HC upholds validity of extending assessment orders' time limit during Covid

The Kerala High Court has affirmed the validity of the Centre's decision to extend the timeline for issuing assessment orders following show cause notices for Goods and Services Tax (GST) returns filed during the pandemic. The judgement came in response to a specific case involving a petitioner contesting assessment orders issued by GST officials. \r

The petitioner argued that the orders were time-barred and that their output tax liability was not accurately reflected in the relevant form. This decision could have implications for numerous similar petitions filed by businesses across various courts. The government's extension of the assessment order timeframe for GST returns filed during the Covid-19 period, spanning from 2017-18 to 2019-20, was influenced by the GST Council's recommendations. \r

Utilizing a force majeure clause, the Union government justified the extension, citing the pandemic's disruptive impact on economic activities. The court upheld this rationale, emphasizing Covid-19's unprecedented nature as a force majeure event. \r

As such, it dismissed challenges to the notifications and set a potential precedent for similar cases. Tax experts recommend that businesses review their tax filings, particularly reconciliations, for the years leading up to 2019-20 to mitigate any potential tax liabilities.