M/S Blue Phosphate LTD. vs. Union Of INDIA

Held

The Court held that the amendment to Explanation 2 Proviso (e) to Section 54(1) of the CGST Act, 2017, brought about on February 1, 2019, is prospective in nature, as it was not specifically stated to be retrospective. Consequently, the two-year period for filing the return, if counted from February 1, 2019, would expire on March 1, 2021. Since the petitioner submitted its return on March 17, 2020, it was filed within the period of limitation. The Court set aside the impugned orders and remanded the matter back to the Assistant Commissioner, CGST, Division-A, Udaipur, for assessment of the return. The Court explicitly noted that the remand was based solely on the question of limitation, and the merits of the case were not considered.

Facts

The petitioner, M/s Blue Phosphate Ltd., attempted to upload its GST return on July 9, 2019, but encountered a technical glitch. An email was sent to the department on the same day, but no response was received. The physical copy of the return was not accepted by the department. The petitioner ultimately uploaded the return on March 17, 2020. The respondents argued that the return was filed beyond the period of limitation, as two years had lapsed since July 2017, and the return should have been filed by August 25, 2019. This contention was based on an amendment to Explanation 2 Proviso (e) to Section 54(1) of the CGST Act, 2017, brought about on February 1, 2019.

Key Issues

1. Whether the amendment to Explanation 2 Proviso (e) to Section 54(1) of the CGST Act, 2017, effective from February 1, 2019, is retrospective or prospective in nature, and how it impacts the limitation period for filing the petitioner's GST return? Petitioner's Argument: The petitioner contended that the amendment, not being explicitly retrospective, should be applied prospectively. They argued that the return was uploaded within two years from the amendment's effective date, and the original due date for filing was March 31, 2020. The petitioner also highlighted that the respondents did not dispute the existence of a technical glitch. Revenue's Argument: The respondents argued that two years had elapsed since July 2017, and the return filed on March 17, 2020, was beyond the limitation period. They relied on the amendment to Explanation 2 Proviso (e) to Section 54(1) of the CGST Act, 2017, which they claimed made the period of two years end on August 25, 2019.