Category GST

Hon’ble Supreme Court Order on Extension of Limitation period:

1. In view of the Covid-19 pandemic the Hon’ble Supreme Court took suo motu cognizance of the situation arising from difficulties that might be faced by the litigants across the country in filing petitions/applications/suits/appeals/all other proceedings within the period of limitation and in furtherance of its Order dated 23 March 2020; issued another Order dated 8 March 2021^[1] wherein the Hon’ble Court in view of Covid-19 pandemic provided following directions:

• In computing the period of limitation for any suit, appeal, application or proceeding, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2020, if any, shall become available with effect from 15.03.2021.

• In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply

2. However, once again due to ongoing rise in Covid-19 cases, the Hon’ble Supreme Court in furtherance thereof, have issued Order dated 27 April 2021 wherein the Court restored its earlier Order dated 23 March, 2020 thereby extending the period of limitation until further orders^[2] under both general and special laws.

3. One of the questions which arise is whether the above directions of Hon’ble Court would also apply to indirect tax matters. As the above Order extends the period of limitation under both general and special laws, it could be very well concluded that it shall also apply to indirect tax matters.

Limitation period under Goods and Service Tax (‘GST’):

4. The Central Board of Indirect Taxes (‘CBIC’) has issued Notification^[3] in exercise of the powers conferred under Section 168A of the Central Goods and Service Tax Act, 2017 (‘CGST Act’) granting following relief for completion / compliance by any authority or any person (viz., Passing order, issuance of notices, filing of appeal, reply or application or furnishing of any report, etc.

• Extension of time limit for completion / compliance of any action notified under the GST law which falls during the period 15 April 2021 to 30 May 2021 to 31 May 2021.

However, such relief is not available for actions falling under certain provisions mentioned in the exclusion list for Time of Supply, Registration, filing of GST Returns, issuance of Tax Invoice, Levy of Interest and Late fee, E-way bill, penalties, Arrest, Detention / Seizure etc.

• The time limit for completion of any action in relation to verification of registration applications by the tax authorities falling between 1 May, 2021 to 31 May, 2021 has been extended upto 15 June, 2021.

• Time limit for passing an Order, where notice for rejection of refund claim has been passed, which falls between 15 April, 2021 to 30 May, 2021 has been extended to fifteen days from receipt of reply from the registered person or 31 May, 2021, whichever is later.

Question under consideration:

5. The moot question arises is whether the taxpayer can take recourse to Hon’ble Supreme Court Order to file an appeal who have failed to do so by 31 May 2021 or in whose case the time limit to complete the action i.e., filing the appeal does not fall within the period 15 April 2021 to 31 May 2021?

Our Analysis:

6. It is pertinent to note that the above Orders have been issued by Hon’ble Supreme Court in exercise of powers under Article 142 read with Article 141 of the Constitution of India and are therefore binding on all Courts/ Tribunal and authorities.

7. Further, the notification issued under GST is in exercise of powers under Section 168A^[4] of the CGST Act, 2017 which grants power to Government to extend timelines in Special Cases i.e., due to force majeure and the expression “force majeure” as provided in Explanation to said section means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of the Act.

8. Therefore, it needs to be evaluated whether the notification issued under statutory provisions contained in GST is in contradiction to the directions issued by Hon’ble Court under Article 142 of the Constitution. In this regard, reference could be drawn to the judgement of Supreme Court in Delhi Judicial Service Assn vs State of Gujarat^[5] wherein it was held as under:

“No enactment made by the legislature can limit or restrict the constitutional power of the Supreme Court under Article 142, though the Court must take into consideration the statutory provisions regulating the matter in dispute.”

The above view was reaffirmed by the Court in Union Carbide Corporation Etc. Vs Union of India^[6]  wherein the Court held that:

“The proposition that a provision in any ordinary law irrespective of the importance of the public policy on which it is founded, operates to limit the powers of the Supreme Court under Article 142(1) is unsound and erroneous. … Perhaps, the proper way of expressing the idea is that in exercising powers under Article 142 and in assessing the needs of ‘complete justice’ of a cause or matter, the Supreme Court will take note of the express prohibitions in any substantive statutory provision based on some fundamental principles of public policy and regulate the exercise of its power and discretion accordingly.”

Although statutory provisions are not a limitation for exercise of constitutional powers by the Supreme Court under Article 142, the Court while exercising such power to do complete justice must consider them. In the present case, the directions have been issued to minimize the hardship faced by litigants-public which would have arisen in case of lapse of proceeding on account of being time-barred, thus, even though the notification provides a specific time limit, the vires of notification can be subject to challenge before the Courts on account of the specific Order of Hon’ble Supreme Court issued under Article 142 of the Constitution.

