The Government of Tamil Nadu has clarified on the applicability of provisions of section 75(2) of the Tamil Nadu Goods and Services Tax (TNGST) Act, 2017, and its effect on limitation. The said clarification was issued on 4th January, 2023.
TNGST Act provides that an order, required to be issued in pursuance of the directions of the appellate authority or appellate tribunal or the court, has to be issued within two years from the date of communication of the said direction.
In cases that do not involve fraud or willful misstatement or suppression of facts to evade payment of tax, a show cause notice has to be issued within 2 years and 9 months from the due date of furnishing of annual return for the financial year to which such tax not paid or short paid or input tax credit wrongly availed or utilized relates, or within 2 years and 9 months from the date of erroneous refund.
In cases, where the show cause was issued for tax short paid or not paid tax or wrongly availed or utilized input tax credit or on account of erroneous refund within 2 years and 9 months from the due date of furnishing of the annual return for the said financial year, to which such demand relates to, or from the date of an erroneous refund, as the case may be, the entire amount of the said demand in the show cause notice would be covered under pre-determined amount.
Where the show cause notice was issued for multiple financial years and where notice had been issued before the expiry of the time period for one financial year but after the expiry of the said due date for the other financial years, then the amount payable shall be re-determined only in respect of that financial year for which show cause notice was issued before the expiry of the time period .