Tata Play Ltd Vs Sales Tax Officer (Delhi High Court)
Limitation Period for issuance of SCN under Section 73 of the CGST Act to be interpreted as ‘3 Calendar Months’ and not as 90 days
The Delhi High Court, in the case of Tata Play Ltd. vs. Sales Tax Officer, has ruled on the interpretation of the limitation period for issuing a Show Cause Notice (SCN) under Section 73 of the CGST Act. The case involved Tata Play Limited, which challenged an SCN and a subsequent demand order from the tax authorities, arguing that the notice was issued beyond the statutory time limit and that they were not given an adequate opportunity for a personal hearing. The tax authorities had issued the SCN on November 30, 2024, for the financial year 2020-21, a period for which the due date for the annual return was extended to February 28, 2022.
The key dispute centered on whether “three months” in Section 73(2) of the CGST Act should be interpreted as 90 days or as three calendar months. The petitioner argued for a 90-day interpretation, which would have made the SCN, issued on November 30, 2024, time-barred by two days, as the deadline would have been November 28, 2024. The respondent contended that “three months” meant three calendar months, which, when counted backward from the order deadline of February 28, 2025, made the November 30, 2024, SCN timely. The court sided with the respondent, referencing the Supreme Court’s decision in Himachal Techno Engineers v. Union of India, which held that “month” is to be defined by the British calendar, not as a fixed number of days. The court also calculated that even under a 90-day interpretation, the period from November 30, 2024, to February 28, 2025, amounted to 90 days, making the notice valid on both counts.
