GST Demand Proceedings: Revised Deadlines for SCN and Orders Under Section 73 & 74 (FY 2017-18 to FY 2023-24)
The GST framework prescribes specific limitation periods within which the tax authorities must issue Show Cause Notices (SCNs) and adjudication orders for demand proceedings. These limitation periods are anchored to the due date of filing the annual return (GSTR-9) for the relevant financial year. Over the years, multiple notifications have extended these due dates — particularly during the COVID-19 pandemic — which has had a cascading effect on the deadlines for issuing SCNs and orders under Section 73 and Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act).
Understanding these revised timelines is critical for assessees as well as tax practitioners, since proceedings initiated beyond the prescribed limitation period are legally unsustainable. This article consolidates the revised deadlines across financial years from FY 2017-18 to FY 2023-24, taking into account all relevant Central Tax (CT) notifications.
Statutory Framework: Sections 73 and 74 of the CGST Act
Before examining the year-wise timelines, it is important to appreciate the statutory structure that governs these limitation periods.
Section 73 – Non-Fraud Cases
Section 73 of the CGST Act applies to cases involving short payment, non-payment, erroneous refund, or wrongful availment of Input Tax Credit (ITC) where fraud or wilful misstatement is not alleged. The provision mandates:
- The SCN must be issued at least 3 months prior to the time limit for issuance of the order.
- The adjudication order must be issued within 3 years from the due date for filing the annual return for the financial year to which the short-paid or unpaid tax relates, or from the date of erroneous refund.
Section 74 – Fraud Cases
Section 74 applies where fraud, suppression of facts, or wilful misstatement is involved. The limitation periods are extended significantly:
- The SCN must be issued at least 6 months prior to the time limit for issuance of the order.
- The adjudication order must be issued within 5 years from the due date for filing the annual return for the relevant financial year, or from the date of erroneous refund.
Section 168A – Power to Extend Timelines
Section 168A of the CGST Act empowers the Government, on the recommendations of the GST Council, to extend the timelines for completion of proceedings that fall within a specified period, where extraordinary circumstances (such as a pandemic or natural disaster) warrant such extension. Several notifications were issued under this provision, particularly during 2020, 2021, 2022, and 2023, which materially altered the deadline matrix.
How Annual Return Extensions Affect Limitation Periods
The limitation clock under Section 73 and Section 74 starts ticking from the due date of filing the annual return for the relevant financial year. When the Government extends the annual return due date through notifications, the limitation periods for issuing SCNs and orders automatically get pushed forward correspondingly.
Additionally, when proceedings themselves are extended under Section 168A, the deadlines shift further, independent of whether the annual return due date was extended.
This dual-layered impact — extensions to annual return deadlines combined with Section 168A extensions to proceedings — has resulted in a complex matrix of revised deadlines, detailed below for each financial year.