28th November or 30th November?
The Last Date to Issue a GST Show Cause Notice for the Financial Year 2020 – 2021
Introduction:
In a significant number of cases, the Department has issued Show Cause Notices under Section 73 of the CGST Act, 2017, for the Financial Year 2020–2021 on 28th, 29th, and 30th November 2024. The central issue that arises for consideration is whether such notices are barred by limitation.
On this issue, divergent views have emerged from different High Courts. While one High Court has held that, for Financial Year 2020–2021, the last permissible date for issuance of a Show Cause Notice is 28th November 2024, another has taken the view that the limitation extends up to 30th November 2024.
Statutory Time Limits under Section 73
Section 73(10) prescribes the time limit for issuance of the order under sub-section (9), which reads as follows:
73(10):- “The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund.”
Section 73(2) prescribes the time limit for issuance of the notice under sub-section (1), which reads as follows:
73(2):- “The proper officer shall issue the notice under sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order.”
Time limits u/s. 73 for FY 2020-2021:
The last permissible date for issuance of an order under Section 73(9) is linked to the due date for furnishing the annual return for the relevant financial year. In this regard, Rule 80(1A), inserted vide Notification No. 40/2021–Central Tax dated 29th December 2021, extended the due date for filing the annual return for Financial Year 2020–2021 to 28th February 2022. Consequently, by virtue of Section 73(10), the outer time limit for issuance of the order stands extended to 28th February 2025. Consequently, the last permissible date for issuance of an Order under Section 73(9) stands extended to 28th February 2025.
Accordingly, the time limit for issuance of a show cause notice under Section 73(1), would be a date falling at least three months prior to 28th February 2025.
This leads to the central issue, the determination of the precise date that can be regarded as falling ‘at least three months prior to’ 28th February 2025, and consequently, whether the show cause notices issued on 28th, 29th, and 30th November 2024 fall within the prescribed limitation period.
Days versus months; 3 months or 90 days:
Clause 35 of Section 2 of the General Clauses Act, 1897 defines “month” in the following words: “month’ shall mean a month reckoned according to the British calendar.
The Hon’ble Supreme Court, in Bibi Salma Khatoon vs. State of Bihar, 2001 AIR SCW 3346, authoritatively held that where a statute prescribes a period in terms of months, such period is to be reckoned according to the Gregorian (British) calendar, and expires on the corresponding date in the succeeding month. The Court observed as under:
It was held that the question arises, what is meant by the word ‘month’. Sub-section (34) of Section 4 of the Bihar and Orissa General Clauses Act, 1917, defines the word ‘month’ to mean a month reckoned according to the British Calendar. This means Gregorian Calendar- January, February………..etc. The Hon’ble Court also said “In Halsbury’s Law of England, Fourth Edition, para 211 method of computation of month is given as follows “para 211 : Calendar month running from arbitrary date-when the period prescribed is a calendar month running from any arbitrary date the period expires upon the day in the succeeding month corresponding to the date upon which the period starts, save that, if the period starts at the end of a calendar month which contains more days than the next succeeding month, the period expires at the end of that succeeding month”.
This principle clearly establishes that the computation of time in terms of months is governed by calendar-based reckoning, and not by a fixed number of days.
The Hon’ble Supreme Court, in State of Himachal Pradesh vs. Himachal Techno Engineers, (2010) 12 SCC 210, has categorically, while interpreting the expression “three months”, categorically and unequivocally held that a “month” refers to a calendar month, and that when a period prescribed is three months — as distinct from ninety days — the period would expire in the third month on the date corresponding to the date upon which the period commences. Their Lordships observed:
“The High Court has held that `three months’ mentioned in section 34(3) of the Act refers to a period of 90 days. This is erroneous. A `month’ does not refer to a period of thirty days, but refers to the actual period of a calendar month. If the month is April, June, September or November, the period of the month will be thirty days. If the month is January, March, May, July, August, October or December, the period of the month will be thirty one days. If the month is February, the period will be twenty nine days or twenty-eight days, depending upon whether it is a leap year or not.”
“The legislature had the choice of describing the periods of time in the same units, that is to describe the periods as `three months’ and `one month’ respectively or by describing the periods as `ninety days’ and `thirty days’ respectively. It did not do so. Therefore, the legislature did not intend that the period of three months used in sub-section (3) to be equated to 90 days, nor intended that the period of thirty days to be taken as one month.”
“When the period prescribed is three months (as contrasted from 90 days) from a specified date, the said period would expire in the third month on the date corresponding to the date upon which the period starts. As a result, depending upon the months, it may mean 90 days or 91 days or 92 days or 89 days.”
