Case Law Details
Indusind Bank Limited Vs State of Gujarat & Ors (Gujarat High Court)
The Gujarat High Court is currently considering a petition filed by Indusind Bank Limited, challenging the validity of a Show Cause Notice (SCN) issued by tax authorities under Section 75(10) of the Central Goods and Services Tax (CGST) Act, 2017. The bank argues that the notice was issued beyond the statutory period, rendering it without jurisdiction.
During the hearing, Mr. Prasad Paranjape, representing Indusind Bank, contended that the SCN, dated November 30, 2024, for the assessment period 2020-21, exceeded the legally permissible timeframe. He highlighted that the due date for furnishing the annual return for the petitioner for 2020-21 was February 28, 2022. Consequently, according to Section 75(10) of the CGST Act, which stipulates a three-year period for issuing an order from the return’s due date, the corresponding deadline for the SCN would have been November 28, 2024. The bank asserts that the notice, issued two days later, is therefore jurisdictionally flawed.
To bolster its argument, Indusind Bank presented several judicial precedents. The Andhra Pradesh High Court’s ruling in M/s. The Cotton Corporation of India v. Assistant Commissioner (ST) (AUDIT) (FAC) (2025 (2) TMI 362) was cited, where an original order was quashed due to the show cause notice being issued beyond the mandatory period. This principle, the bank noted, was subsequently adopted by the Telangana High Court in M/s. Sri Durga Bhavani Enterprises v. Assistant Commissioner State Tax (2025 (4) TMI 1148).
Further, the bank referenced the Supreme Court’s decision in State of Himachal Pradesh & Anr., v. Himachal Techno Engineers & Anr. ((2010) 12 SCC 210). This apex court judgment clarified the calculation of periods defined as “three months” versus “90 days,” stating that “three months” would expire on the corresponding date in the third month from the start date. Based on this, the bank maintained that the three-month period for the SCN in question concluded on November 28, 2024.
Following these submissions, the Gujarat High Court has issued a notice, with the matter returnable on July 17, 2025, for further proceedings. The outcome of this jurisdictional challenge is anticipated to provide clarity on the strict adherence to timelines for issuing tax recovery notices under the CGST Act.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
Heard learned advocate Mr. Prasad Pranjape for learned advocate Mr. Dhaval Shah for the petitioner and learned Senior Standing Counsel Mr. Utkarsh Sharma for the respondent appearing on advance copy.
2. It was submitted by learned advocate Mr. Prasad Paranjape for the petitioner that the respondent authority has issued the show cause notice in violation of the provisions of Section 75(10) of the Central Goods and Services Tax Act, 2017 (for short “the CGST Act”). In support of this, it was pointed out that the last date of furnishing the annual return as per Rule 80 of the CGST Rules in case of petitioner for the period 2020-21 was 28.02.2022 and therefore the due date of issuance of order is three years and as per provisions of Section 75(10) of the CGST Act due date of issuance of notice would be 28.11.2024, whereas in the facts of the case, the show cause notice had been issued on 30.11.2024.
2.1. It was submitted that in the identical facts the Hon’ble 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 reported in 2025 (2) TMI 362 has quashed and set aside the order in original as the show cause notice was beyond the prescribed mandatory period of three months issued on 30.11.2024 instead of 28.11.2024.
2.2. Reliance was also placed on the decision of the Hon’ble Telangana High Court in the case of M/s. Sri Durga Bhavani Enterprises v. Assistant Commissioner State Tax reported in 2025 (4) TMI 1148 wherein, the aforesaid decision of the Hon’ble Andhra Pradesh High Court is followed. Learned advocate for the petitioner also referred to and relied upon the decision of the Hon’ble Apex Court in case of State of Himachal Pradesh & Anr., v. Himachal Techno Engineers & Anr., reported in (2010) 12 SCC 210 wherein it is held by the Honb’ble Apex Court that 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 on which the period starts. It was, therefore, submitted that in the facts of the case, three months would be over on 28.11.2024 and therefore, the show cause notice dated 30.11.2024 would be without jurisdiction and as a consequence thereof, the impugned order in original would be without jurisdiction.
Considering the above submissions, issue Notice returnable on 17.07.2025.
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Author Bio
a ratio emerging out of the two judgements i.e. Cotton Corporation & Shri Durga is that there has to be a mandatory gap of three months between issue of SCN & passing of Adjudication Order …. is that right … ?
GST: Section 73(2) and 73(10) of CGST Act conjointly permit Department to issue SCN upto three months prior to passing of assessment order; where assessment order was passed on 28.02.2025, SCN could have been issued upto 28.11.2024 and SCN being issued on 30.11.2024, assessment order could not sustain judicial scrutiny
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[2025] 173 taxmann.com 811 (Telangana) image
HIGH COURT OF TELANGANA
Sri Durga Bhavani Enterprises
v.
Assistant Commissioner State Tax*