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TMI Blog2024 (12) TMI 440X X X X Extracts X X X X X X X X Extracts X X X X ..... d, M/s. Classic Services, M/s Mother India Construction Pvt. Ltd. M/s. Manas., M/s. Chaurasia Enterprises, Versus The State of Bihar, The Principal Secretary Cum Commissioner, Department of State Taxes, Government of Bihar, Patna., Assistant Commissioner of State Tax, The Union of India, The Secretary, Department of Revenue, Govt. of India, New Delhi., The Principal Commissioner of Central Goods and Service Tax, New Delhi., The Commissioner of Central Tax Patna, The Joint Commissioner of State Tax, Patna, The Assistant Commissioner of State Tax, Patna, Appearance : (In Civil Writ Jurisdiction Case No. 4180 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate For the Respondent/s : Mr. Standing Counsel 11 Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate (In Civil Writ Jurisdiction Case No. 4505 of 2024) For the Petitioner/s : Dr. Alok Kumar Sinha, Advocate Mrs. Raj Rashmi Sinha, Advocate Mr. Raja Prasad, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 6211 of 2024) For the Petitioner/s : Mr. Sadashiv Tiwari, Advocate. For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 6533 of 2024) For the Petitioner/s : Mr. D.V. Pathy, Advocate Mr. Sadashiv Tiwari, Advocate Ms. Prachi Pallavi, Advocate Mr. Hiresh Karan, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 6831 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate Mr. Manish Kumar, Advocate For the Respondent/s : Mr. Vikash Kumar, SC 11 Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate. Mr. Shivadity D. Sinha, Advocate (In Civil Writ Jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction Case No. 9108 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate Mr. Manish Kumar, Advocate Mr. Rajeev Nayan, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. G.P.-7. (In Civil Writ Jurisdiction Case No. 9218 of 2024) For the Petitioner/s : Dr. Alok Kumar Sinha, Advocate Mrs. Raj Rashmi Sinha, Advocate Mr. Raja Prasad, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 9453 of 2024) For the Petitioner/s : Mr.Brisketu Sharan Pandey, Advocate Mr. Abhishek Kumar, Advocate Mr. Madan Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 9527 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate Mr. Manish Kumar, Advocate Mr. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it Jurisdiction Case No. 11510 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate Mr. Manish Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 11511 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate Mr. Manish Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. Vikash Kumar, SC 11 (In Civil Writ Jurisdiction Case No. 11662 of 2024) For the Petitioner/s : Mr. Bijay Kumar Gupta, Advocate Mr. Manish Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh Shankar Singh, Advocate Mr. Shivadity D. Sinha, Advocate Mr. G.P. 7 (In Civil Writ Jurisdiction Case No. 11828 of 2024) For the Petitioner/s : Mr.Shive Kumar, Advocate For the Respondent/s : Dr. K. N. Singh, Additional Solicitor General Mr. Anshuman Singh, Sr. SC, CGST&CX Mr. Devansh S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t circumstance, there could not have been any extension of limitation. 2. The different petitioners in the writ petitions have raised multiple grounds for challenging the orders passed; primarily on limitation; then on the grounds of a notice having not been issued under Section 61 of the GST Act read with Rule-99, as also violation of the principles of natural justice; which allegation is levelled for reason of no personal hearing having been afforded as mandated under Section 75 (4). We would first deal with the common ground in all the writ petitions with respect to limitation; which as available in the GST Act stood extended based on the pandemic situation. 3. We have heard Sri. D.V. Pathy, Dr. Avinash Poddar, Sri. Bijoy Kumar Gupta and Sri. Aman Raza, learned Counsel appearing for the writ petitioners, Sri. P.K. Shahi, learned Advocate General for the State and Dr. K.N. Singh, learned Additional Solicitor General for the Union of India. 4. Section 44 of the GST Act provides for filing of annual returns, which as per sub-section (1) has to be filed for every financial year, electronically, in such form and manner as may be prescribed, on or before 31st day of December follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the end of the year 2019 and the situation escalated over the next few months and in India, a complete lock down was declared on 25.03.2020. The complete nation-wide lock down though lasted only till 31st May-2020, the situation continued to be grim; seriously affecting and jeopardizing every human activity, not only in India but all over the world. Life came to a stand-still and the statutory compliances were seriously hampered and the statutory proceedings and processes stood suspended for multifarious reasons; of affliction with COVID-19 pandemic, limited lock down of local areas, restricted attendance and reduced foot-falls in government offices and so on and so forth. 7. The Hon'ble Supreme Court rose up to the occasion and Suo motu Writ Petition No. (Civil) No. 3 of 2023 was registered, as Re: Cognizance for Extension of Limitation. The limitation under the various enactments were suspended thus giving relief to the individuals, assessees, establishments, institutions etc., who were obliged to make statutory compliances. Eventually, the Hon'ble Supreme Court by order dated 01.01.2022 disposed of the suo motu writ petition with directions, inter alia providing for exclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntral Tax and 31.12.2020 by Notification No. 80/2020-Central Tax. By Notification No. 95 of 2020-Central Tax dated 30.12.2020, the due date for filing of annual returns under Section 44 (1) of the GST Act for the year 2019-20 was also extended upto 28.02.2021. This again stood extended by Notification No. 4/2021-Central Tax to 31.03.2021. The due dates for filing annual returns in all the three subject years, stood extended to the dates mentioned above. The GST regime, as was the case in the VAT regime, had a system of self-assessment [Section 73(5)] and hence no proceeding for determination of tax, short paid, escaped, erroneously refunded or input tax wrongfully claimed for the assessment year, could be initiated before the due date of filing annual returns. 