The above observations make it abundantly clear that the legislature has consciously used the expression ‘months’ and not ‘days’, and therefore any attempt to equate ‘three months’ with a fixed number of days would be contrary to the settled law laid down by the Hon’ble Supreme Court.
In light of the aforesaid judicial pronouncements, it appears that the expression ‘three months’ as used in Section 73(2) of the CGST Act, 2017 is to be construed as referring to three calendar months, and cannot ordinarily be equated with a fixed period of ninety days. Such an interpretation is consistent with the settled legal position that time periods expressed in months are to be computed with reference to the calendar, rather than by counting a fixed number of days.
Calculation of days- Between “From” and “To”:
In order to determine the precise date falling three months prior to 28th February 2025, it is necessary to examine the settled principles governing the computation of time under Central statutes. In this context, Section 9 of the General Clauses Act, 1897 assumes significance and provides as under:
“9. Commencement and termination of time.—
1. In any Central Act or Regulation made after the commencement of this Act, it shall be sufficient, for the purpose of excluding the first in a series of days or any other period of time, to use the word “from”, and, for the purpose of including the last in a series of days or any other period of time, to use the word “to”. Provided that nothing in this section shall apply to any act or proceeding to which the “Indian Limitation Act, 1877 (15 of 1877)”, applies.
2. This section applies also to all Central Acts made after the third day of January, 1868, and to all Regulations made on or after the fourteenth day of January, 1887.
The importance of the General Clauses Act in statutory interpretation has been recognised by the Constitutional Bench of the Hon’ble Supreme Court in Commissioner of Customs vs. Dilip Kumar & Co., wherein it was observed as under:
“If while interpreting a statutory law, any doubt arises as to the meaning to be assigned to a word or a phrase or a clause used in an enactment and such word, phrase or clause is not specifically defined, it is legitimate and indeed mandatory to fall back on the General Clauses Act. Notwithstanding this, we should remember that when there is repugnancy or conflict as to the subject or context between the General Clauses Act and a statutory provision which falls for interpretation, the Court must necessarily refer to the provisions of the statute.”
This principle assumes relevance in the present context, where the expression ‘prior to’ and the method of computing time are not expressly defined under the CGST Act.
The Hon’ble Supreme Court, in State of Himachal Pradesh vs. Himachal Techno Engineers, (2010) 12 SCC 210, has also reiterated the principle that, in computing a period of limitation, the day from which the period is to be reckoned is to be excluded. The Court observed as under:
“In this case, it is not disputed that though the cover containing the award was delivered to the beldar in the office of the Executive Engineer on 10.11.2007 which was a holiday, the Executive Engineer received the award on 12.11.2007 (Monday), which was the next working day. Therefore, we hold that the date of delivery of the award on a holiday (10.11.2007) could not be construed as `receipt’ of the award by the appellant. The date of receipt therefore should be taken as 12.11.2007 and not 10.11.2007.{
“Section 12 of Limitation Act, 1963 provides for exclusion of time in legal proceedings. Sub-section (1) thereof provides that in computing the period of limitation for any application, the day from which such period is to be reckoned, shall be excluded. The applicability of Section 12 of Limitation Act, 1963 to petitions under Section 34 of the Act is not excluded by the provisions of the Act. Section (9) of General Clauses Act, 1897 provides that in any Central Act, when the word `from’ is used to refer to commencement of time, the first of the days in the period of time shall be excluded. Therefore the period of “three months from the date on which the party making that application had received the arbitral award” shall be computed from 13.11.2007.”
The above principle, namely the exclusion of the initial reference date in computing a period of limitation, forms a well-settled rule of statutory interpretation and is of particular relevance in determining the expression ‘prior to’ used in Section 73(2).
The principle that, in computing limitation, the first day is to be excluded and the last day included has also been reaffirmed by the Hon’ble Supreme Court in M/s. Saketh India Limited vs. M/s. India Securities Limited, dated 10 March, 1999, AIR 1999 SUPREME COURT 1090, wherein it was observed as under:
Ordinarily in computing the time, the rule observed is to exclude the first day and to include the last. Applying the said rule, the period of one month for filing the complaint will be reckoned from the day immediately following the day on which the period of 15 days from the date of the receipt of the notice by the drawer, expires. Period of 15 days, in the present case, expired on 14th October, 1995. So cause of action for filing complaint would arise from 15th October, 1995. That day (15th October) is to be excluded for counting the period of one month. Complaint is filed on 15th November, 1995. The result would be that the complaint filed on 15th November is within time.
