Introduction

This judgment is one of the most significant rulings on limitation under Section 74 and the scope of Section 6(2)(b) of the CGST Act. The Tripura High Court examined two important legal questions:

1. Whether extension of the due date for filing the Annual Return automatically extends the limitation for issuance of a Show Cause Notice under Section 74; and
2. Whether both Central GST and State GST authorities can simultaneously initiate adjudication proceedings on the same subject matter, particularly regarding excess availment of Input Tax Credit (ITC).

The Court answered both questions in favour of the assessee. It held that extension of the annual return due date does not extend the statutory limitation prescribed under Section 74, and that Section 6(2)(b) prohibits parallel adjudication by two tax authorities on the same issue. Consequently, the Court quashed the proceedings for FY 2017-18 as time-barred, set aside the proceedings relating to excess ITC for FYs 2018-19 and 2019-20, and remanded the matter for fresh adjudication only on the issues that legally survived.