In a significant ruling on GST limitation issues, the Madras High Court held that proceedings initiated under Section 73 of the CGST Act cannot be treated as time-barred when the timeline stands extended by the Supreme Court’s COVID-19 limitation orders. The Court observed that the assessee’s contention regarding time-bar was unsustainable in view of the blanket exclusion of limitation between 15.03.2020 and 28.02.2022. However, since the assessee had raised several other factual and legal objections that remained unaddressed, the matter was remanded to the authorities for a fresh decision.
Case Details
- Case Title: M/s. Tvl. Sri Vinayaga Agencies v. State Tax Officer (Circle-III)
- Court: Madras High Court
- Citation: [2025] 180 taxmann.com 3 (Madras)
- Date of Order: 13 October 2025
- Date Published: 13 November 2025
- Legal Provision Involved: Section 73, CGST Act, 2017
- Issue: Whether the SCN issued under Section 73 was time-barred despite COVID-19 related exclusion of limitation.
- Held:
- COVID-19 limitation exclusion ordered by Supreme Court applies to GST proceedings.
- SCN was within limitation.
- However, since other grounds raised by the petitioner were not considered, the matter was remitted for fresh adjudication.
Background
The petitioner, M/s. Tvl. Sri Vinayaga Agencies, received a show cause notice (SCN) under Section 73 of the CGST Act alleging short-payment of GST. The assessee challenged the SCN mainly on the ground of limitation, arguing that the notice was issued beyond the statutory period of three years.
The Revenue countered that the limitation period stood extended due to the Supreme Court’s suo motu orders excluding the period from 15.03.2020 to 28.02.2022 for all judicial and quasi-judicial proceedings because of the COVID-19 pandemic.
Key Legal Issue
Whether the SCN issued under Section 73 of the CGST Act was time-barred despite the COVID-related exclusion of limitation ordered by the Supreme Court.
Court’s Findings
1. Supreme Court’s COVID Orders Apply to GST Proceedings
The Madras High Court reaffirmed that the Supreme Court’s blanket exclusion of limitation applies not only to courts but also to quasi-judicial proceedings, including issuance of SCNs under GST.
Therefore, any computation of limitation during the pandemic must exclude:
- 15 March 2020 to 28 February 2022
With this exclusion, the SCN was within the permissible limitation period under Section 73.
2. Assessee’s Time-Bar Argument Rejected
Since the limitation stood statutorily extended, the Court held that the petitioner’s objection on limitation was unsustainable.
3. Other Grounds Not Examined by the Adjudicating Authority
The petitioner had raised several other objections—both factual and legal—before the authority. However, these were not dealt with in the impugned order.
The Court noted that principles of natural justice require a reasoned order addressing all issues raised by the assessee.
4. Matter Remanded for Fresh Consideration
While upholding the validity of limitation, the Court directed the department to:
- Reconsider all other contentions
- Provide an opportunity of hearing
- Pass a fresh, reasoned order
Thus, the outcome was partially in favour of Revenue (on limitation) and partially in favour of the assessee (on remand).
Significance of the Ruling
1. Clarifies Limitation Computation Under GST Post-COVID
This decision reinforces that all SCNs issued during or shortly after the pandemic benefit from the SC’s exclusion orders, closing the door for limitation-based challenges unless the computation still exceeds the extended period.
2. Ensures Fairness in Adjudication
Even though limitation was resolved against the assessee, the Court ensured procedural fairness by sending the matter back for a fresh, well-reasoned adjudication.
3. Persuasive Value for Similar GST Disputes
Taxpayers facing Section 73 or 74 notices issued around the pandemic period can expect courts to apply the same approach.
Conclusion
The Madras High Court has clarified that Section 73 proceedings issued during the COVID-impacted timeline are not time-barred, given the SC-mandated exclusion of limitation. However, authorities are obliged to pass speaking orders addressing all contentions. The remand ensures the assessee gets a fresh opportunity to present its case.