Is MCA circular extending time for DPT-4 filing beyond vires?
Section 74 lays down the time limit within which the company having deposits on the commencement of CA 2013 has to file a statement in DPT – 4. MCA, on the basis of reference received from various quarters, extended time for filing by 2 months i.e. up to 31.08.2014. The extension of time has been granted by way of a general circular no. 27/2014.
We are learning new ways of governance and legislation through circulars. Ministry of Corporate Affairs is changing the laws through circulars. The time limit for filing DPT-4 is specified in the Act and the Executive machinery (read MCA) has no power to amend, alter, reduce or enhance the time limit. This a classic example of stepping on the domain of Legislature.
The circular is per se bad in law. On practical side, since it is a beneficial circular, unless challenged, it will be deemed as good. Challenge or no challenge, MCA should refrain from issuing circulars for which it has no power.
Another aspect which has been overlooked is that Section 74(1)(a) allows time limits under two different situations. It mandates filing of statement within a period of three months from such commencement or from the date on which such payments are due.
This means the time limit of 3 months from commencement of CA 2013 is not sacrosanct. It could be 3 months from the due date. To explain, if the due date is 30th April, then DPT-4 is to be filed on or before 31st July. The MCA’s circular categorically states that time for filing DPT-4 is expiring on 30th June, 2014. It has failed to take into account the alternative limit.
MCA, by issuing such circulars, is compounding confusion. Law making through circulars is a new trend. This trend needs to be halted as MCA should realise that buck stops at them.
© Ashish Makhija: firstname.lastname@example.org
Disclaimer: The views expressed here are views based on my personal interpretation and should not be deemed as legal or professional advise on the subject. If relied upon, the author does not take any responsibility for any liability or non-compliance.