This decision further reinforces the settled rule that the computation of limitation must exclude the initial triggering date, thereby ensuring that the full prescribed period is available.
The above principles were applied by the Hon’ble Bombay High Court in Skoda Auto Volkswagen India Pvt. Ltd. vs. Commissioner (Appeals), WP(ST) NO.5497 OF 2020, dated 12/03/2021, wherein the Court examined the computation of limitation in the context of calendar months and the exclusion of the initial date.
Thus having a clear picture of the legal position, we may now address the issue at hand. Petitioner received the order-in-original sent by speed post on 30.08.2019. As per section 9 of the General Clauses Act, this date would have to be excluded while counting the limitation period of two months which would then commence from 31.08.2019. We have also seen that while construing the word ‘month’, it would mean a month as reckoned according to the British calendar, number of days in a month being immaterial. Therefore, the two months’ limitation period was available to the petitioner upto 31.10.2019. If we add the extended period of limitation of further one month, it would mean that delay could be condoned till 31.11.2019 because the total period of three months had commenced from 31.08.2019 and would be available till 31.11.2019 but because there is no 31 days in November, the extended period of limitation would spill over to 01.12.2019. This is more so because the word ‘to’ is not used in section 85(3A) to cap the limitation period on 30.11.2019. Therefore, the appeal was required to have been dispatched by 01.12.2019. (emphasis supplied)
To the same effect is the decision of the Hon’ble Bombay High Court in M/s. Mangalnath Developers and Another vs. Union of India and Others, wherein it was held that the limitation period of three months commences from the date of receipt of the order and expires on the corresponding date in the third succeeding month:
The order-in-appeal dated 29.11.2019 was received by the respondents on 18.12.2019 and the limitation period of three months therefore commences from 18.12.2019 and the time limit of three months expires on 18.03.2020.
Upon a careful and conjoint reading of the aforesaid judicial pronouncements, it can be safely and conclusively stated that the settled legal rule is that the dies a quo, i.e., the day of the act or event triggering the commencement of the time limit is not to be included in the computation of the limitation period, whereas the dies ad quem, i.e., the last day of the time limit is to be included.
Backward Computation of Limitation — Judicial Approach
The issue of backward computation of limitation was considered by the Hon’ble Madras High Court in Deputy Commissioner of Income Tax vs. Saint Gobain India Pvt. Ltd. Dated 31.03.2022, and the connected matter of Pfizer Healthcare India Pvt. Ltd.. In the said case, the Court was required to interpret the expression ‘prior to’ in the context of computing a period of limitation backwards from a specified date.
The Court held that where a statute requires an action to be taken ‘prior to’ a specified date, the reference date from which the backward computation is to be made must be excluded. It was further observed that the word ‘prior’ is not without significance, and cannot be ignored while interpreting the provision, as doing so would render the statutory language redundant.
The Court also noted that even if the computation is examined on the touchstone of Section 9 of the General Clauses Act, 1897, the result would remain the same, namely that the reference date is to be excluded in computing the period of limitation.
The Hon’ble Court held-
“The word “date” in section 92CA(3A) would indicate 31.12.2019. But the preceding words “prior to” would indicate that for the purpose of calculating the 60 days, 31.12.2019 must be excluded. The usage of the word “prior” is not without significance. It is not open to this court to just consider the word “to” by ignoring “prior”. The word “prior” in the present context, not only denotes the flow of direction, but also actual date from which the period of 60 days is to be calculated. It is settled law that while interpreting a statute, it is not for the courts to treat any word(s) as redundant or superfluous and ignore the same”.
“The language employed is simple. 31.12.2019 is the last date for the assessing officer to pass his order under Section 153. The TPO has to pass before 60 days prior to the last date. The 60 days is to be calculated excluding the last date because of the use of the words “prior to”, and the TPO has to pass order before the 60th day. In the present case, the word “before” used before “60 days” would indicate that an order has to be passed before 1/11/2019 i.e., on or before 31.10.2019 as rightly held by the Learned Judge.”
