Surya Business Private Limited vs The State Of Assam And 2 Ors

Page No.# 1/17
GAHC010044662026

2026:GAU-
AS:13601-DB

THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WA/64/2026
SURYA BUSINESS PRIVATE LIMITED
A PVT. LTD CO INCORPORATED UNDER THE PROVISIONS OF THE
COMPANIES ACT 1956 HAVING ITS PLACE OF BUSINESS AT GAR ALI,
JORHAT, ASSAM 785001 AND IN THE PRESENT PROCEEDINGS
REPRESENTED BY SRI SUBHAJIT ROY, THE BRANCH MANAGER OF THE
PETITIONER COMPANY.
VERSUS
THE STATE OF ASSAM AND 2 ORS
REPRESENTEDBY SECRETARY TO THE GOVT. OF ASSAMLR
DEPARTMENT, DISPUR, GUWAHATI 781006
2:THE ASSTT. COMMISSIONER OF STATE TAX
JORHAT I
ASSAM
JORHAT ENGINEERING COLLEGE ROAD
JORHAT
ASSAM 785001
3:THE COMMISSIONER OF STATE TAXES ASSAM
KAR BHAWAN
GANESHGURI
GUWAHATI 78100
Advocate for the Petitioner : MR ANKIT KANODIA, MS. N UPADHYAY,MR. P DAS
Advocate for the Respondent : SC, FINANCE AND TAXATION,

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BEFORE
HON’BLE THE CHIEF JUSTICE ASHUTOSH KUMAR
HON’BLE MR JUSTICE ARUN DEV CHOUDHURY

For the Appellant : Mr. Ankit Kanodia, Advocate.
Mr. Zeehan Islam, Advocate.

For the Respondents : Mr. B. Gogoi, Additional Advocate
General, Assam,

Mr. M. Bhuyan, Advocate.

Date on which Judgment is
Reserved : 13.08.2026

Date of pronouncement of
Judgment : 15.09.2026

Whether the pronouncement
is of the operative part of the
Judgment : NA.

Whether the full Judgment has
been pronounced : Yes.


JUDGMENT & ORDER (CAV)

(A.D.Choudhury, J)

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1. The present intra-court appeal is directed against the Judgment and
Order dated 12-02-2026 passed by a learned Single Judge in WP(C) No.
6666/2024, whereby the writ petition preferred by the appellant/ writ
petitioner challenging the show cause notice dated 29-11-2024 issued under
Section 73(1) of the Central Goods and Services Tax Act 2017 ( For short
the CGST, Act ) read with the corresponding provisions of Assam Goods
and Services Tax Act, 2017 ( For short, the AGST, Act ) came to be
dismissed.
2. The appellant/writ petitioner is a registered taxable person under the
CGST and AGST Acts and is engaged in the business of
wholesale/distribution of cellular phones.
3. The dispute relates to the financial year 2020-2021.
The respondent had furnished its annual return in Form GSTR-9 and the
reconciliation statement in Form GSTR-9C on 27.02.2022.Upon scrutiny of
the returns and other records, including GSTR-1, GSTR-2A, GSTR-3B, E-Way
bills, and other materials, the competent authority issued the impugned
show cause notice dated 29.11.2024 under Section 73(1) of the CGST/AGST
Act, proposing a total liability of Rs. 33,03,968/- besides interest and
penalty on the allegation inter alia of wrongful/excess availment of Input
Tax Credit (ITC) from canceled dealers, returned defaulters, and non-
taxpayers.
4. The principal challenge before the learned Single Judge was to the
competence of the authority to issue the notice on 29.11.2024, as it was
beyond the prescribed time limit under section 73(2), but not to the merits

