Case Reference
Baazar Style Retail Limited v. Additional Commissioner, CGST and Central Excise, Kolkata North Commissionerate & Anr.
Calcutta High Court
WPA 5232 of 2025
Judgment dated: 16.04.2025
Relevant Sections: Section 74, Section 73(5) & (6), Section 122(1)(iv) of CGST/WBGST Act, 2017
Category: Extended period of limitation – ITC and delayed payment of GST
Facts (Paras 3–7)
The petitioner, Baazar Style Retail Ltd., challenged an order dated 16 January 2025 passed under Section 74 of the CGST/WBGST Act for the period March–May 2019. The dispute stemmed from a show cause-cum-demand notice dated 30 September 2022, uploaded in DRC-07 on 4 February 2025. The petitioner argued that delayed payment of GST alone cannot justify invocation of the extended period of limitation under Section 74. It relied on Section 73(5) & (6), contending that timely tax payment with interest excludes issuance of notice, and also on Section 122(1)(iv), which grants three months before penalty for unpaid collected tax. The petitioner further argued that ITC was available in its ledger, and allegations of bogus invoices from non-existent suppliers were unjustified.
Dispute / Questions (Paras 4–8, 10–12)
The central issue was whether the extended period of limitation under Section 74 could be invoked for (i) delayed payment of GST later regularized, and (ii) availing ITC on invoices issued by non-existent suppliers without receipt of goods. The petitioner questioned maintainability of proceedings after payment, while the department defended its action citing investigation findings, suppression of outward supplies, and bogus ITC claims.
Observations (Paras 10–16)
The Court noted that the extended period was invoked on two distinct grounds: (a) ITC claimed on invoices of five non-existent entities without goods received, and (b) suppression of outward supplies detected during DGGI investigation. The Court acknowledged petitioner’s reliance on Adecco Fexione (2012) and Uniworth Textiles (2013), where mere non-payment was held insufficient for invoking extended limitation. However, the Court distinguished these, noting that in the present case, detection arose only after investigation and not suo motu payment by the petitioner. Since no contemporaneous challenge was raised to the SCN, and factual issues were best examined in appeal, the High Court declined to interfere.
Judgment / Verdict (Paras 17–19)
The writ petition was disposed of with liberty to the petitioner to pursue statutory appeal. The Court directed that limitation for appeal be reckoned from the date of uploading the order (4 February 2025) and excluded the period during which the writ remained pending. Thus, the appeal period was effectively extended. The Court clarified that the appellate authority shall decide uninfluenced by its prima facie observations.
Cases Referred
| Case | Citation | Verdict / Principle |
|---|---|---|
| CCE & ST, LTU, Bangalore v. Adecco Fexione Workforce Solutions Ltd. | 2012 (26) S.T.R. (Kar) | Held that without investigation or fraud, mere delayed payment does not justify extended limitation. |
| Uniworth Textiles Ltd. v. CCE, Raipur | 2013 (288) E.L.T. 161 (SC) | Supreme Court held that mere non-payment of duty is not equivalent to collusion or willful misstatement. |
| The Statesman Ltd. v. Joint Commissioner, CGST | MAT 982 of 2023 (Cal HC, unreported) | Division Bench entertained writ on limitation when SCN was clearly beyond time. Distinguished on facts in present case. |
Between Fine Lines
For businesses, this ruling highlights that courts may not interfere at writ stage where investigation reveals ITC claims on fake invoices or suppression of sales. Even if tax and interest are later paid, extended limitation under Section 74 can still apply. The proper course is to challenge such issues in appeal, not through writ petitions, unless the SCN itself is ex facie time-barred.
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