Kerala HC: Covid-19 ‘a force majeure’; Notifications extending time-limit for passing assessments not ultra-vires

Faizal Traders Pvt.Ltd vs Deputy Commissioner, Central Tax and Central Excise

Kerala HC upholds the validity of  Notification No. 13/2022-CT and Notification No. 09/2023, that extended the limitation period for passing assessment order u/s 73 for the FY 2017-18, finds that, same are not ultra vires the provisions of Section 168A of CGST/SGST Act; Observes that, these Notifications were issued purusant to SC directives in suo motu order, whereby a concious policy decision was taken to extend the limitation for issuance of orders in respect of demand linked with the due date of annual return, in view of impediments caused by Covid-19; Acknowledging that Covid-19 was a force majeure, and that Executive retains the discretion to extend the limitation period considering a force majeure event, finds “no substance” in assessee’s challenge that these Notifications issued u/s 168A are beyond CBIC powers as the force majeure was not present; HC elucidates that even if an order passed beyond the period of 3 years would become time-barred, the Govt is empowered to extend time limit u/s 168A, after considering the special circumstances during Covid-19 period, and therefore, dismisses assessee’s writ petition to that extent, while apprising that GST Council, in its 47th meeting took note of the effect of the Covid-19 pandemic and agreed with the recommendation of Law Committee; As regards challenge to the assessment order on ground that the benefit of Circular No.183/15/2022-GST was not provided to assessee, HC notes that the Circular was issued by the Govt itself to deal with the difference in ITC availed in Form GSTR-3B as compared to that detailed in Form GSTR-2A, during the initial phase of GST and thus, opines, “benefit of the said Circular should be given and the assessment order to be passed afresh”, and directs remand of matter to Assessing Authority to pass a fresh Assessment Order giving the benefit of aforesaid Circular.