9. Further, we would also like to highlight that an Instruction was issued by the Ld. Principal Secretary/ Commissioner of Commercial Tax, Chennai^[7] with respect to cancellation of registration under Section 29 of CGST Act, 2017 wherein relaxation (to apply for Revocation of Cancellation) is provided to taxpayers in light of Supreme Court Order. The Instruction further states that the said suo moto Order binds the Proper Officer (being quasi–judicial authority) as well as the Deputy Commissioner, GST Appeals & Joint Commissioner, GST Appeals (being judicial authorities).

Conclusion:

10. Therefore, in our opinion the taxpayer can take a recourse to Hon’ble Supreme Court Order in case the taxpayer is unable to comply with the timelines or where the period of complying/ completing the action does not fall under the period as specified in said notification.

Disclaimer: All the above views, and thoughts expressed in the content belong solely to the author.

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^[1] In Suo Motu Writ Petition (Civil) No. 3 of 2020

^[2] The Hon’ble Court has listed the matter on 19 July, 2021 for next hearing

^[3] Notification no. 14/2021 – Central Tax dated 01 May 2021

^[4] Inserted vide the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020

^[5]  1991 AIR 2176, 1991 SCR (3) 936

^[6] 1992 AIR 248, 1991 SCR Supl. (1) 251

^[7] Instruction no. P/35/2021-ADC(RRC and M)-CCT-CTD dated 7 April, 2021

Some notifications issued by the Department to providing relief in current Pandemic Situation (Covid-19) in the country to the taxpayers on 1^st May, 2021

Notification No. 08/2021- Central Tax- Relaxation in Interest for the month of March -2021 & April -2021:

Notification No. 09/2021- Central Tax-Waiver of Late Fees for specified taxpayers and specified tax periods:

Notification No. 10/2021- Central Tax-Extension in due date of filling of GSTR-4  (Composition Scheme) for Financial year 20-21 to 31^st May, 2021   

Notification No. 12/2021- Central Tax-Extension in due date of filling of GSTR-4  (Composition Scheme) for Financial year 20-21 to 31^st May, 2021   

Taxpayers having Turnover Exceeding 5 Crore in Preceding Financial Year

(Big Taxpayers required to file GSTR-3B and GSTR-1 on monthly basis)

Period	Return Type	Due Date	Return Filing Date	Interest	Late Fee
March-21	GSTR-3B	20-04-2021	Till 05-05-2021	9 % for first 15 days	Nil
			After 05-05-2021	9 % for first 15 days than 18% thereafter	Rs. 20/50 per day
April-21	GSTR-3B	20-05-2021	Till 04-06-2021	9 % for first 15 days	Nil
			After 04-06-2021	9 % for first 15 days than 18% thereafter	Rs. 20/50 per day
April-21	GSTR-1	11-05-2021	Till 26-05-2021	Not Applicable	Nil
			After 26-05-2021	Not Applicable	Rs. 20/50 per day

Taxpayers having Turnover Upto 5 Crore in Preceding Financial Year

(Small Taxpayers required to file GSTR-3B and GSTR-1 on quarterly basis)

Period	Return Type	Due Date	Return Filing Date	Interest	Late Fee
Jan 21-March-21	GSTR-3B	22-04-2021	Till 07-05-2021	Nil for first 15 days	Nil
			Between 08-05-2021 to 22-05-2021	9 % for first 16th day to 30th day	Nil
			After 22-05-2021	9 % for first 16th day to 30th day than 18% thereafter	Rs. 20/50 per day
April-21	IFF	13-05-2021	Till 28-05-2021	Not Applicable	Nil

Composition Taxpayers

Period	Return Type	Due Date	Return Filing Date	Interest
Jan 21-March-21	CMP-08	18-04-2021	Till 03-05-2021	Nil for first 15 Days
			Between 03-05-2021	9 % for first 16th day to 30th day
			After 18-05-2021	9 % for first 16th day to 30th day than 18% thereafter
Jan 21-March-21	GSTR-4	30-04-2021	31-05-2021	Not Applicable

Notification No. 11/2021- Central Tax-Extension in due date of filling of ITC-04  for Financial year 20-21 to 31^st May, 2021:

ITC-04 is a declaration furnishing by the principal manufacturer in respect of the goods dispatched to Job workers for Job Work with certain conditions.

ITC-04 is a quarterly form. It must be furnished on or before 25th day of the month succeeding the quarter. According to the provision for Jan-21 to Mar-21 quarter, the due date is 25th April-21. But in the above notification, this due date of 25th April-21 is extended to 31st May-21.

Notification No. 13/2021- Central Tax-Compliance of Rule36(4) for the month of April-21 deferred till May-21 & IFF for April shall be available till 28^th May,21:

The CGST Rule-36(4)restrict taxpayer to claim ITC of 5% of the eligible credit available in respect of invoices or debit notes as per details uploaded by the suppliers.

Now as per this notification ITC claims to 5% of GSTR-2B (Auto populated) in GSTR-3B is relaxed for April 2021. The taxpayer can apply this rule cumulatively for both April-2021 and May -2021 while GSTR-3B for May 2021.

