Petitions pile up as GST notices come after 3 years of returns filing

A large number of businesses, which received goods and services tax (GST) notices in December 2023 and January this year due to the extension of the deadline for the issuance of notices, have moved various high courts questioning the legal validity of the notices. Some high courts have issued notices to the Centre and asked it not to take coercive action against the taxpayers, said people with knowledge of the matter. Multiple petitions involving about 800 taxpayers have been filed across the country, they said.

According to the GST law, notices have to be sent out within three years of filling the return. While the deadline was extended for the first time due to Covid-19, the Central Board of Indirect Taxes and Customs later extended the date multiple times. Recently, the deadline was extended for issuance of notices for 2018-19 to April 30, and for 2019-20 to August 31, resulting in a spate of notices to taxpayers.

The HCs of Guwahati, J&K and Ladakh, Rajasthan and MP, which are hearing such cases, have stayed the tax demands. "Industry is watching closely to see if the courts prioritise flexibility or stricter enforcement of force majeure conditions," said Saurabh Agarwal, tax partner, EY. The revenue authorities have defended their stance, maintaining that all the extensions were done after the approval of the GST Council. "While the statutory GST provisions provide for extension of timelines for issuance of show-cause notices and orders, the GST Council has categorically defined the circumstances under which timelines can be extended," said Abhishek A Rastogi, founder of Rastogi Chambers.


Accordingly, any notification issued beyond the statutory framework will have to be tested in a court of law, said experts. "Monitoring the development of these cases will be crucial to determine legitimacy of demand orders issued between January and August this year, particularly in the context of the interpretation of 'force majeure' in these cases," said Mahesh Jaising, leader-indirect tax, Deloitte India.