

(i) for the financial year 2018-19, up to the 30th day of April, 2024;

(ii) for the financial year 2019-20, up to the 31st day of August, 2024.

The period of limitations at glance:

The government has exercised this power using Section 168A of the Central Goods and Services Tax Act, 2017. Let’s see what this section says:

168A. Power of Government to extend time limit in special circumstances.-

(1) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions which cannot be completed or complied with due to force majeure.

(2) The power to issue notification under sub-section (1) shall include the power to give retrospective effect to such notification from a date not earlier than the date of commencement of this Act.

Explanation. – For the purposes of this section, the expression “force majeure” means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act.

Conclusion:

• As per the reading of the section, the power of extending period of limitation can be extended only in cases of “force majeure” which means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act. No Such situations prevail in our country at this time.
• The Period of Limitation can be extended on the recommendations of the GST Council, however, no such recommendations were made by Council or made public.
• This makes the notification extending the period of limitation for non-fraud cases questionable. What is your opinion? Do write to us.