By CA Arpit Haldia, an author of Books on GST
There has been much talk that whether under the provisions of Section 122 of CGST Act, 2017 read with Section 127 of CGST Act, 2017 and Rule 142(1) of CGST Rules, 2017, is there any time limit applicable for taking the Action. Lest consider for the sake of making argument, that there is none, then in such cases what would be the time limit.
A similar proposition came before the Apex Court in the matter of State of Jharkhand v. Shivam Coke Industries [2011] 10 http://taxmann.com 561 (SC) wherein under the concerned statute, there was no period of limitation prescribed for initiation of suo motu revisional proceeding by the Joint Commissioner. The question was whether the action of Joint Commissioner of Commercial Taxes was valid wherein exercising the power vested on him under Section 46(4) of the Bihar Finance Act, 1981, which power in most cases concerning the appeals was exercised by him within a period of three years but in some other cases beyond the expiry of three years period, but soon thereafter.
The Court observed as follows-
1️⃣ If the legislature intended to provide for any period of limitation or intended to apply the said provision of Article 137 into Section 46(4), the legislature would have specifically said so in the Act itself. Therefore, the High Court wrongly read application of Section 137 of the Limitation Act to Section 46(4) of the BFT Act.
2️⃣ The court however agreed with the position that such a power cannot be exercised by the revisional authority indefinitely.
3️⃣ The court then referred to various decision on the issue[1], and held that it is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors.
4️⃣ Thus, it was concluded that the power exercised within about three years or soon after the expiry of three years cannot be said to be unreasonable by any stretch of imagination. Three years period cannot be said to be a very long period and thus the power was exercised within a reasonable period of time.
Conclusion-Reference is to be made to nature of statute, rights and liabilities thereunder and other relevant factors and also to the concluding lines of the court “three years period cannot be said to be a very long period”.
So what would be a very along period for GST for Section 122, if at all, there is no period for initiating action..5 Years or much longer..
[1] Sulochana Chandrakant Galande v. Pune Municipal Transport and Others (2010) 8 SCC 467, Govt. of India v. Citedal Fine Pharmaceuticals, Madras (1989) 3 SCC 483, State of Punjab Sc Ors. v. Bhatinda District Cooperative Milk Producers Union Ltd. (2007) 11 SCC 363
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