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of the proposed demand.
5. The case of the appellant/writ petitioner is that Section 73(2) of the
CGST/AGST Act expressly mandates that the notice under Section 73(1) of
the CGST/AGST Act shall be issued “at least three months prior to the time
limit specified in Sub-section 10 of Section 73 of the CGST/AGST Act for
issuance of order”. It was contended that for the financial year 2020-2021,
the due date relevant for the purpose of Section 73(10) of the CGST/AGST
Act was 28.02.2022, and consequently, the period prescribed under Section
73(10) of the CGST/AGST Act for issuance of the order under Section 73(9)
expired on 28.02.2025.
6. According to the appellant/writ petitioner, three months prior to
28.02.2025 would be 28.11.2024, and therefore the notice issued on
29.11.2024 was beyond the period prescribed under Section 73(2) of the
CGST/AGST Act.
7. The revenue opposed the challenge and contended that the notice
dated 29.11.2024 was within time. According to the revenue, the date of
issuance of the notice is to be treated as the starting point, and after
excluding that date, three calendar months would expire on 28.02.2025. It
was accordingly contended that the notice dated 29.11.2024 was issued
within the period contemplated under Section 73(2) of the CGST/AGST Act.
8. The learned Single Judge first examined the statutory period prescribed
for issuing the order under Section 73(9) of the CGST/AGST Act.
The learned Single Judge noticed the extension of the due date for
furnishing the annual return for the financial year 2020-2021 and held that
the order contemplated under Section 73(9) of the CGST/AGST Act would

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be issued up to 28.02.2025.
9. The learned Single Judge thereafter examined the expression “three
months” occurring in Section 73(2) of the CGST/AGST Act. It was noticed
that the CGST/AGST Acts do not contain a specific definition of “month,”
and reference was therefore made to Section 3(35) of the General Clauses
Act, 1897, which defines " month" as " a month reckoned according to the
British calendar.”
10. The learned Single Judge then considered the decision of Dodds –Vs-
Waker, reported in (1981) 2 AII ER 609 , Bibi Salma Khatoon –Vs-
State of Bihar and others reported in (2001) 7 SCC 197 , and the
State of Himachal Pradesh v. Himachal Techno-Engineers and
another reported in (2010) 12 SCC 210 , amongst others, for the
proposition that a period expressed in months is to be recounted by the
reference to calendar months and cannot be treated as an equivalent
number of days.
11. The learned Single Judge also referred to Section 9 of the General
Clauses Act 1897 and the decision in Tarun Prasad Chatterjee v.
Dinanath Sharma reported in (2000) 8 SCC 649 and Saketh India
Ltd. And another -vs- India Securities Ltd., reported in (1999) 3 SCC
1 , for the principle that where a period is prescribed from a particular date,
the date from which the period commences is to be excluded.
12. Proceeding on that basis, the learned Single Judge treated the date of
issuance of the show cause notice as the starting point of the period in
question and, excluding that date, counted three calendar months
thereafter.

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Since the notice was dated 29.11.2024, the three months were taken to
comprise December 2024, January 2025, and February 2025, ending on
28.02.2025.
13. The learned Single Judge accordingly held that the notice dated
29.11.2024 could not be regarded as having been issued beyond the period
prescribed under Section 73(2), as, on excluding the date of issuance and
reckoning three calendar months thereafter, the period would expire on
28.02.2025.
14. During the pendency of the writ petition, an ex-parte order dated
28.02.2025, under Section 73(9) was determining the tax, penalty etc.
Accordingly, by an interim order dated 12.02.2025, the learned Single
Judge, directed the respondents not to take any coercive action against the
petitioner.
It is also brought to our notice that an amount of Rs. 10 Lakhs, has already
been recovered from the Appellant after the pronouncement of the
judgment by the learned Single Judge.
We shall deal with this aspect of the matter, which arose during the
pendency of the writ petition, at a later stage of this judgment.
15. We have heard Mr. A. Kanodia, learned counsel for the appellant, and
Mr. B. Gogoi, learned Additional Advocate General, appearing for the
Finance and Taxation Department, Government of Assam. The learned
counsel has reiterated before us the submissions advanced before the
learned Single Judge.
16. We have carefully considered the reasoning of the learned Single Judge.