Further this notification extended due date to file IFF for the month of April-2021 by taxpayer opted QRMP scheme open to file originally from 1^st May -2021 to 13^th May-2021 now extended to 1^st May -2021 to 28^th May-2021.

Notification No. 14/2021- Central Tax-Extension of dates of various compliances till 31^st May-2021:

Notification under section 168A of CGST Act due date of compliance which falls during the period from the 15th April 2021 to 30th May 2021  extended to 31st May 2021.

Exception of above:

1. On section 39 but except Sub Section(3)- TDS Return u/s 51 (GSTR-7), Sub Section (4)- Return by Input service distributor (GSTR-6) and Sub Section (5)- Non- resident Taxpayer (GSTR-5)

It means the extension is allowed in all three sub sections as mentioned above.

2. Section 68 as far as E-way bill is concerned

3. Section 10 (3) – Composition Scheme shall lapse if turnover exceeds the prescribed limit.

Section 25- Procedure for registration.

Section 27- Provisions related to Casual taxable Person and Non- Resident taxable person

Section 31- Tax Invoice

Section 37- Furnishing details of outwards supplies

Section 47- Levy of Late Fee

Section 50- Interest on delayed payment of Tax

Section 69- Power to Arrest

Section 90- Liability of Partners of the firm to pay tax

Section 122- Penalty for certain offenses

Section 129- Detention, seizure, and release of goods and conveyance in transit.

E- Invoicing:

‘E-Invoicing’ is a system in which B2B (Business to Business) invoices are authenticated electronically on the GST portal. Under the electronic invoicing system, a unique identification number will be issued against each and every invoice by the Invoice Registration Portal (IRP) to be managed by the GST Network (GSTN). 

Invoice Registration Portal (IRP) is launched for the purpose of real time data sharing GST portal and E invoicing portal that eliminate the manual data entry in GSTR-1 as well as Part 1 of E way bills.  However, GST department issued an update on 1st February 2021 that while pulling the e-invoice data into the GST System, details of some invoices were not getting auto- populated into the GSTR-1. Complete data will take some more time to update. Hence taxpayers are advised not to wait for the complete auto-population of data, and instead proceed with preparing and filing the GSTR-1, by the due date, based on the data as per their records.

Applicability:

E- Invoicing is applies from 1^st Oct-20 to all taxpayers whose aggregate turnover has exceeded Rs.500 crore limit in any of the preceding financial years from 2017-18 to 2019-20 (Notification No.61/2020). Further, from 1st January 2021, the above limit is changed to 100 crore (Notification No.88/2020). Further, from 1st April 2021, the above limit is changed to 50 crore (Notification No. 5/2021).

Not Applicable to:

E-Invoicing is not applicable to Specified Businesses such as SEZ Unit, Insurer, Banking Company, Financial Institution, NBFC, GTA Service, Passenger Transport Service, and Admission to Multiplex for Films.

Eligibility for ITC:

If the Supplier of Goods and Services are required to issue E-Invoices and not comply with this requirement then no ITC is available to the Purchaser.  For this condition, it’s very difficult for the buyer to ascertain whether E- invoicing is applies to supplier or not. It’s better to take an Undertaking from the supplier.

Generation :

All the ERP software provides API backlinking of the ERP with the E-invoicing portal on real time basis to authenticate the invoice by a single click but under manual process, Bulk E- invoicing offline tool should be used and the JSON file uploaded in the IRP portal.

HSN Code Applicability:

CBIC (The Central Board of Indirect Taxes) issued Notification No. 12/2017-Central Tax dated 28^th June, 2017, to show specified digits of Harmonised System of Nomenclature (HSN)/ Service Accounting Code (SAC) Code on the tax invoices for supply of goods or services. Further, the above notification was amended vide Notification No. 78/2020 – Central Tax, dated 15^th October, 2020 to mandate 4/6- digit HSN/SAC Code on supply of goods or services on the tax invoices w.e.f. April 1, 2021:

Sr. No	Aggregate T/O in Preceding F.Y	No Of Digits of HSN Code upto 31st Mar-21	No Of Digits of HSN Code from 1st April-21
1	Upto 1.5 Crores	0	4
2	1.5 Crores to 5 Crores	2	4
3	More than 5 Crores	4	6

Thereafter,  Notification No. 90/2020 – Central Tax, dated December 01, 2020  issued to provide for the class of supply of ‘Chemicals’ whose HSN Code are required to be mentioned at 8-digit on the tax invoices.

Along with above notification 8 digits of HSN code is mandatory in case of export and imports under the GST.

Penalty:

Under section 125 – General Penalty of the Central Goods and Services Tax Act, 2017 n case of non-mentioning or mentioning wrong HSN code under the Goods and Service Tax Act, the maximum penalty of INR 50,000/- ( INR 25000/- for CGST and SGST each) shall be levied.

For the correct HSN code do visit on https://cbic-gst.gov.in/gst-goods-services-rates.html.