The CBIC issued a new circular no. 157/13/2021 on 21st July 2021. The circular clarifies the extension of limitation under the Goods and Services Tax (GST) law regarding the Hon’ble Supreme Court’s (SC) Order dated 27th April 2021.
The SC issued an order in April 2021 directing that the limitation period be extended till further orders for all the judicial and quasi-judicial proceedings under any general or special laws. The apex court granted this extension irrespective of condonation of the proceedings under such laws.
Further, the limitation period excludes the period from 14th March 2021 till further orders for Indian statutes such as the Commercial Courts Act, 2015, the Arbitration and Conciliation Act, 1996, the Negotiable Instruments Act, 1881 and similar laws. It applies to the initiation or termination of the proceedings and setting the outer limits. The SC passed this order by exercising powers given to it under the Indian Constitution. Hence, it is binding on all the courts, tribunals and judicial authorities across India. It also restored its previous order for extension of the limitation period issued on 23rd March 2020.
After that, the CBIC has presently clarified its applicability in this circular by classifying all the GST compliances and actions into three types, as given below-
- Firstly, for any compliance and proceedings yet to be done or initiated on the taxpayers by assessing officers, the time limit continues to be governed by the law and the CBIC notifications. Hence, the Supreme Court’s Order will not apply to such actions.
- Secondly, the GST assessing officers can hear and dispose of any quasi-judicial proceedings as per the time limit prescribed by the law and the CBIC notifications issued from time to time. The SC Order does not apply here. For instance, application for revocation of cancelled GST registration, adjudication proceedings of demand notices, and disposal of the refund applications in form RFD-01.
- Lastly, the time limit to file appeals against the quasi-judicial orders or revisions or rectifications stands extended in line with the SC order till the issue of further orders. The authorities also include the Joint/Additional Commissioner (Appeals), the Commissioner (Appeals), and the Appellate Authority for Advance Ruling.
In general, a limitation period under any law refers to a legally mentioned period after which an action cannot be taken or stands defeated or a property right lapses. Hence, where there is a time limit given for judicial action under a specific law, the General Law of Limitation also allows three years from the accrual date of cause of action as the period within which the plaintiff must exercise his entitled right. However, it is decided by judicial authority as a mixture of facts and law.
The Supreme Court took up an interlocutory application by an SC advocate in April 2021 on this matter in the event of the second wave of the COVID-19 pandemic and passed the above order.
Accordingly, with the latest SC Order on hand, the GST Council had deliberated on this matter and added a note stating that “Wherever the timelines for actions stand extended by the Hon’ble Supreme Court, it shall apply.” in its 43rd GST Council meeting press release dated 28th May 2021.
Meanwhile, the CBIC had recognised the difficulties of taxpayers and had extended timelines of various actions and compliances under the GST law up to 30th June 2021 vide the CGST notification no. 14/2021, later amended on 1st June 2021.
However, the CBIC received various representations about the applicability of the SC Order for the current proceedings, which has now been clarified through this GST circular.
For any clarifications/feedback on the topic, please contact the writer at annapoorna.m@cleartax.in
Annapoorna, popularly known as Anna, is an aspiring Chartered Accountant with a flair for GST. She spends most of her day Singing hymns to the tune of jee-es-tee! Well, not most of her day, just now and then.