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We have also considered the submissions advanced on behalf of the parties
and the authorities on which they relied.
17. There is no dispute, and we agree with the finding of the learned Single
Judge that 28.02.2022 is the relevant terminal date for examining the
requirement contained in section 73(2) of the CGST/AGST Act.
18. This date, 28.02.2022, in our opinion, is relevant for determining the
commencement of the 3 (three) year period under section 73(10) of the
CGST/AGST Act;
19. We also find no difficulty with the proposition expounded by the learned
Single Judge that a month “means a calendar month and not a period of 30
days”.
We also cannot have any disagreement with the settled principle that where
a statutory period is prescribed “from a specified date”, the date from which
the period commences is ordinarily excluded in terms of Section 9 of the
General Clauses Act.
20. However, a difficulty arises when that principle is applied to section
73(2) of the CGST/AGST Act, as argued by the Appellants.
21. Before proceeding further on it, and we consider it necessary to
reproduce, the provisions of Section 73(1), 73(2), 73(9), and 73(10) of the
CGST/AGST herein below:
Section 73. Determination of tax not paid or short
paid or erroneously refunded or input tax credit
wrongly availed or utilized for any reason other than
fraud or any willful misstatement or suppression of

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facts.-
(1) Where it appears to the proper officer that any tax has
not been paid or short paid or erroneously refunded, or
where input tax credit has been wrongly availed or utilised for
any reason, other than the reason of fraud or any wilful-
misstatement or suppression of facts to evade tax, he shall
serve notice on the person chargeable with tax which has not
been so paid or which has been so short paid or to whom the
refund has erroneously been made, or who has wrongly
availed or utilised input tax credit, requiring him to show
cause as to why he should not pay the amount specified in
the notice along with interest payable thereon under section
50 and a penalty leviable under the provisions of this Act or
the rules made thereunder.
(2) The proper officer shall issue the notice under
sub-section (1) at least three months prior to the time
limit specified in sub-section (10) for issuance of an
order.
(9) The proper officer shall, after considering the
representation, if any, made by the person chargeable with
tax, determine the amount of tax, interest and a penalty
equivalent to ten per cent. of tax or ten thousand rupees,
whichever is higher, due from such person and issue an order.
(10) The proper officer shall issue the order under
sub-section (9) within three years from the due date

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for furnishing of annual return for the financial year
to which the tax not paid or short paid or input tax
credit wrongly availed or utilised relates to or within
three years from the date of erroneous refund.
(11) Notwithstanding anything contained in sub-section (6) or
sub-section (8), penalty under sub-section (9) shall be
payable where any amount of self-assessed tax or any
amount collected as tax has not been paid within a period of
thirty days from the due date of payment of such tax.
22. Section 73 of the CGST/AGST Act constitutes a statutory mechanism for
determination of tax which has not been paid, or has been short paid, or
erroneously refunded, or where input tax credit has been wrongly availed or
utilized for reasons other than fraud, wilful misstatement, or suppression of
facts to evade tax.
23. The process commences when, upon requisite satisfaction, the proper
officer proceeds, under Sub-section 1, to serve notice upon the taxable
person requiring him to show cause as to why the amount specified in the
notice, together with interest and penalty, should not be paid.
Issuance of such a notice is, however, not the determination of liability. It is
the commencement of the statutory adjudicatory process.
It is true that Sub-section 2 places a specific restriction upon the exercise of
the power to issue such notice by requiring that the notice under Sub-
section 1 shall be issued “at least three months prior to” the time limit
specified in Sub-section 10 for issuance of an order.

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The subsequent provisions contemplate the opportunity available to the
person chargeable with tax to make payment in the circumstances provided
therein, submit a representation, and have it considered by the proper
officer, and ultimately determine the amount of tax, interest, and penalty
and issue an order under Sub-section 9.
Sub-section 10 prescribes the outer time limit of three years from the due
date of furnishing annual return for the year, for which tax has not been
paid, or has been short paid, or erroneously refunded, or where input tax
credit has been wrongly availed or utilised for reasons other than fraud,
wilful misstatement, or suppression of facts to evade tax, for culmination of
the adjudicatory process by issuing an the order contemplated under Sub-
section 9.
24. Thus, notice under Sub-section 1 of Section 73 of the CGST/AGST Act is
the commencement of a statutory adjudicatory process which culminates in
the determination and order contemplated under Sub-section 9 of Section
73 of the CGST/AGST Act, subject to the outer time limit prescribed under
Sub-section 10 of Section 73 of the CGST/AGST Act.
The scheme of Section 73 of the CGST/AGST Act establishes a statutory
relationship between the commencement of proceedings by issuance of a
notice under Section 73(1) and their culmination with the determination and
order under Section 73(9). Section 73(2) regulates the former by
prescribing an outer limit under Section 73(10).
25. Section 75 of the CGST/AGST Act supplements the aforesaid mechanism
contained in Section 73 by laying down General provisions governing the
determination. Therefore, for completeness, the relevant portion is

