Court’s Key Observations

The Court clarified that Section 73(2) is intended to provide a meaningful opportunity of hearing to the taxpayer. The three-month period is necessary to enable filing of replies, conduct of personal hearings, grant of adjournments, and exercise of the option for voluntary payment under Section 73(5). Any reduction in this statutory time defeats the principles of natural justice.

The Court rejected the department’s argument that the three-month gap applies only when notices are issued close to the limitation period. It held that the requirement applies in all cases, regardless of when the SCN is issued.

Decision of the Court

Since the SCN was issued on 18 November 2024 and the final order was passed on 31 January 2025, the statutory three-month gap was not maintained. Accordingly, the SCN and the final order were quashed, and the matter was remanded for fresh adjudication in accordance with law.

Key Takeaway for Taxpayers

GST adjudication orders passed without observing the mandatory three-month gap under Section 73 are liable to be set aside, even if issued within the limitation period.

To download official order, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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The Central Board of Indirect Taxes and Customs (CBIC) has issued Circular No. 254/11/2025-GST dated 27th October 2025, to assign proper officers under key provisions of the Central Goods and Services Tax Act, 2017 (“CGST Act”). This move fills an important administrative gap by officially designating officers responsible for actions under the newly introduced Section 74A, Section 75(2), and Section 122, along with Rule 142(1A) of the CGST Rules, 2017.

Key Provisions Covered

Assignment of Proper Officers

CBIC, in exercise of its powers under Section 2(91) of the CGST Act and Section 20 of the IGST Act, has designated the following officers as “proper officers” for the said provisions:

Monetary Limits for Show Cause Notices and Orders

To ensure efficient workload distribution, the circular prescribes monetary thresholds for each officer level for issuance of SCNs and passing orders under Sections 74A and 122.

Note:

• Where both CGST and IGST are involved, the combined amount will determine the proper officer’s jurisdiction.

• Penalties are excluded when determining the officer for adjudication under Section 74A.

• If subsequent statements (for later periods) increase the total tax beyond the officer’s prescribed limit, the earlier SCN must be made answerable to a higher authority through a corrigendum.

• When an Audit Commissionerate issues an SCN, any follow-up statements will be made answerable to the jurisdictional adjudicating authority, not the audit officer.

Example:

If an Assistant Commissioner issues an SCN involving Rs.18 lakh CGST and Rs.25 lakh IGST (combined Rs.43 lakh), the matter exceeds Rs.20 lakh combined limit of the Superintendent, hence the Deputy/Assistant Commissioner will act as the proper officer.

Clarification for Section 75(2)

• Under Section 75(2), when a court or tribunal concludes that a fraud-based notice (u/s 74) was incorrectly issued, the matter must be re-determined as a non-fraud case (u/s 73).

• The circular clarifies that the same adjudicating officer who handled the original notice will also handle the fresh determination, maintaining continuity and preventing duplication or jurisdictional overlap.

Practical Implications

• Uniform Implementation: The circular eliminates ambiguity regarding the authority of officers under the new and existing provisions.

• Clarity in Adjudication: Monetary thresholds now guide officers in issuing SCNs and adjudicating orders, ensuring consistency.

• Alignment with FY 2024–25 onwards: Section 74A becomes operative from FY 2024–25, marking a clear shift in GST enforcement.

• Reduced Litigation: Clear designation of officers may prevent procedural disputes regarding jurisdiction.

Conclusion

This circular is a significant administrative step towards strengthening GST compliance and enforcement under the revised adjudication framework introduced by Finance (No. 2) Act, 2024. Businesses and practitioners should take note of the monetary limits, officer jurisdictions, and the applicability of Section 74A from FY 2024–25.

To download official circular, Click Here

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship. The information on this site is not intended to be a substitute for professional advice.”

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Under the authority granted by Section 128 of the Central Goods and Services Tax Act, 2017 (12 of 2017), and following the recommendations made by the GST Council, the Central Government has issued a notification to waive the late fees outlined in Section 47 of the CGST Act.

This waiver applies specifically to the return required to be filed u/s 44 of the CGST Act for the financial years 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, and 2022-23.

The waiver covers late fees that exceed the amount due under Section 47 of the CGST Act up to the date on which FORM GSTR-9 for the relevant financial year is filed. It applies to registered taxpayers who were obligated to submit the reconciliation statement in FORM GSTR-9C along with their annual return in FORM GSTR-9 but failed to do so by the prescribed due date. These taxpayers must now file FORM GSTR-9C by 31^st March 2025, to benefit from the waiver.

The notification specifies that the late fee waiver applies only to the excess fees beyond what would be due under Section 47 of the CGST Act, up until the submission date of FORM GSTR-9 for the respective financial year. This means taxpayers will not be required to pay the full late fee amount for delayed filings but will still need to meet the original filing requirements.

However, it is crucial to note that the waiver does not extend to any refund for late fees that have already been paid by taxpayers for the delayed submission of FORM GSTR-9C. This means that if taxpayers have already cleared the late fee amount, they will not be entitled to any reimbursement or reduction of those fees, even after the waiver is granted.

The government’s decision to offer this late fee waiver aims to encourage taxpayers to file the pending FORM GSTR-9C forms, thereby reducing the overall compliance burden and helping taxpayers stay in line with GST regulations.

It is hoped that this measure will incentivize taxpayers to complete the filing process within the extended deadline of 31^st March 2025, and avoid further penalties or legal complications. Taxpayers are strongly advised to take advantage of this relief by submitting their pending reconciliation statements within the stipulated timeline to ensure compliance and prevent future issues.

Government Waives Late Fees for Pending GSTR-9C Filings

To download official notification, click here.