“Even considering for the purpose of alternate interpretation, the scope of Section 9 of the General Clauses Act, it is to be noted that an inverted calculation of the period of limitation takes place here. If the last date is taken to be the first date from which the period of 60 days is to be calculated, reading down the provision with the use of the word “from”, which denotes the starting point or period of direction in general parlance, would mean that 60 days “from the last date”. Even going by Section 9 of the General Clauses Act, when the word “from” is used, then, that date is to be excluded, implying here that 31.12.2019 must be excluded. After excluding 31.12.2019, if the period of 60 days is calculated, the 60th day would fall on 01.11.2019 and the TPO must have passed the order on or before 31.10.2019 as orders are to be passed before the 60th day”. (Emphasis supplied)
Though the said decision arose under the provisions of the Income Tax Act, the principle laid down therein relates to the computation of limitation and the interpretation of the expression ‘prior to’, which are of general application. The reasoning of the Hon’ble Court, therefore, assumes considerable relevance in the context of Section 73(2) of the CGST Act, 2017.”
The above judgment of Hon’ble Madras High Court has been consistently followed by ITAT in many cases.
Last date is 28.11.2024- Andhra Pradesh High Court:
The Hon’ble High Court of Andhra Pradesh, in Cotton Corporation of India vs. Assistant Commissioner (ST) (Audit) (FAC), Vijayawada [2025] 171 taxmann.com 326 (Andhra Pradesh) [05-02-2025], was called upon to examine the validity of a Show Cause Notice dated 30th November 2024, issued under Section 73(1) of the APGST Act, 2017 for Financial Year 2020–2021.
The petitioner contended that a conjoint reading of Section 73(10) read with Rule 81-A of the CGST Rules establishes that the last permissible date for issuance of the Show Cause Notice was 28th November 2024, rendering the impugned notice time-barred.
The respondents, on the other hand, urged that since a “month” denotes a calendar month and 28th February marks the end of the month of February, the last date for issuance of a notice should be taken as either 1st December 2024 or at the very least 30th November 2024. It was further contended that Section 73(2) is merely a directory provision, and any violation thereof cannot render the proceedings non est.
The Hon’ble Court placed reliance upon the Hon’ble Supreme Court in State of Himachal Pradesh vs. Himachal Techno Engineers, (2010) 12 SCC 210, and the decision of the House of Lords in Dodds vs. Walker, 1981 (2) WLR 609 (HL) and held- The aforesaid Judgments clearly laid down the principle that, when a period, available for a certain action, is defined in terms of months, it would mean that the corresponding date of the corresponding month would be the cutoff date. In the present case, the cutoff date for issuing an order is 28.02.2025. The three-month period which would elapse from this date would be 28.11.2024. Since the notice was issued on 30.11.2024, it would be beyond the time stipulated under Section 73(2) of the GST Act.
Last date is 30.11.2024- Delhi High Court:
The Hon’ble High Court of Delhi, in “Tata Play Ltd. vs. Sales Tax Officer, Avato [2025] 176 taxmann.com 1000 (Delhi)[29-07-2025]”, was presented with facts virtually identical to those in the Cotton Corporation case. The petitioner challenged a Show Cause Notice dated 30th November 2024 and the consequent demand order dated 28th February 2025, pertaining to Financial Year 2020–2021, on the ground that the SCN was issued beyond the prescribed limitation period under Section 73(2) of the CGST Act.
The Hon’ble Court, made the following significant observations on the question of limitation:
A perusal of the above-stated provisions would show that an order has to be passed by the ‘proper officer’ within a period of three years from the due date for furnishing the annual returns for the said financial year. For issuance of a show cause notice, at least three months’ period prior to the time limit under Section 73(10) of the CGST Act would be available. Thus, the show cause notice has to be issued at least three months prior to the outer limit prescribed for passing of an order under Section 73(10) of the CGST Act.
On the specific question of date calculation, the Hon’ble Court expressly distinguished the Cotton Corporation judgment and held as follows (Paras 32, 33, 35 & 36):
Curiously, the dates which were considered by the Andhra Pradesh High Court in M/s Cotton Corporation of India (supra) are totally identical to those in the present case. However, an analysis of the decision in Himachal Techno Engineers (supra) would show that the expression ‘three months’ has to be reckoned and interpreted as three calendar months and not as 90 days.
While the month of December has 31 days, the month of January has 31 days and the month of February has 28 days. Thus, the total number of days come to 90 days. Even if the time period is calculated as 90 days, there is a clear gap of 90 days between the dates of 30th November, 2024 to 28th February, 2025. Thus, viewed in either way, the impugned SCN would not be barred by limitation and on this issue, this Court, therefore, does not agree with the decision of the Andhra Pradesh High Court in M/s Cotton Corporation of India (supra).
Thus, a period of three months would mean three British calendar months i.e., December, 2024, January, 2025 and February, 2025.
