Facts of the Case:

In this case, for the Financial Year 2020–2021, the petitioner filed its Annual Return in Form GSTR-9 along with Reconciliation Statement in Form GSTR-9C on 27.02.2022. Originally, the statutory due date for filing the annual return under Section 44 read with Rule 80 of the CGST Rules was 31.12.2021. However, by Notification No. 40/2021–Central Tax dated 29.12.2021, the due date was extended to 28.02.2022. Subsequently, the Assistant Commissioner of State Tax, Jorhat issued a Show Cause Notice (SCN) dated 29.11.2024 under Section 73 of the CGST/AGST Act for FY 2020–2021 alleging excess availment of ITC from cancelled dealers, return defaulters and tax non-payers. A total demand of Rs. 33,03,968/- (CGST + AGST + IGST) along with interest and penalty was proposed.

The petitioner challenged the SCN before the High Court contending that it was barred by limitation under Section 73(2) read with Section 73(10) of the Act.

Issue:

Whether the Show Cause Notice dated 29.11.2024 issued under Section 73(1) of the CGST/AGST Act was barred by limitation, having regard to the requirement under Section 73(2) that the notice must be issued “at least three months prior” to the time limit for passing the order under Section 73(10).

Held that:

The Court first noted that under Section 73(10), the order determining tax must be issued within three years from the due date for furnishing the annual return. Since the due date for filing the annual return for FY 2020–2021 was extended to 28.02.2022, the last date for passing an order under Section 73(9) became 28.02.2025 by application of the “corresponding date rule”. Further, under Section 73(2), the proper officer is required to issue the SCN “at least three months prior” to the time limit for issuance of the order. Therefore, the critical question was how to compute the three-month period preceding 28.02.2025.

Relying upon Section 3(35) and Section 9 of the General Clauses Act, 1897, the Court held that the “Month” means a calendar month. In computing a prescribed period, the first day is to be excluded and the last day is to be included. When a statute prescribes a period of months (and not days), the “corresponding date rule” applies.

Accordingly, the Court reasoned that the last date for passing the order was 28.02.2025. The three calendar months immediately preceding it were December 2024, January 2025, and February 2025. Since the date of issuance of SCN i.e. 29.11.2024 is to be excluded while computing time, the requirement of “at least three months” stood satisfied. Even a notice issued on 30.11.2024 would have been valid, as the entire months of December, January and February would remain available.

The Court declined to follow the Andhra Pradesh High Court decision in M/s The Cotton Corporation of India and held that the SCN issued on 29.11.2024 was within limitation.

Case Name: M/s. Surya Business Private Limited Versus The State of Assam, The Assistant Commissioner of State Tax, Jorhat-I, Assam, The Commissioner of State Taxes, Assam. dated 12.02.2026