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2025 (4) TMI 1168 - HC - GSTSeeking certain amendments as per the draft amendment tendered to the Court - Challenge to N/N. 56/2023-Central Tax dated 28th December 2023 issued by Respondent No. 1 (Union of India) and N/N. 56/2023 dated 16th January 2024 issued by Respondent No. 2 (State of Maharashtra) exercising powers under Section 168A of the Central Goods and Services Tax Act 2017 (CGST Act) - HELD THAT - It is found that in similar matters in EVIE REAL ESTATE PRIVATE LTD. VERSUS STATE OF MAHARASHTRA 2025 (3) TMI 173 - BOMBAY HIGH COURT the petitions have been admitted and interim relief has been granted. We therefore issue Rule. Respondent Nos. 1 to 4 waive service. Liberty granted to the parties to apply in the event the matter before the Hon ble Supreme Court is disposed of one way or the other.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of Notifications under Section 168A of the CGST Act Relevant legal framework and precedents: Section 168A of the CGST Act empowers the Central Government and State Governments to extend the time limits specified under the Act by issuing Notifications. However, the statute mandates that such extensions must be issued on the recommendation of the GST Council, which is a constitutional body established under Article 279A of the Constitution of India, to ensure uniformity and coordination in GST administration. Precedents include prior decisions where the Court emphasized strict compliance with procedural requirements for issuing Notifications that affect substantive rights and timelines. Court's interpretation and reasoning: The Court examined the sequence of Notifications issued. It was undisputed that the initial Notifications No. 9/2023-Central Tax dated 31st March 2023 and No. 9/2023-State Tax dated 24th May 2023 were issued on the GST Council's recommendation and were valid. However, the subsequent Notifications No. 56/2023-Central Tax dated 28th December 2023 and No. 56/2023-State Tax dated 16th January 2024, which purportedly extended the time limits further, were not issued following the GST Council's recommendation. Key evidence and findings: The petitioner presented that the impugned Notifications lacked the GST Council's recommendation, a mandatory procedural step. The respondents did not dispute this non-compliance. Application of law to facts: Since the Notifications extending the time limits were required by statute to be issued on the GST Council's recommendation, the failure to do so rendered the Notifications ultra vires and illegal. The Court found that non-compliance with this procedural mandate invalidated the Notifications. Treatment of competing arguments: The respondents argued that the Notifications were valid extensions; however, the Court held that the statutory requirement for the GST Council's recommendation was mandatory and not directory. The absence of such recommendation could not be overlooked. Conclusion: The Notifications dated 28th December 2023 and 16th January 2024 are illegal and ultra vires for non-compliance with Section 168A's requirement of GST Council recommendation. Issue 2: Validity of the impugned Order dated 12th August 2024 under Section 73(9) of the MGST Act Relevant legal framework and precedents: Section 73(9) of the MGST Act deals with the issuance of orders for recovery of tax not paid or short paid. Such orders must be passed within the time limits prescribed under the CGST Act or its extensions. Court's interpretation and reasoning: The impugned Order dated 12th August 2024 was passed beyond the time limits prescribed by the Notifications dated 31st March 2023 and 24th May 2023, which were the last valid Notifications extending the time limits. Since the subsequent Notifications extending the time limits were invalid, the impugned Order was passed beyond the permissible period. Key evidence and findings: The petitioner demonstrated that the impugned Order was issued after the expiry of the valid extended period and relied on the invalid Notifications for further extension. Application of law to facts: The Court applied the principle that any order passed beyond the statutory time limit is void. Since the impugned Order relied on invalid Notifications for time extension, it was not sustainable. Treatment of competing arguments: The respondents contended that the impugned Order was valid as per the latest Notifications. The Court rejected this, holding that reliance on invalid Notifications could not validate the order. Conclusion: The impugned Order dated 12th August 2024 is liable to be quashed as it is passed beyond the valid extended time limits. Issue 3: Grant of interim relief staying the operation of the impugned Order Relevant legal framework and precedents: The Court's power to grant interim relief under writ jurisdiction includes staying the operation of orders that are challenged for being illegal or ultra vires, especially where the petitioner demonstrates prima facie case and irreparable injury. Court's interpretation and reasoning: The Court found that the petitioner established a prima facie case regarding the illegality of the Notifications and the impugned Order. The balance of convenience favored the petitioner as the impugned Order involved recovery of tax beyond the valid time frame. Key evidence and findings: The petitioner's challenge to the validity of the Notifications and consequent invalidity of the impugned Order was supported by documentary evidence and statutory interpretation. Application of law to facts: The Court granted interim relief in terms of prayer clause (h), staying the operation of the impugned Order pending final disposal
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