Time limit for SCN or order under Section 74 of GST for FY 2019-20

 The time limit prescribed under the GST Act for issuing a show cause notice (“SCN”) is mandatory. Any violation of this prescribed period cannot be condoned and would render the SCN ineffective. It is well-settled that periods of limitation are mandatory, and no orders can be passed beyond the periods specified in the GST Act.

Time Limit for Issuance of SCN [Section 73(2) of the CGST Act, 2017]

Section 73(10) of the CGST Act, 2017, provides that an assessment order, in relation to any financial year, must be issued within three years from the due date for furnishing the annual return for that year.

Section 73(2) of the CGST Act stipulates that the SCN, which initiates the assessment proceedings under subsection (1), must be issued at least three months prior to the time limit specified under subsection (10) for issuance of the order. Therefore, the date of issuance of the SCN depends on the due date for passing the assessment order under section 73(10).

Accordingly, the proper officer shall issue the SCN at least three months before the expiry of the three-year period for issuance of the assessment order, i.e.:

• Before completion of three years from the due date for furnishing the annual return for the financial year to which the tax was not paid or short paid, or where input tax credit was wrongly availed or utilized; or
• Within three years from the date of the erroneous refund, as applicable.

Thus, the effective time-limit for issuance of an SCN in non-fraud or non-suppression cases is two years and nine months from the due date of filing the annual return for the financial year to which the demand relates, or from the date of the erroneous refund.

Checking the validity of SCN(s)- ‘Limitation Date’

 Section 73(2) of the CGST Act, 2017 specifies that a SCN should be issued at least three months prior to the issuance of an adjudication order. CBIC in exercise of its powers u/s 168A of the CGST Act, 2017 vide Notification No. 09/2023-CT dated 31.03.2023has extended the time limit for issuance of adjudication order for FY 2017-18, 2018-19 and 2019-20 pertaining to non-fraud cases under 73(9) of CGST Act, 2017. However, the time limit has been further extended by Notification No. 56/2023-CT dated 28.12.2023 for the FY 2018-19 and FY 2019-20. The summary position of the applicable time limits for issuance of SCNs may now be read as follows for the relevant financial years:

* Please note that for FY 2020-21 the deadline to issue a notice under section 73(2) of the CGST Act should be 28.11.2024 [M/s. The Cotton Corporation of India vs. Assistant Commissioner (ST) (Audit) (FAC) & ors. in W.P. No. 1463 of 2025, judgment dated 05.02.2025 of High Court of Andhra Pradesh at Amarvati].

Time Limit for Issuance of SCN [Section 74(2) of the CGST Act, 2017]

Section 74(10) of the CGST Act, 2017, provides that an assessment order relating to any financial year must be issued within five years from the due date for furnishing the annual return for that year.

Section 74(2) of the CGST Act stipulates that the show cause notice (SCN), which initiates the assessment proceedings under subsection (1), must be issued at least six months prior to the time limit specified under subsection (10) for issuance of the order. Therefore, the date of issuance of the SCN depends on the due date for passing the assessment order under section 74(10).

Accordingly, the proper officer shall issue the SCN at least six months before the expiry of the five-year period for issuance of the assessment order, i.e.:

• Before completion of five years from the due date for furnishing the annual return for the financial year to which the tax was not paid or short paid, or where input tax credit was wrongly availed or utilized; or
• Within five years from the date of the erroneous refund, as applicable.

 Thus, the effective time-limit for issuance of an SCN under Section 74 is four years and six months from the due date of filing the annual return for the financial year to which the demand relates, or from the date of the erroneous refund.

 Checking the validity of SCN(s)- ‘Limitation Date’

 Section 74(2) of the CGST Act, 2017 specifies that a SCN should be issued at least six months prior to the issuance of an adjudication order. Moreover, the time-limit for issuance of SCN is 4 years and 6 months from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from the date of erroneous refund. The original/extended due date of filing of Annual Return are as under-

In view of the extended date of filing of Annual Return, the time lime to issue SCN and adjudication order under section 74 are as under-

In view of the above, SCN under section 73 for the FY  2021-22 and SCN under Section 74 for FY 2019-20 may be issued upto 30^th September, 2025.

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