Goods and Services Tax Practitioners’ Association VS Union Of India

The proceedings involved a writ petition filed by the Goods and Service Tax Practitioners’ Association, Mumbai, and its President, Shri Raj Pravin Shah, seeking relief under Articles 226 and 227 of the Constitution of India. Their primary request was for the respondents to extend the deadline for filing annual returns in the State of Maharashtra until the complete lifting of the lockdown or until the COVID-19 pandemic situation significantly improves. Additionally, they sought an extension of the limitation period for filing annual returns for the fiscal year 2019-20 in Maharashtra under section 44 of the GST Act.

During the proceedings, Mr. P. C. Joshi appeared as the learned counsel for the petitioners, while Mr. Anil Singh, the learned Additional Solicitor General, along with Mr. P. S. Jetly, learned senior counsel, Mr. J. B. Mishra, and Mr. Devesh Tripathi, represented respondent Nos. 1 and 3. Ms. Jyoti Chavan, the learned AGP, represented respondent No. 2, the State.

The petitioners based their plea on the exceptional circumstances brought about by the COVID-19 pandemic and the subsequent lockdown measures. They argued that these circumstances had severely impacted businesses, hindering their ability to comply with statutory obligations such as filing annual returns within the prescribed timelines. Therefore, they urged the court to intervene and direct the respondents to extend the deadline until the situation normalizes.

Conversely, the respondents presented their arguments opposing the petitioners’ request. They likely emphasized the existing legal provisions and the potential ramifications of altering deadlines, balancing the need for compliance with the practical challenges faced by businesses during the pandemic.

The court would have carefully considered the submissions from both sides, weighing the legal framework, precedent, and the unique circumstances presented by the pandemic. Ultimately, the decision would hinge on various factors, including the interpretation of relevant laws, the extent of the pandemic’s impact on businesses, and the equitable balancing of interests between compliance requirements and practical constraints.

The outcome of the case would depend on the court’s assessment of these factors and its determination of the appropriate course of action in light of the petitioners’ concerns and the broader legal and public interest considerations involved.

The petitioners argued that according to Section 44 of the Central Goods and Services Tax Act, 2017 (CGST Act) and Rule 80 of the Central Goods and Services Tax Rules, 2017 (CGST Rules), every registered person is mandated to file an annual return for each financial year in electronic form before December 31 following the end of such financial year. For the financial year 2019-20, the deadline for filing such annual return was initially December 31, 2020. However, this deadline was extended to February 28, 2021, through Notification No. 95/2020 dated December 30, 2020.

They further asserted that despite the passage of time, the COVID-19 pandemic, particularly in Maharashtra, had not subsided. They highlighted a recent increase in COVID-19 cases and ongoing lockdown measures in various parts of the state. Additionally, they noted that the filing of annual returns is contingent upon the finalization of audit reports under the Income Tax Act, 1961. While the usual deadline for finalizing audit reports under the Income Tax Act is September 30 of the preceding year, for the financial year 2019-20, this deadline was extended to January 15, 2021. Consequently, chartered accountants responsible for filing annual returns under the CGST Act would have less than 45 days after the finalization of audit reports under the Income Tax Act to file annual returns under Section 44 of the CGST Act.

Due to these reasons, the petitioners made representations to the concerned authorities, seeking an extension of the deadline for filing annual returns. However, since no favorable action was taken, they approached the court seeking relief under Articles 226 and 227 of the Constitution of India. Their primary request was for the court to direct the respondents to further extend the deadline for filing annual returns in Maharashtra until the complete lifting of the lockdown or until the COVID-19 situation significantly improves. Additionally, they sought an extension of the limitation period for filing annual returns for the fiscal year 2019-20 in Maharashtra under Section 44 of the GST Act.

The petitioners, after receiving no response to their representations, pursued further action before the Grievance Redressal Committee in Pune on January 8, 2021. When this avenue also yielded no decision, they escalated the matter to the Goods and Services Tax (GST) Council on February 11, 2021. However, with no resolution forthcoming, they initiated the present writ petition seeking the reliefs mentioned earlier.

Mr. Joshi, the learned counsel for the petitioners, pointed out an amendment to Section 44 of the Maharashtra Goods and Services Tax Act, 2017, which introduced a proviso allowing the Commissioner, upon the recommendation of the GST Council and with written reasons, to extend the time limit for furnishing annual returns for specified classes of registered persons. He argued that such an extension, notified by the Commissioner of Central Tax, would automatically apply under the Maharashtra Goods and Services Tax Act, 2017. Moreover, he emphasized that the revenue would not suffer any loss due to this extension, urging that discretionary power be exercised by the Commissioner in the interest of justice, given the genuine hardships faced by the petitioners and other taxable persons.

Mr. Joshi also referenced Section 168A of the Maharashtra Goods and Services Tax Act, 2017, which permits the extension of time limits in cases where the furnishing of annual returns cannot be completed or complied with due to force majeure, including epidemics like COVID-19 in this instance.

He further cited a judgment by the Rajasthan High Court on February 5, 2020, in the case of Tax Bar Association vs. Union of India. In this case, the Court directed that the Tax Bar Association and the represented assesses could continue uploading their returns without incurring late fees until February 12, 2020. This precedent was mentioned to underscore the possibility and legality of extending deadlines during extraordinary circumstances, as recognized by the judiciary.

These arguments aimed to persuade the court to grant the requested relief, considering both the legal framework and the exceptional circumstances brought about by the COVID-19 pandemic.

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