Punjab And Haryana HC: Notice for Limitation Period Extension Under GST Section 168A

The government has received a notice from the Punjab and Haryana High Court regarding a plea that questions the extension of the limitation period under Section 168A of the GST Act.

A bench comprising Justice G.S. Sandhawalia and Justice Lapita Banerji has temporarily halted the issuance of final orders in Section 73 cases related to the fiscal year 2018-19.

Section 73 pertains to the determination of taxes unpaid, short-paid, erroneously refunded, or input tax credit wrongly availed or utilized, excluding cases involving fraud, willful misstatement, or suppression of facts.

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The petitioner relied on the ongoing case of M/s Midas Agro Foods Pvt. Ltd. vs. Union of India & others, scheduled for January 25, 2024, along with related cases. These cases challenge a circular dated November 20, 2017, where a stay was initially denied in numerous instances.

Subsequently, it was observed that the judgment of the Andhra Pradesh High Court, on which the denial of stay was based, had itself been stayed by the Apex Court on November 21, 2022, in SLP Diary No. 30552 of 2022. Consequently, the earlier stay issued on March 15, 2021, which prohibited coercive measures, has been weakened.

The petitioner contended that the show cause notices issued on December 27, 2023, about the financial year 2018–19, are time-barred. The challenge extends to the notifications dated March 31, 2023, and December 28, 2023, issued under Section 168A of the Central Goods and Services Tax Act, 2017.

These notifications extended the time limit for issuing orders under Section 73(10). The validity of this extension is currently under dispute in the Gujarat High Court in Ahmedabad, drawing support from the interim order dated December 21, 2023, in the case of M/s New Acid Baroda Pvt. Ltd. vs. Union of India, and the interim order dated November 17, 2023, from the Allahabad High Court.

The latter directed that proceedings based on the show cause notice may continue, but a final order should not be issued.

The petitioner asserted that the show cause notices issued on December 27, 2023, would be subject to the statute of limitations. In making this argument, the petitioner differentiated the current case from a previous set of cases where a stay was not granted.

Upon issuing the notice, the court clarified that proceedings may continue in the interim, but the final order should not be issued now.