A SHOW CAUSE NOTICE ISSUED BEYOND DUE DATE IS TIME BARRED AND INVALID: A.P. HIGH COURT

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A SHOW CAUSE NOTICE ISSUED BEYOND DUE DATE IS TIME BARRED AND INVALID: A.P. HIGH COURT

26/02/2025

A SHOW CAUSE NOTICE ISSUED BEYOND DUE DATE IS TIME BARRED AND INVALID: A.P. HIGH COURT

The petitioner is received a show cause notice, dated 30.11.2024, in relation to the financial year 2020-2021, calling upon the petitioner to show cause why an assessment should not be carried out in relation to short payment of tax etc. Notice was issued under Section 73 (1) r/w Rule 142 of the APGST Rules.

The aforesaid notice, is challenged by the petitioner in the present Writ Petition.

The contention of the petitioner is as follows:

Section 73 (10) of the APGST Act, stipulates that the assessment order, in relation to any assessment year, would have to be issued within three years from the due date for furnishing of annual return for the said financial year. Section 73 (2) of the APGST Act stipulates that the notice under sub-section (1) which initiates the assessment proceedings, would have to be issued at least three months prior to the time limit specified in sub-section (10) for issuance of the order.

A conjoint reading of these provisions would make it amply clear that the last date for issuance of a show cause notice, for the Financial Year 2020-2021 would be the 28th day of November, 2024. As the show cause notice has been issued on 30.11.2024, the same is beyond time and is non est.

The learned Government Pleader would contend that a “month” would mean “a calendar month”. As the 28th of February is the end of the month of February, the last date of issuance of a notice would have 1st of December, 2024 or at the worst 30th of November, 2024. As the notice has been issued on 30.11.2024, it would be within limitation. Further, the provisions of Section 73 (2) can at best be treated as a directory requirement and not a mandatory requirement whose violation would render the proceedings non est.

learned counsel for the petitioner would contend that the provisions of Section 73 (2) of the GST Act, are mandatory. He makes this submission on the ground that the word used in Section 73 (2) is “shall” and the same would have to be treated as a mandatory requirement.

He would also contend that the legislature, in its wisdom, had determined that there should be a minimum period available to the tax payer to set out its case in the case of any show cause notice being issued in an assessment proceeding.

He would draw the attention of this Court to Section 75 of the GST Act, which has certain inherent safeguards such as the requirement of a personal hearing and the facility of seeking adjournments thrice before a tax payer can be required to compulsorily attend before the authorities. He would submit that in such circumstances, the word “shall” would have to be understood to be a mandatory requirement.

Held That when a period, available for a certain action, is defined in terms of months, it would mean that the corresponding date of the corresponding month would be the cutoff date. In the present case, the cutoff date for issuing an order is 28.02.2025. The three months period which would elapse from this date would be 28.11.2024. Since the notice was issued on 30.11.2024, it would be beyond the time stipulated under Section 73 (2) of the GST Act.

Accordingly, this Writ petition is allowed quashing the show cause notice, dated 30.11.2024, issued by the 1st respondent, under Section 73 of the Central Goods and Services Tax Act and Andhra Pradesh Goods and Services Tax Act, 2017. There shall be no order as to costs.

ANDHRA PRADESH HIGH COURT

The Cotton Corporation of India V/S Assistant Commissioner (ST) (Audit) (Fac), State of Andhra Pradesh, Union of India

Honble Justice R. Raghunandan Rao and Harinath N., JJ.

W. P. NO. 1463 OF 2025

05.02.2025

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