Implications of SC Orders on limitation period

by | Jun 18, 2021 | Outlook

Amidst second wave of Covid-19, the Supreme Court vide its Order dated April 27, 2021, restored relaxation that it granted earlier viz. extending limitation period for all legal proceedings. This Outlook intends to apprise you on implications of this Order.

Background 

The Supreme Court passed following Orders (‘SC Orders’) for extending limitation period:

Order date

Coverage

March 23, 2020

Period for all petitions / applications / suits / appeals / all other proceedings before all Courts / Tribunals from March 15, 2020, till further order to be excluded from statutory limitation period

March 8, 2021

Period from March 15, 2020 to March 14, 2021 to be excluded from statutory limitation period

April 27, 2021

Restored Order dated March 23, 2020 to exclude limitation period from March 15, 2020 till further notice from statutory limitation period. The Supreme Court stated that relaxation covered all quasi-judicial proceedings and will be binding on all authorities. The next date of hearing in this matter has been fixed for July 19, 2021

 

  • Basis the above, period falling between March 15, 2020, till further notice (‘Exclusion period’) should be excluded for computing statutory limitation period. Where statutory limitation period is expiring during Exclusion period, the Supreme Court held that such limitation period needs to be computed as follows:

Number of days falling in Exclusion period

Number of days available from expiry of Exclusion period

Less than 90 days

90 days

More than 90 days

Actual number of days

            *The SC may modify these timelines in its final Order             

NITYA Comments: 

The above relaxation shall apply to all judicial or quasi-judicial proceedings (including applications) such as petitions, issuance of SCNs, filing of appeals, refund applications etc. 

There is an issue regarding applicability of SC Orders on legislations wherein specific extension has been granted (like Notification No. 24/2021 – Central Tax dated June 1, 2021, issued under the CGST Act, extended limitation period for proceedings where due date is falling between April 15, 2021 to June 29, 2021 to June 30, 2021). A strict reading of Article 142 of the Constitution of India suggests that SC Orders will apply across India for all legislations. Even in GST Council’s Press Release dated May 28, 2021, it was clarified that SC Orders will prevail. Similarly, in CBDT Circular No.10/2021 dated May 25, 2021, it was clarified that taxpayers can take relaxation under specific law or SC Orders whichever is more beneficial. Despite this, jurisprudence developed on interpretation of Article 142 read with Article 141 suggests that power conferred under Article 142 is curative in nature and cannot override express provisions of substantive law. Basis this, the authorities can rightly insist on extended limitation period as per specific statute notwithstanding SC Orders. To avoid any dispute, Taxpayers can endeavor to adhere to extensions provided in the respective statutes rather than relying on blanket extension given under SC Orders.

 Hope you find this an interesting read. Please feel free to share your comments / feedback on the same.

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