2024 (5) TMI 1429 - HC - GST

Extension of time limit for GST assessment u/s 73 - Challenge to N/N. 09/2023 Central Tax and N/N. 56/2023-Central Tax and section 73 of the CGST/AGST Act, 2017 - Extension of time limit - force majeure - situation of COVID-19 pandemic in existence or not - recovery of ineligible ITC - HELD THAT - In the Explanation to Section 168A of the CGST Act, 2017, the expression force majeure means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of the Act. It is noticed that the time limit under sub-section 10 of Section 73 of the CGCT Act was extended once prior to the Notification dated 31.03.2023. The Hon ble Allahabad High Court, the Hon ble Gujarat High Court, the Hon ble Punjab Haryana High Court, the Hon ble Madras High Court and this Court have provided interim reliefs to the noticees/assessees by inter alia observing that the proceedings in pursuance of the impugned Show Cause Notice may proceed but no final order shall be passed and if final order is passed already, no recovery is to be effected. The said interim orders are stated to be in operation till date. This Court is inclined to provide that till further orders of this Court, the recovery of the amount assessed against the petitioner by the Order-in-Original shall not be enforced - petition disposed off.

Summary

Issues: Challenge to notifications and order under CGST Act, 2017; Extension of time limit for recovery of tax; Contention regarding COVID-19 pandemic factor; Interim protection granted by various High Courts; Interpretation of 'force majeure' under CGST Act, 2017; Enforcement of recovery of assessed amount.

Analysis:
1. The writ petition challenges Notification no. 09/2023, Notification no. 56/2023-Central Tax, and an Order-in-Original dated 26.04.2024 under Section 73 of the CGST Act, 2017. The notifications extended the time limit for issuing recovery orders related to tax not paid or short paid. The petitioner contests the basis of these extensions and the subsequent order for recovery of Ineligible Input Tax Credit.

2. The petitioner argues that the COVID-19 pandemic was no longer existent post-2022, citing a Supreme Court order limiting the period of limitation till 28.02.2022. The petitioner questions the necessity for the GST Council to consider the pandemic for extending the time limit under Section 73(10) of the CGST Act, 2017.

3. The petitioner highlights that various High Courts, including Allahabad, Gujarat, Punjab & Haryana, and Madras, have granted interim protection to similarly situated parties. The interim orders prevent the enforcement of final orders or recovery until further directions.

4. The Standing Counsel for CGST refers to a Supreme Court case, Naresh Chandra Agarwal vs. Institute of Chartered Accountants of India, emphasizing the Court's approach to challenges against rules made under governing statutes.

5. The interpretation of 'force majeure' under the CGST Act, 2017 includes events like war, epidemic, or calamities affecting statutory provisions' implementation. The Court notes that the time limit under Section 73(10) was previously extended before the challenged notifications.

6. Considering the interim reliefs granted by various High Courts and the existence of similar issues under examination, the Court decides to stay the enforcement of the recovery amount assessed in the Order-in-Original until further orders.