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reproduced:
Section 75. General provisions relating to the
determination of tax.-
(1) Where the service of notice or issuance of order is
stayed by an order of a court or Appellate Tribunal,
the period of such stay shall be excluded in
computing the period specified in sub-sections (2)
and (10) of Section 73 or sub-sections (2) and (10)
of Section 74 [or sub-sections (2) and (7) of section
74A], as the case may be.
(4) An opportunity of hearing shall be granted where a
request is received in writing from the person chargeable
with tax or penalty, or where any adverse decision is
contemplated against such person.
(5) The proper officer shall, if sufficient cause is shown by
the person chargeable with tax, grant time to the said
person and adjourn the hearing for reasons to be recorded
in writing:
Provided that no such adjournment shall be granted for
more than three times to a person during the proceedings.
(7) The amount of tax, interest and penalty demanded in the
order shall not be in excess of the amount specified in the
notice and no demand shall be confirmed on the grounds
other than those specified in the notice.
(10) The adjudication proceedings shall be deemed
to be concluded, if the order is not issued within the
period specified in sub-section (10) of section 73 or
in sub-section (10) of section 74 or in sub-section (7)
of section 74A.]

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26. Section 75(4) contemplates an opportunity of hearing in the
circumstances therein, while Section 75(5) permits adjournment of hearing,
upon sufficient cause being shown, subject to the limitation prescribed
therein.
Section 75(7) confines the final demand to the amount and grounds
specified in the notice.
27. These provisions demonstrate that the notice, the opportunity to contest
the proposed demand, the hearing, and the final determination constitute
parts of a single adjudicatory process with a legislatively prescribed terminal
point.
The aforesaid construction is further reinforced by Section 75(10) of the
CGST/AGST Act.
The said provision declares that the adjudication proceeding shall be
deemed concluded if the order is not issued within the period specified in
Section 73(10) of the CGST/AGST Act.
Thus, the date prescribed under Section 73(10) is not merely a time limit for
performance of the final act of issuing an order; it is the terminal point of
the adjudicatory proceeding initiated under Section 73 by issuing the notice.
28. Section 75(1) of the CGST/AGST Act is also relevant. It expressly
provides for the exclusion of the period of stay while computing the periods
prescribed under Section 73(2) and Section 73(10). The statutory scheme
thus recognizes the time prescription for the issuance of notice and for the
issuance of an order as connected parts of the same adjudicatory
framework.

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29. The principal question that arises for consideration is whether the
expression “at least three months prior to the time limit specified in sub-
section (10) for issuance of order” necessarily requires the corresponding
date falling exactly three calendar months before the terminal date to be
treated as the last permissible date for issuance of notice.
30. The requirement under section 73(2), therefore, is intended to ensure
that the initiation of proceedings is not so close to the statutory deadline
that the intervening adjudicatory process becomes illusory or unduly
curtailed.
31. Once the provision is understood in the aforesaid manner, the
determination required is whether, in the present case, the period between
the issuance of the notice dated 29-11-2024 and the expiry of the statutory
timeline on 28-2-2025 constitutes three calendar months.
In our considered opinion, it does.
32. It is not in dispute that the expression “month,” in the absence of
anything repugnant in the context, has to be understood in terms of section
3(35) of the General Clauses Act, namely, as a month reckoned according to
the British calendar. It is also well settled that where a period is to be
reckoned with reference to a particular date or event, the first day is
ordinarily excluded unless the statute expresses a contrary intention.
33. The learned Single Judge relied upon this well-recognized principle while
holding that the date of issuance of notice is to be excluded for determining
the period available thereafter.
34. In the present case, the notice was issued on 29-11-2024. Excluding