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M. Trade Links vs Union of India [WP(C) No. 31559 of 2019]

The petitioners who were registered dealers under the provisions of the CGST Act and SGST Act, 2017 are not being allowed to claim input tax credit even though they have a valid tax invoice, evidence that they had paid the value of the goods and the applicable GST components to the relevant suppliers, and proof that they had received the goods. It is said that in certain instances, the relevant supplier has remitted the tax (GST), but for technical reasons it did not appear in their GSTR return.

On behalf of the respondents, it is submitted that under the GST laws, the tax collected must be assigned to the jurisdiction where the consumption takes place. Therefore, ITC passes through the state during inter-state supplies. If the inter-state supplier does not pay tax (SGST+CGST) and the inter-state supplier is allowed to take credit on his invoice, the originating State Government will have to transfer amounts it never received in the tax periods in a financial year to the destination States. This would cause damage to the state to the extent that the originating state would have to transfer the amount without receiving it, and this scenario would violate the entire tax system in the absence of Section 16(2)(c).

The Kerala High Court recognized the difficulties faced during the initial rollout of the GST system in the financial years 2017-2018 and 2018-2019. The government acknowledged these issues and issued Circulars No. 183/15/2022-GST and 193/05/2023-GST to address genuine claims and errors from that period. These circulars cover the period from the start of GST until Section 16(2)(aa) was introduced on January 1, 2022.

Recipients can claim Input Tax Credit (ITC) for valid scenarios listed in the circulars if they provide proof of payment to the government by the supplier. Petitioners who couldn’t benefit from these circulars within the prescribed time limit can approach the GST authority within 30 days to claim their benefits. The GST authorities will review and grant applicable relief to eligible dealers based on these circulars.

Before the 2022 amendment, the deadline for filing returns for September under Section 39 was September 30. The amendment extended this deadline to November 30 to ease initial compliance difficulties.

Therefore, if a dealer filed their return after September 30 but before November 30 from July 1, 2017, to November 30, 2022, their ITC claim should be processed if they are otherwise eligible. This procedural amendment is given retrospective effect due to the initial challenges in implementing GST. The challenge to the constitutional validity of Sections 16(2)(c) and 16(4) is rejected.

To Download official order, click here. 

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The Allahabad High Court dismissed several petitions against Section 73 GST notices, citing the extended period of limitation. The petitioners challenged adjudication proceedings for F.Y. 2017-18, citing issues such as adjudication orders exceeding show cause notice, violating principles of natural justice, and correction of GSTR-3B. The Senior Advocate argued that the legislature did not intend to grant blanket time extension.

The general power to grant extension in Section 172 of the CGST Act is subject to the direct check of the legislature, and the government must seek approval from the respective legislative body. Therefore, there was no extension of time to file the Annual Return for F.Y. 2017-18 beyond 07.02.2020 or pass an adjudication order beyond 06.02.2023. Notification No. 14 of 2021 did not affect the limitation to pass the adjudication order for F.Y. 2017-18, as the period of limitation, extended up to 30.06.2021, was only for acts that could not be completed or compiled during 15.03.2020 to 20.08.2020.

The counsel argued that the impugned notifications are ultra vires to Section 168A of the CGST Act, as they could have been issued due to ‘force majeure’ circumstances. The counsel also argued that the impugned notifications are discriminatory, as they partially modified earlier notifications issued by the Central and State Governments. The revenue counsel argued that inconsistency can be determined not solely by the language of Section 168A but also by examining the context in which it has been incorporated. The court found the exercise of power unreasonable.

The Explanation of Section 168A of the CGST Act includes a residuary clause that includes events that may affect the implementation of the Act’s provisions. The Explanation’s last words expand its applicability to other circumstances not directly due to unforeseen and clearly definable “force majeure” circumstances. For example, disruption of revenue functioning over a long period could fall under the “otherwise affected the implementation of the Act” description. This discussion is also mentioned in the Council’s minutes.

The Central and State Governments’ actions are in line with Section 168A of the CGST Act. The Central Board of Indirect Taxes and Customs (CBIC) argued that neither the Council nor the Government acted mechanically. The Explanation to the section offers an inclusive definition of “force majeure” such as war, epidemic, flood, drought, fire, cyclone, earthquake, or any other calamity caused by nature. The power may be exercised in situations where the implementation of the CGST Actmay be impaired, necessitating extension of time limits. The recommendation of the Council to issue notifications to extend time limits exists.

The bench emphasized that the COVID-19 pandemic has had the darkest period in recent history, disrupting human activities across all continents and leaving no strata of society unaffected. They also noted that the last date for filing the Annual Return for the F.Y. 2017-18 was extended to 7.2.2020, preventing any scrutiny or audit from being conducted before that day. The Division Bench concluded that the revenue authorities were not merely experiencing difficulties, but rather a temporary or transient impairment.

The revenue authorities were disabled due to COVID-19, but life continued with businesses and monthly and annual returns filed. Legislative decisions were made to address the disruption, and the Proper Officer’s authority remained independent of audit and scrutiny.

The CGST Act has specific provisions that dictate the procedure for implementing laws. The court ruled that if a legislature acts to provide for a law related to a specific circumstance or mischief, no fault can be found. The court also noted that the Council’s partial modification of the first-time extension was within legislative wisdom. The court dismissed writ petitions challenging the issuance of the notifications, stating that adjudication proceedings may recommence and be concluded after excluding the extended limitation. The court also stated that petitioners have 45 days to file appeals.

To download official order, click here.

“The site is for information purposes only and does not provide legal advice of any sort. Viewing this site, receipt of information contained on this site, or the transmission of information from or to this site does not constitute an attorney-client relationship.
The information on this site is not intended to be a substitute for professional advice.”

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