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The CBIC vide Notification No. 56/2023 – Central Tax dated December 28, 2023 has extended the time limit specified u/s. 73(10) of the CGST Act for issuance of orders till April 30, 2024 for the F.Y. 2018-19 and till August 31, 2024 for the F.Y. 2019-20. Thus, effectively, the Revenue Department has time till January 31, 2024 for issuance of Show Cause Notices (u/s. 73 of the CGST Act) for the F.Y. 2018-19 and till May 31, 2024 for the F.Y. 2019-20.
The aforementioned notifications have been issued by the CBIC, by virtue of powers conferred by Section 168A of the CGST Act. Notably, Section 168A empowers the Government to issue notifications to extend time limits prescribed under the CGST Act, specifically in cases where compliance is hindered due to force majeure. The section explicitly defines force majeure as instances such as war, epidemic, flood, drought, fire, cyclone, earthquake, or any other calamity affecting the Act's provisions.
Interestingly, Section 168A starts with a non-obstante clause. Thus, the time-limit prescribed under the Act can only be extended in special circumstances laid down under the said section. It is clear from reading Section 168A that it can only be invoked when required actions cannot be completed due to force majeure events. It is well settled principle that force majeure cannot be claimed just because something is difficult to do; the Department has to show that it was impossible to carry out the required functions.
Currently, there is no force majeure situation happening in the country, and the notifications extending time limits do not mention force majeure reasons. Also, the impact of COVID-19 has passed, and the Supreme Court has not granted further extensions to taxpayers. This raises the question of whether the Department can issue such notifications under Section 168A without force majeure circumstances. It would be pertinent to note that the previous Notification issued u/s. 168A, extending the time-limit for issuance of notices, has been challenged before the Allahabad HC in RE: Graziano Transmissioni [[Writ Tax No. 1256 of 2023]. It would be interesting to see the outcome of the said case.
The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.
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