Durga Bhavani Enterprises Vs Assistant Commissioner (State Tax) (Telangana High Court)
In a recent judgment, the Telangana High Court nullified an assessment order against Durga Bhavani Enterprises, citing a violation of the statutory limitation period for issuing show cause notices under the Central Goods and Services Tax Act, 2017 (CGST Act).
The petitioner, Durga Bhavani Enterprises, challenged a show cause notice issued on November 30, 2024, and a subsequent assessment order passed on February 28, 2025, pertaining to the tax period 2020-2021. The petitioner’s counsel argued that a combined reading of Section 73(2) and (10) of the CGST Act mandates the issuance of a show cause notice at least three months prior to the passing of the assessment order. Given the assessment order date of February 28, 2025, the show cause notice should have been issued by November 28, 2024. The actual issuance on November 30, 2024, rendered it time-barred.
The State Tax Department’s Special Government Pleader did not dispute the factual timeline.
The High Court found merit in the petitioner’s argument, concurring that the show cause notice was issued two days beyond the permissible statutory period. The court referenced a similar view taken by the Andhra Pradesh High Court in the case of M/s. The Cotton Corporation of India v. Assistant Commissioner (ST) (Audit) (FAC), State of Andhra Pradesh, Union of India [2025 (2) TMI 362]. This precedent affirmed that the timelines stipulated in Section 73(2) and (10) are mandatory.
