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2025 (4) TMI 1507 - HC - GSTPeriod of limitation for issue of Show cause notice u/s 73 - Challenge to N/N. 56/2023- Central Tax issued by the first respondent on 28.12.2023 G.O.(Ms)No.1 of the Commercial Taxes and Registration (B1) Department and the assessment order passed by the fifth respondent - Violation of principles of natural justice - HELD THAT - Upon considering the submissions made by the learned counsel for the petitioner and the learned Government Advocate for the respondents 3 to 5 and having regard to the materials on record this Court is of the view that the impugned notifications issued under Notification No.56/2023-Central Tax dated 28.12.2023 and G.O.(Ms)No.1 dated 02.01.2024 as well as the assessment order dated 26.04.2024 are valid and issued in accordance with the provisions of the CGST Act TNGST Act and the constitutional framework. This Court finds that the exercise of powers under Section 168A of the CGST Act and Section 168A of the TNGST Act was done appropriately with due consideration of the exceptional circumstances. Furthermore the respondents have acted within their jurisdiction and have not violated the principles of natural justice or the petitioner s fundamental rights under Articles 14 and 19(1)(g) of the Constitution of India. The writ petition is hereby dismissed.
Issues Presented and Considered
The core legal questions considered by the Court include:
Issue-wise Detailed Analysis 1. Validity and Jurisdiction of Notifications under Section 168A of the CGST Act and TNGST Act The legal framework governing this issue is Section 168A of the Central Goods and Services Tax Act, which empowers the Government to extend time limits for issuance of orders under Section 73, particularly in extraordinary circumstances such as force majeure events. Similarly, Section 168A of the Tamil Nadu Goods and Services Tax Act, 2017, provides analogous powers at the state level. Precedents and legislative intent indicate that such extensions are extraordinary measures aimed at mitigating hardship caused by unforeseen events, notably the COVID-19 pandemic, which disrupted normal compliance timelines. The petitioner contended that the impugned notifications were arbitrary, excessive, and issued without jurisdiction. The petitioner argued that the pandemic-related disruptions had largely abated, and the extensions failed to consider the post-pandemic recovery period and prior extensions already granted, thus violating Articles 14 (right to equality) and 19(1)(g) (right to carry on any occupation, trade or business) of the Constitution. The respondents, represented by the Government Advocate, submitted that the notifications were issued in accordance with the powers conferred under Section 168A of both Acts, following the recommendations of the GST Council. They emphasized that the extensions were necessary to ensure taxpayers had sufficient time to comply with statutory obligations, considering ongoing challenges. The Court examined the text of the G.O.(Ms)No.1 dated 02.01.2024, which explicitly extended the time limit for completing assessments under Section 73 of the TNGST Act for the financial years 2018-19 and 2019-20, with retrospective effect from 28.12.2023. The Court noted that the notifications were issued after due consideration of prevailing circumstances and were consistent with prior extensions issued since 2020. The Court found that the exercise of powers under Section 168A was within jurisdiction, rational, and not arbitrary. The legislative purpose of facilitating compliance during force majeure events was upheld, and the notifications did not infringe constitutional rights unjustifiably. 2. Validity of the Assessment Order dated 26.04.2024 The assessment order was challenged on grounds that it was passed without a detailed enquiry and without verifying crucial documents such as GSTR-1 returns, auto-populated GSTR-2A, offset summaries, and GSTR-9 for the relevant financial year, thus violating principles of natural justice. The legal framework comprises the procedural requirements under Sections 73 and related provisions of the CGST Act and TNGST Act, which mandate proper enquiry and verification before issuing assessment orders. The petitioner argued that failure to verify these documents rendered the assessment order invalid and arbitrary. The respondents contended that the assessment was conducted based on available records and complied with statutory requirements. They submitted that while certain documents were not specifically verified, the statutory mandate was fulfilled, and the order was valid. The Court analyzed the submissions and materials on record, concluding that the assessment order was passed after due consideration of relevant facts and procedural compliance. The Court held that the absence of verification of specific documents did not vitiate the order, as the statutory requirements were met and principles of natural justice were not violated. 3. Constitutional Validity and Fundamental Rights The petitioner asserted that the impugned notifications and assessment order violated Articles 14 and 19(1)(g) of the Constitution by imposing unjustified restrictions on the right to equality and the right to carry on any occupation, trade, or business. The Court considered the constitutional framework and the scope of these fundamental rights. It observed that reasonable restrictions are permissible under the Constitution, particularly when enacted under valid statutory provisions and for legitimate public purposes. The Court found that the notifications and assessment order were issued within the ambit of statutory powers and aimed at ensuring compliance and proper tax administration. The extensions and assessments were not arbitrary but based on rational considerations of extraordinary circumstances. Consequently, the Court held that there was no violation of Articles 14 and 19(1)(g). Significant Holdings The Court held verbatim:
The Court established the core principles that extensions under Section 168A are extraordinary powers to be exercised considering force majeure events and that such extensions, when rational and duly promulgated, do not violate constitutional rights. Further, assessment orders passed in compliance with statutory procedures, even if certain documents are not individually verified, are not invalid unless there is a clear breach of natural justice. On each issue, the Court concluded that the notifications and assessment order were valid, not arbitrary, and consistent with the legislative and constitutional framework, leading to dismissal of the writ petition for lack of merit.
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