GST Limitation: COVID Extensions Don’t Shield Tax Authorities

Breaking the Brahmasutra Illusion: Why COVID Limitation Extensions Don’t Shield GST Authorities

The principle of limitation under the Goods and Services Tax (GST) framework stands as a cornerstone of procedural fairness and legal discipline. It prescribes statutory time frames within which tax authorities must initiate or complete proceedings, such as assessments, show cause notices, adjudications, or appeals under the Central Goods and Services Tax Act (CGST Act). This temporal boundary ensures that taxpayers are not left in perpetual uncertainty over past transactions, thereby fostering stability, accountability, and predictability in commercial operations.​

Sections 73 and 74 of the CGST Act distinctly demarcate the limitation periods for proceedings—three years for cases without fraud, collusion, or willful misstatement, and five years where fraud or suppression of facts is alleged. The legislative intent underlying these time limits is to strike a balance between efficient revenue administration and protection of taxpayer rights. The expiration of the limitation period effectively extinguishes the right of the department to demand tax, ensuring that administrative delays do not prejudice taxpayers.​

Extension of Limitation During COVID-19 Pandemic

Recognizing the unprecedented disruptions caused by nationwide lockdowns, the Supreme Court in In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (Civil) No. 3 of 2020 (Order dated 23 March 2020) exercised its powers under Articles 141 and 142 of the Constitution to extend all periods of limitation prescribed under general or special laws for judicial and quasi-judicial proceedings with effect from 15 March 2020.​

As the pandemic evolved, multiple follow-up orders were issued:

• Order dated 8 March 2021 — The Court ended the earlier relaxation but allowed the exclusion of the period from 15 March 2020 to 14 March 2021 in computing limitation.
• Order dated 27 April 2021 — In light of the second COVID-19 wave, the Supreme Court restored its earlier extension order, extending limitation until further notice.​
• Final order dated 10 January 2022 — The Court declared that the period from 15 March 2020 to 28 February 2022 shall stand excluded in computing limitation. This extension applied to all judicial and quasi-judicial forums, ensuring that litigants were not deprived of their statutory remedies due to pandemic restrictions.​

These directions were intended as extraordinary measures to alleviate hardships faced by taxpayers and litigants who could not approach courts or tribunals owing to nationwide lockdowns.

Applicability to GST Proceedings and Departmental Actions

Though the Supreme Court’s orders broadly referred to “judicial and quasi-judicial proceedings,” later judicial interpretation clarified that the benefit was strictly confined to litigants and not extendable to executive or departmental actions under taxing statutes such as the CGST Act. The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 157/13/2021-GST dated 20 July 2021, confirmed that the Supreme Court’s directions do not dilute the statutory time limits applicable to administrative actions like adjudications or issuance of notices under Sections 73, 74, or revisions under Section 108 of the CGST/SGST Acts.​

The government separately invoked Section 168A of the CGST Act, introduced through the Finance Act, 2020, empowering it to extend time limits for compliances affected by force majeure situations such as COVID-19. Through multiple notifications, including Notification No. 35/2020–Central Tax dated 3 April 2020, time limits for filing returns, furnishing statements, and performing statutory duties under GST were extended up to June and July 2020.​

Judicial Pronouncements on Scope and Limitation of COVID Extensions

Several landmark rulings shaped the jurisprudence on this issue. In S. Kasi v. State through the Inspector of Police, Samaynallur Police Station, Madurai District2020 SCC online SC 529, the Judgment of the Hon’ble High Court at Calcutta, in the case of Gobindo Das v. Union of India 2021 SCC online Cal 2739 and the Judgment of the High Court of Delhi, in the case of Vikas WSP Ltd. v. Directorate Enforcement 2021 (376) E.L.T 201 (Del), had held that the said extension of limitation, granted by the Hon’ble Supreme Court of India, in the above Judgment would only be available to litigants who approach the judicial and quasi-judicial bodies and the same would not be available to the authorities.

In Punjab Carbonic (P) Ltd v. CTO [W.P. No. 12529 of 2024, dated 21-4-2025] and Guptas Construction Company v. Joint Commissioner (ST) [2025] 177 taxmann.com 417 (Andhra Pradesh), the Andhra Pradesh High Court distinguished between “litigant relief” and “departmental enforcement.” The court held that the COVID limitation extension could not rescue tax authorities acting beyond the statutory timeframe under Section 108(2) of the GST Act. Orders passed after expiry of limitation, even during the pandemic, were declared unsustainable, as extensions under Article 142 of the Constitution cannot enlarge statutory powers conferred upon administrative authorities.​

Therefore, the Supreme Court’s orders were not universal shields (“Brahmasutra”) for the government to bypass mandatory limitation periods, emphasizing that administrative inaction could not be excused under the guise of pandemic hardship.​

Professional Takeaways for Taxpayers and Practitioners

• Taxpayers must carefully evaluate departmental actions initiated or concluded beyond statutory timelines, particularly where the department erroneously invokes COVID extensions.
• Judicial precedents now affirm that while limitation relief applies to appeals, revisions, and remedial actions by taxpayers, it cannot validate delayed jurisdictional or quasi-legislative acts of tax authorities.
• Section 168A of the CGST Act remains the only legitimate statutory basis for extending departmental deadlines, subject to express notification; absent such notification, proceedings beyond limitation are void ab initio.​

Conclusion

The period of limitation under GST law is not mere procedural formality—it is a substantive safeguard against administrative overreach. The Supreme Court’s COVID-19 orders were a humanitarian measure designed to protect access to justice, not a carte blanche for tax authorities to disregard statutory limits. Subsequent High Court rulings reaffirmed that these extensions are litigant-centric and cannot dilute the sanctity of statutory limitation governing departmental powers. The judicial consensus, grounded in rule-of-law principles, thus preserves the foundational equilibrium between taxpayers’ rights and the State’s authority, ensuring transparent and time-bound tax administration.

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( the views expressed in this article are strictly personal and author of this article can be reached at caprudhvigst@gmail.com)