Calcutta High Court Upholds GST Order Uploaded A Day After Limitation Expired

The Calcutta High Court has upheld a GST adjudication order even though its summary was uploaded on the common portal a day after the limitation period expired. The court held that the statutory limitation applies to the issuance of the order and not to its subsequent service.

Justice Raja Basu Chowdhury dismissed a writ petition filed by M. M. Motors and another challenging an adjudication order for the 2018–19 tax period. The petitioners argued that the adjudication order could not be treated as having been validly issued within the limitation period because its summary in Form GST DRC-07 was uploaded only after the prescribed period had expired.

“The period of limitation is confined to the issuance of the order and not on the service thereof and lastly on the third issue, since, the act of making an order is distinct from the act of service having regard to the scheme of the said Act as noted above, the factum of issue cannot be interlinked to service for the order to be complete.”, the court ruled.

The proceedings began with a show cause notice issued on December 20, 2023. The adjudicating authority digitally signed the final order on April 30, 2024, the last day of the extended limitation period. Its summary was uploaded on the common portal on May 1, 2024.

M. M. Motors contended that an adjudication order becomes complete only after it is communicated in the manner prescribed under the GST Act and Rules. Relying on decisions under the Income Tax Act concerning reassessment notices, it submitted that the expressions "issue" and "service" should be treated interchangeably. It further argued that an order not communicated within the limitation period could not be regarded as having been validly issued.

The state argued that the GST law requires only that an order be issued within the prescribed limitation period. It submitted that the manner of serving orders is governed separately under the Act. According to the State, uploading an order on the common portal is only one of the recognised modes of service.

Accepting the State's submissions, the court examined the statutory scheme of the GST Act and found that it consciously distinguishes between issuing an order and serving it. It observed that issuing an order marks the completion of the adjudicatory function, while communication of the order is governed separately by the provisions relating to service.

“The statutory scheme of the said Act appears to distinguish between the act of issuing the orders under Section 73(9) and the act of serving the order, which is provided for in Section 169 of the said Act. While the former confirms the completion of adjudicatory function within the prescribed period of limitation, the latter concerns the manner in which the order is required to be communicated.”, the court observed.

It added, "Since the provision of limitation has been attached to the issuance of a showcause notice under Section 73(1) and an order under Section 73(9) of the said Act, without providing for limitation in the manner of service of such order, in my view, the petitioners cannot be permitted to impeach the order on the ground that the order though was issued within the period of limitation was served after the statutory period for making the orders"

Subsequently, the court held that the decisions relied upon by M. M. Motors under the Income Tax Act did not assist its case because they dealt with reassessment notices under a different statutory framework.

It observed that the GST law deliberately uses the expression "issue" in relation to adjudication orders while separately providing for service.

Referring to the Supreme Court's decision in Safari Retreats, the court reiterated that interpretations borrowed from other taxing statutes should not ordinarily be imported while construing the GST Act.

Since the adjudication order had been digitally signed on April 30, 2024, within the extended limitation period, the court held that uploading its summary on the common portal the following day did not render it void or time-barred.

For the Petitioners: Advocates Ankit Kanodia, Megha Agarwal, Piyush Khaitan and Tulika Roy

Amicus Curiae: Senior Advocate Sudhir Kr. Mehta,

For the State: Anirban Ray, Learned Government Pleader, Mr. Md. T. M. Siddiqui, Learned Additional Government Pleader and others.