Hence, upon a careful consideration of all the facts and circumstances of this case, read with all the relevant case laws…the issuance of the impugned SCN dated 30th November, 2024, is well within the stipulated time period of 3 months before the passing of the impugned order dated 28th February, 2025. Thus, the impugned SCN and the impugned order, having been issued within the statutory limitations, are neither time barred nor issued without jurisdiction.
Re-examining the Tata Play Judgment: A Critical Analysis
At the outset, it is respectfully opined that certain aspects discussed hereinafter may not have been specifically urged before the Hon’ble Delhi High Court during the course of arguments.
With utmost respect to the Hon’ble Delhi High Court, the observation that the Andhra Pradesh High Court had equated “three months” with 90 days appears to proceed on an incorrect appreciation of the Cotton Corporation judgment. A careful reading of the said judgment would reveal that the Hon’ble Andhra Pradesh High Court had not equated “three months” with 90 days, but had in fact followed and applied the judgment of the Hon’ble Supreme Court in Himachal Techno Engineers and applied the corresponding date rule.
Thus, both Courts proceeded on the same legal principle. The divergence in outcome arises not from any difference in the legal principle applied, but from the methodology of computation, particularly whether the reference date of 28th February 2025 is to be excluded or included in the backward computation.
Backward Computation and the Significance of the Expression “Prior To”
It further appears that the principles governing backward computation of limitation, as laid down by the Hon’ble Madras High Court in Deputy Commissioner of Income Tax vs. Saint Gobain India Pvt. Ltd. and Pfizer Healthcare India Pvt. Ltd. Dated 31.03.2022, were not placed for consideration before the Hon’ble Delhi High Court.
The said judgment clearly establishes that where a statute requires an act to be performed “prior to” a specified date, the reference date must be excluded in computing the period of limitation. The expression “prior to” is not merely indicative of direction, but carries with it a substantive legal consequence governing the manner of computation.
Applying this principle to the facts of the present case, the computation would proceed as follows:
- Excluding 28th February 2025, being the reference date
- The backward computation of three calendar months would be:
i. 28th January 2025 to 27th February 2025
ii. 28th December 2024 to 27th January 2025
iii. 28th November 2024 to 27th December 2024
Accordingly, the last permissible date for issuance of the Show Cause Notice would fall on 28th November 2024.
Internal Inconsistency in the Alternative “90 Days” Reasoning
The Hon’ble Delhi High Court additionally observed that even if the period were to be reckoned as 90 days, the requirement of Section 73(2) would stand satisfied.
With respect, this reasoning appears to be internally inconsistent. The Hon’ble Court itself acknowledged, following the judgment in Himachal Techno Engineers, that “three months” cannot be equated with 90 days. To then rely upon a 90-day computation as an alternative basis would reintroduce the very equivalence that has been expressly rejected by the Hon’ble Supreme Court.
The Real Point of Divergence Between the Two Judgments
Hon’ble Gauhati High Court in “Surya Business (P.) Ltd. vs. State of Assam [2026] 184 taxmann.com 623 (Gauhati)[12-02-2026]” has also held that the last date in the aforesaid case is 30/11/2024.
It appears that the divergence between the three judgments arises solely from the methodology adopted for computation. While the Hon’ble Andhra Pradesh High Court computed the period by counting backwards from the reference date, the Hon’ble Delhi High Court and Hon’ble Gauhati High Court appear to have approached the issue by counting forward from the date of the Show Cause Notice.
Conclusion
In the author’s considered opinion, the interpretation adopted by the Hon’ble Andhra Pradesh High Court appears to be more consistent with the statutory framework.
The expression “at least three months prior to”, as used in Section 73(2), in the opinion of the author, is required to be interpreted in light of the principles governing computation of limitation, including the exclusion of the reference date. This approach finds support not only in the judgment of the Hon’ble Supreme Court in Himachal Techno Engineers, but also in the authoritative pronouncement of the Hon’ble Madras High Court in Saint Gobain / Pfizer, which recognises the independent legal significance of the expression “prior to”.
Accordingly, the conclusion that the last permissible date for issuance of the Show Cause Notice for Financial Year 2020–2021 is 28th November 2024 appears to be the more reasonable and legally sustainable view.
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Disclaimer: The views expressed in this article are personal and based on the author’s interpretation of the statutory provisions and judicial precedents discussed herein, and are intended solely for academic and informational purposes. It is respectfully clarified that any discussion or critique of judicial pronouncements is made in a spirit of legal analysis and is not intended to question or dilute the authority of any Hon’ble Court. Readers are advised to independently examine the relevant provisions and judgments before forming any conclusion.
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