Allahabad HC Quashes Assessment Order Passed Beyond Statutory Time Limit Under UP GST Act, 2017

The Allahabad High Court made an important decision to cancel a tax assessment order related to the Goods and Services Tax (GST). This ruling was based on the fact that the assessment order was made after the time limit set by the Uttar Pradesh GST Act, 2017.

The legality of the assessment proceedings started by the Assistant Commissioner of State Tax in Lucknow was contested by Anita Traders, a sole proprietorship represented by its owner, Aneeta Sharma.

The applicant argues that an assessment decision must be granted within three years of the annual return filing date specified in section 44(1) of the UPGST Act, as per section 73(10).

The applicant furnished that, as the deadline for the fiscal year 2017-18 has been extended to 05.02.2020 via the notification of the government, the last allowable date to issue the assessment order was 05.02.2023. Therefore, the assessment order on 02.12.2023 was passed approximately 10 months post expiry of the regulatory due date.

It was claimed by the department that a notification on 24.04.2023 extended the time limit for the assessment of FY 2017–18 until 31.12.2023. The counsel of the applicant cited that the said notification had a retrospective effect only from 31.03.2023.

Read Also: GST Notice Uploaded Under Wrong Tab: Allahabad HC Allows Fresh Assessment Notice

Therefore, the legal 3-year duration has lapsed earlier, dated 05.02.2023, the notification can revive the time restriction authority to pass the orders for FY 2017-18.

The bench of Justices Rajan Roy and Om Prakash Shukla determined that the applicant’s petition had validity. The Allahabad High Court pointed out that Writ Tax No. 264 of 2024, which was decided on November 12, 2024, had already addressed identical issues. It was established in the case that orders made after the statutory limitation period are considered void.

It was elaborated by the court that the retrospective application of the 24.04.2023 notification was restricted to the cases where the limitation had lapsed earlier before 31.03.2023.

It was held by the court that the assessment order and the related show cause notice (SCN) were passed without legal authority and were obligated to be quashed. The court permitted the writ petition and asked that all consequential measures, along with the freezing of bank accounts, be reversed.