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that date, the period thereafter comprises the remainder of November and
the calendar months of December, January, and February, culminating on
28-02-2025.
More importantly, from the standpoint of the statutory requirement, the
taxable person had the full intervening calendar months of December,
January, and February available before the expiry of the period prescribed
under section 73(10) for issuance of the order under section 73(9).
35. The submission of the appellant proceeds on the basis that if the
corresponding date principle is applied backward from 28-02-2025, the date
obtained would be 28-11-2024 and consequently, a notice issued on 29-11-
2024 must necessarily be treated as one day beyond limitation.
Such construction, in our opinion, introduces into section 73(2) a degree of
rigidity which the provision itself does not expressly contain.
36. The corresponding date principle may be useful in determining a period
expressed in months. However, it cannot be applied mechanically without
having regard to the statutory context in which expression occurs.
Section 73(2) does not prescribe an independent period of limitation
expiring on a corresponding date. It prescribes the minimum interval that
must be available between the initiation of the proceeding and the outer
limit fixed for its culmination.
Therefore, the requirement is satisfied if three calendar months are
available after excluding the day on which the notice is issued and before
the statutory terminal date.
37. The use of the expression “at least” also does not advance the case of

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the appellant further.
The expression undoubtedly signifies that the minimum statutory period
cannot be reduced.
However, the question remains as to how the three-month period is to be
computed. If, in accordance with the established principle of exclusion of
the first day, the date of issuance of notice is left out of computation, the
requisite period is not curtailed in the present case. On the contrary, the
statutory period contemplated under Section 73(2) remains available.
38. The construction suggested by the appellant would mean that although
a notice issued on 29-11-2024 leaves the whole of December, January and
February before the expiry of the terminal date, it would nevertheless be
invalid merely because it was issued on a day after 28-11-2024.
39. Therefore, in our opinion, such a consequence does not necessarily
follow from the language employed by the legislation.
Section 73(2) has to be construed as a provision regulating the interval
between the initiation under Section 73(1) and the culmination of the
statutory adjudicatory process within the period prescribed under Section
73(10) and cannot be construed fixing an artificial corresponding date as an
independent cut-off for issuance of notice.
The provision does not say that corresponding date arrived at by counting
backward is to be excluded. If that would have been the intention of the
legislature, the legislature could have employed language clearly fixing such
a date.
40. We are therefore of the considered opinion that the learned single judge

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was justified in holding that the notice dated 29-11-2024 was not beyond
the period contemplated under Section 73(2).
The learned Single Judge correctly found that terminal date for issuance of
the order was 28-02-2025 and that the expression “three months” refers to
calendar months. On excluding the date of issuance of notice, the statutory
requirement of a minimum period of three months before expiry of the time
limit under Section 73(10) stood satisfied.
41. We have also considered the decision referred to by the parties.
42. The decision that proceeds upon the corresponding date principle
undoubtedly provides one possible method of computation.
But where another construction consistent with the rule of exclusion of the
first date and with the statutory object of ensuring a minimum adjudicatory
interval is reasonably possible, the view adopted by the learned Single
Judge cannot be said to suffer from any legal infirmity or perversity
warranting interference in an intra-court appeal.
43. We accordingly find no reason to interfere with the judgment and order
dated 12.02.2026, passed by the learned Single Judge in WP(C)
No.6666/2024. Consequently, the Writ Appeal is dismissed.
44. However, taking note of the interim order dated 12.02.2025 passed by
the learned Single Judge and that during pendency of the writ petition, the
proceeding culminated, we are of the opinion that ends of justice would be
met, if an opportunity to the Appellant to contest the impugned notice
dated 29.11.2024, is given in terms of section 73 and 75 of the AGST Act.
45. Accordingly, we interfere with the order dated 28.02.2025 passed under

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Section 73(9) of the AGST Act., to enable the appellant to avail his right to
contest the Notice dated 29.11.2024. The appellant shall, if so desired may
file his reply to the notice dated 29.11.2024 within a period of four weeks
from today. In the event such a reply is filed, the entire proceeding shall be
completed within a period of three months thereafter. However, if no such
reply is filed within the time specified hereinabove, the order dated
28.02.2025 shall revive and the Revenue authority shall proceed in
accordance with AGST/CGST Act.
46. While parting with the record, we make it clear that any observation
that is made in the present judgment shall not be construed as any
comment on the merit of the demand or the defence of the appellant.
47. The interim order, if any, shall stand vacated. Parties shall bear their
own costs.


JUDGE CHIEF JUSTICE
Comparing Assistant