"Limitation is the Law: Telangana High Court Quashes GST Order Passed One Day Late"
Introduction
In tax adjudication, timelines are not mere guidelines but mandatory legal safeguards. The Telangana High Court's decision in M/s Lakshmi Bhanu Steel Traders v. Assistant Commissioner (ST), Madhapur-2 Circle & Ors. [2025(06)LCX0524] reaffirms that an order passed even a single day beyond the prescribed limitation period under Section 73 of the CGST/SGST Act, 2017 is without jurisdiction and liable to be quashed.
This ruling reinforces the principle that statutory limitation binds both taxpayers and tax authorities equally, ensuring certainty, fairness, and the prevention of arbitrary action.
Facts of the Case
The petitioner, a GST-registered dealer, challenged an order dated 01.05.2024 passed by the Assistant Commissioner (ST), along with the corresponding summary in Form GST DRC-07 and garnishee proceedings.
Key grounds of challenge included:
1. The order was barred by limitation-it was passed one day after the expiry of the permissible time under Section 73(10) of the CGST/SGST Act.
2. The proceedings lacked digital or physical signature.
3. The DRC-01 summary was issued without granting the statutory three months' time under Section 73(2).
4. No Document Identification Number (DIN) was generated, contrary to CBIC Circular No. 122/41/2019-GST dated 05.11.2019.
5. Violation of principles of natural justice.
Court's Observations
Both parties fairly admitted that the last permissible date to pass the order was 30.04.2024, yet the impugned order was issued on 01.05.2024.
The case was squarely covered by a recent Telangana High Court ruling in WP No. 10895 of 2025 (dated 12.06.2025), which held that orders passed beyond the statutory time limit are void.
Given this consensus, the Court set aside the impugned order and directed revocation of the consequential bank attachment.
Decision
Order dated 01.05.2024 quashed as being time-barred.
Bank attachment revoked.
Writ petition allowed, no order as to costs.
Legal Takeaways
1. Strict Limitation under Section 73 - Sub-section (10) mandates that orders for non-fraud cases must be passed within three years from the due date for annual return. Even a one-day delay renders the order without jurisdiction.
2. Consent and Concession - Where both parties agree on limitation breach, courts can summarily dispose of the matter.
3. Procedural Compliance - Absence of DIN, improper issuance of DRC-01, and missing signatures further weaken the Revenue's case.
4. Impact on Recovery Proceedings - Once the main order is set aside, consequential recovery actions like bank garnishee notices must also be withdrawn.
Relevant Rulings Supporting the Principle
1. Gulf Oil Lubricants India Ltd. v. Union of India - (Telangana HC) Held that orders passed beyond limitation under Section 73 are void and unenforceable.
2. Mohammed Farhan A. Shaikh v. DCIT - The Supreme Court emphasized that procedural timelines in tax law are sacrosanct and must be adhered to.
3. M/s Rohan Motors Ltd. v. State of U.P. - Quashed assessment orders passed beyond the statutory time frame.
4. Telangana HC in WP No. 10895 of 2025 (decided on 12.06.2025)
Identical fact pattern-order passed one day late-held to be without jurisdiction.
Conclusion
The Telangana High Court's decision is a clear warning to tax authorities: the statutory clock cannot be ignored. It reiterates that time-barred orders are non est in law and that procedural compliance is as important as substantive assessment. For taxpayers, it serves as a reminder to vigilantly track limitation dates in all GST proceedings and challenge delayed orders promptly.
Disclaimer: The information given in this article is solely for purpose of understanding the law. It is completely based on the interpretation of the author and cannot be constituted as a legal advise, the author of this article and Lawcrux team is not responsible for any legal issues if arises on the basis of the interpretation given above.