2024 (8) TMI 768 - HC - GST

Challenge to N/N. 56/2023 dated 28.12.2023 issued by the respondent No.2 - ultra vires to the provisions of Section 168A of the CGST Act of 2017 or not - Extension of limitation under the provisions of Section 168(A) of the Central Goods and Service Tax Act, 2017 - HELD THAT - This Court having given an anxious consideration of the matter is of the opinion that the matter as to whether there was a force majeure and what were the circumstances, under which the provisions of Section 168A was invoked would require a determination and the same can be done on the basis of an affidavit to be filed by the respondent authorities. Be that as it may, a perusal of the materials on record prima facie show that there was no recommendation made by the GST Council before issuance of the Notification No. 56/2023 dated 28.12.2023. Under such circumstances, it is the opinion of this Court that if the Notification No. 56/2023 cannot stand the scrutiny of law, all subsequent action(s) taken on the basis thereof also cannot be sustainable. This Court till the next returnable date, directs the respondent authorities not to take any coercive action against the petitioner in respect to the notice dated 08.05.2024. It is, also made clear that during the subsistence of the instant order, the respondent authorities can pass the order under Section 73 (9) of the CGST Act of 2017. However, no coercive actions be taken on such order, till the next date. List again on 21.08.2024.

Summary

Issues:
Challenge to Notification No. 56/2023 dated 28.12.2023 under Section 168A of the CGST Act of 2017
Validity of notice under DRC-01 dated 08.05.2024 issued by respondent No.4 under Section 73 of the CGST Act of 2017

Analysis:
The petitioners challenged Notification No. 56/2023 dated 28.12.2023, which extended the limitation under Section 168A of the CGST Act of 2017 and the notice under DRC-01 dated 08.05.2024 issued by respondent No.4. The petitioners argued that the notification was ultra vires as it was issued without the mandatory recommendation from the GST Council and without the existence of force majeure circumstances. The petitioners contended that the extension was sought due to inadequate staff, which does not qualify as force majeure as per Section 168A. Additionally, the petitioners pointed out that the notice issued on 08.05.2024 did not comply with the three-month prior issuance requirement under Section 73(2) of the CGST Act of 2017.

The court considered the arguments and noted that the absence of a recommendation from the GST Council before issuing Notification No. 56/2023 raised doubts about its legality. The court opined that if the notification itself was invalid, any actions taken based on it would also be unsustainable. Therefore, the court directed the respondent authorities not to take coercive action against the petitioner regarding the notice dated 08.05.2024 until the next returnable date. The court allowed the respondent authorities to pass an order under Section 73(9) of the CGST Act of 2017 during this period but prohibited any coercive actions based on that order.

In conclusion, the court scheduled the next hearing for 21.08.2024 and instructed the registry to include the name of Mr. B Choudhury, the standing counsel for the Finance and Taxation Department, and the counsel for the State GST in the cause-list.