Understanding GST Circular 157/13/2021: Extension of Limitation Period Under Supreme Court Order

02March

Understanding GST Circular 157/13/2021: Extension of Limitation Period Under Supreme Court Order

<p>March 1, 2025</p><p class="whitespace-pre-wrap break-words">The COVID-19 pandemic necessitated various regulatory relaxations across different sectors, including taxation. One significant clarification came through Circular No. 157/13/2021-GST issued on July 20, 2021, which addressed the extension of limitation periods under GST law in accordance with the Supreme Court's order dated April 27, 2021. Let's break down the key highlights of this circular.</p><h2 class="text-xl font-bold text-text-200 mt-1 -mb-0.5">Background</h2><p class="whitespace-pre-wrap break-words">The Supreme Court, in its order dated April 27, 2021, extended the periods of limitation for all judicial and quasi-judicial proceedings due to the ongoing pandemic. This raised questions about which GST-related proceedings would benefit from this extension, prompting the Central Board of Indirect Taxes and Customs (CBIC) to issue clarifications.</p><h2 class="text-xl font-bold text-text-200 mt-1 -mb-0.5">Key Highlights of the Circular</h2><h3 class="text-lg font-bold text-text-200 mt-1 -mb-1.5">1. Scope of the Supreme Court Order</h3><p class="whitespace-pre-wrap break-words">The Supreme Court's extension applies <strong>only</strong> to:</p><ul class="[&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-disc space-y-1.5 pl-7"><li class="whitespace-normal break-words">Judicial proceedings</li><li class="whitespace-normal break-words">Quasi-judicial proceedings related to petitions, applications, suits, appeals, and similar proceedings</li><li class="whitespace-normal break-words">The order was passed under Article 142 read with Article 141 of the Constitution, making it binding on all Courts, Tribunals, and Authorities</li></ul><h3 class="text-lg font-bold text-text-200 mt-1 -mb-1.5">2. Categorization of GST Proceedings</h3><p class="whitespace-pre-wrap break-words">The circular categorizes GST proceedings into three types:</p><h4 class="text-base font-bold text-text-200 mt-1">a) Taxpayer-initiated proceedings and compliances</h4><ul class="[&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-disc space-y-1.5 pl-7"><li class="whitespace-normal break-words">These continue to be governed by statutory timelines or extensions granted under the GST law itself</li><li class="whitespace-normal break-words">The Supreme Court's order does not extend timelines for regular compliances such as filing returns, payment of tax, etc.</li></ul><h4 class="text-base font-bold text-text-200 mt-1">b) Quasi-judicial proceedings by tax authorities</h4><ul class="[&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-disc space-y-1.5 pl-7"><li class="whitespace-normal break-words">Tax authorities can continue to hear and dispose of proceedings where they function as quasi-judicial authorities</li><li class="whitespace-normal break-words">This includes processing refund applications, revocation of registration cancellation, and adjudication of demand notices</li><li class="whitespace-normal break-words">These proceedings are not halted by the Supreme Court's order</li></ul><h4 class="text-base font-bold text-text-200 mt-1">c) Appeals against quasi-judicial orders</h4><ul class="[&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-disc space-y-1.5 pl-7"><li class="whitespace-normal break-words">This is where the Supreme Court's extension <strong>does apply</strong></li><li class="whitespace-normal break-words">Appeals to be filed before Joint/Additional Commissioner (Appeals), Commissioner (Appeals), Appellate Authority for Advance Ruling, Tribunals, and various courts</li><li class="whitespace-normal break-words">Revision or rectification proceedings of any order</li><li class="whitespace-normal break-words">The limitation period for such appeals stands extended per the Supreme Court's order</li></ul><h3 class="text-lg font-bold text-text-200 mt-1 -mb-1.5">3. Proceedings Not Covered by the Extension</h3><p class="whitespace-pre-wrap break-words">The circular explicitly clarifies that the following actions are <strong>not covered</strong> by the Supreme Court's extension:</p><ul class="[&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-disc space-y-1.5 pl-7"><li class="whitespace-normal break-words">Scrutiny of returns</li><li class="whitespace-normal break-words">Issuance of summons</li><li class="whitespace-normal break-words">Search and seizure operations</li><li class="whitespace-normal break-words">Investigations</li><li class="whitespace-normal break-words">Consequential arrests under GST law</li><li class="whitespace-normal break-words">Issuance of show cause notices</li><li class="whitespace-normal break-words">Time for replies to notices</li><li class="whitespace-normal break-words">Passing of orders</li></ul><h2 class="text-xl font-bold text-text-200 mt-1 -mb-0.5">Implications for GST Stakeholders</h2><ol class="[&:not(:last-child)_ul]:pb-1 [&:not(:last-child)_ol]:pb-1 list-decimal space-y-1.5 pl-7"><li class="whitespace-normal break-words"><strong>For Taxpayers</strong>: Regular compliance requirements remain unchanged. However, if you need to file an appeal against any order, you benefit from the extended limitation period.</li><li class="whitespace-normal break-words"><strong>For Tax Authorities</strong>: Most administrative and enforcement functions can continue without being affected by the Supreme Court's order. Only the timeline for filing departmental appeals is extended.</li><li class="whitespace-normal break-words"><strong>For Legal Representatives</strong>: Clear distinction between proceedings that get extension benefits and those that don't helps in providing accurate advice to clients regarding limitation periods.</li></ol><p> </p><p> </p>

Understanding GST Circular 157/13/2021: Extension of Limitation Period Under Supreme Court Order

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