Section 74(10) GST Act | Starting Point For GST Demand Limitation 'Debatable': Delhi High Court Declines Writ
The Delhi High Court has refused to exercise its writ jurisdiction to examine a dispute regarding the starting point for computation of limitation period under Section 74(10) of Central Goods and Services Tax Act, 2017.
The Division Bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar held that it was “debatable” as to which limb of Section 74(10) would apply in the facts of the case and relegated the petitioner to the alternative remedy of appeal.
Petitioner-company had challenged an order dated March 28, 2026, contending that it was required to be passed within five years from the date of the erroneous refund under the latter limb of Section 74(10) of the CGST Act.
It was argued that since the order was passed beyond this period, the High Court should entertain the writ petition despite the availability of an appellate remedy.
Revenue, however, submitted that the Petitioner had been subjected to an audit under Section 65 of the CGST Act, during which it came to the Department's notice that an erroneous refund had been granted. It contended that the first limb of Section 74(10) was applicable, under which the five-year period was to be computed from the due date for furnishing the annual return for the relevant financial year.
The Department submitted that the relevant financial year was 2019-20 and that the due date for furnishing the annual return had been extended first till February 28, 2021, and thereafter till March 31, 2021.
Petitioner however disputed that the matter was a case of audit and contended that it was a case of adjudication.
The High Court observed that Section 74(10) contemplates different starting points for computing limitation depending on the nature of the demand.
In the facts of the present case, the dispute was with respect to the applicable starting point for computation of the period of limitation under the said provision.
“Determination of the aforesaid issue would require examination of the nature of the demand, the underlying proceedings and the factual foundation of the adjudication. In these circumstances, this Court is not inclined to examine the said issue in exercise of its writ jurisdiction,” the court ruled
For Petitioner: Senior Advocate Kavita Jha, along with Advocates Shammi Kapoor and Sandeep Gupta.
For Respondents: Standing Counsel Akash Verma, with Advocate Aanchal Uppal.