10. The aforesaid extension was to mitigate the difficulties of the assesses; expressed by the assesses, due to the insistence for online filing of returns and the difficulties in implementation of the new regime, under the GST Act which had commenced on 01.07.2017. The due date for filing of returns under Section 44 of the GST Act, thus stood extended for the year 2017-18, 2018-19 and 2019-20 to 07.02.2020 (in the State of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o give retrospective effect to such notification from a date not earlier than the date of commencement of this Act." 13. The said provision was introduced invoking the power conferred on the Parliament and the Legislature of every State under Article 246A of the Constitution of India. Immediately, we notice that Section 168A is thus framed in contradistinction to the power of recommendation conferred under Article 279A (4) on the Goods and Services Tax Council constituted under Article 279A of the Constitution of India. 14. The first Notification to be issued under Section 168A of the GST Act, 2017 was Notification No. 35/2020, issued by the Central Board of Indirect Taxes & Customs (CBIC) dated 03.04.2020. It provided inter alia extension of time up to 31.08.2020 with respect to actions for which the time limit for completion or compliance by any authority fell during the period 20.03.2020 to 30.08.2020; which Notification is produced as Annexure-P/7 in CWJC No. 6195 of 2024. Subsequently; Annexure-P/8 produced in the same writ petition, is Notification No. 55/2020 dated 27.06.2020 issued, whereby the period ending on 29.06.2020, as specified in Notification No. 35/2020 was subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the very same period was excluded by the Hon'ble Supreme Court in computing the limitation period under general or special laws, in respect of all judicial or quasi-judicial proceedings. The difference was very negligible, insofar as the Hon'ble Supreme Court having excluded the period between 15.03.2020 to 28.02.2022; 14 days lesser than that ordered by the Government. It is common knowledge that the pandemic situation had commenced earlier and only on it escalating beyond control that the lock-down was imposed on 25.03.2020. The petitioners do not challenge the extension made for filing refund applications but only challenge the limitation period for passing orders having been extended. 18. The decision so arrived at, extending limitation was also not without application of mind. The notification was issued in pursuance to the decision taken by the GST Council at the 47th meeting held on 28-29 of June, 2022; which is produced as Annexure-P/12 in CWJC No. 6195 of 2024. We extract Agenda at item no. 3(xiv) which reads as under: - "Agenda Item 3 (xiv): Note for extension of limitation under Section 168A of the CGST Act, 2017 7.53 The Principal Commissioner, GST Policy Wing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST Act. The Council agreed with the recommendations of the Law Committee along with the proposed draft notification under Section 168A of CGST Act, subject to the vetting by the Law Ministry." (underlining by us for emphasis) 19. The notification also came into force w.e.f. 01.03.2020, retrospectively, as enabled under sub-section (2) of Section 168A of the GST Act. Hence, the force majeure situation which was reckoned by the GST Council, in making recommendations to the Government, was the COVID-19 pandemic which though had commenced in 2019, intensified by 01.03.2020; 24 days after which, a country-wide lock down was enforced in India. Notification No. 13 of 2020 though issued on 05.07.2022 had a retrospective effect from 01.03.2020; when the pandemic struck with all force, resulting in suspension of every human endeavour including mobility, disrupting all human activities, which weighed on the GST Council and the Government on 05.07.2022, while extending the limitation period for passing orders under Section 73 (10) of the GST Act. The compelling circumstance was the pandemic period having disabled the officers from statutorily proceeding against the defaulters, which defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be a need to provide additional time to the officers to issue notices and pass orders for FY 2017-18, 2018-19 and 2019-20 considering the delay in scrutiny, assessment and audit work due to COVID-19 restrictions, however, the same need to be made in a manner such that there is no bunching of last dates for these financial years as well as for the subsequent financial years. After detailed deliberations, Law Committee recommended that such time limits may be extended for another three months each for the FY 2017-18, 2018-19 and 2019-20. It was discussed in detail in officers meeting where one view was that extension for FY 2017-18 had already been given and further extension may create a perception that it is not a tax friendly measure and against the interest of taxpayers. 5.7.1 The Secretary stated that the Law Committee has recommended the extension of time limit for issuance of SCN and orders. However, the time period for issuance of notices and passing orders for these financial years has already been extended considerably due to extension in due dates of filing annual returns for the said financial years. Further, for FY 2017-18, the date of passing order has already been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in WP(C) No. 3585 of 2024, titled M/s. Barkataki Print and Media Services & Anr. V. Union of India & Ors. and analogous cases dated 19.09.2024, produced as Anenxure-P/7 in CWJC No. 4180 of 2024. The judgment of the learned Single Judge of the High Court was not put forth as a binding precedent, but only for purpose of reference to the admission of the Central Government, that Notification No. 56/2023 was not issued pursuant to a recommendation by the GST Council. The learned Single Judge of the High Court relied on Union of India & Anr. v. Mohit Minerals Private Limied, (2022) 10 SCC 700 to find that the object behind the insertion of Articles 246A and 279A read with the overriding provisions in Article 254 was to promote fiscal federalism and co-operative federalism, in which circumstance, the recommendation made by the GST Council when required, as per the provisions of the Central Act or the State Act, has to be construed to be a sine qua non for exercise of power by the Union or the State Government. It was found from an analysis of the findings in the judgment of the Hon'ble Supreme Court that though some recommendations of the GST Council would not be binding on the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26. We also extract the conclusions arrived at by the Hon'ble Supreme Court, relevant for the subject matter in these cases, as below:- E. Conclusion 171. Based on the above discussion, we have reached the following conclusion: 171.1. The recommendations of the GST Council are not binding on the Union and States for the following reasons: 171.1.1. The deletion of Article 279-B and the inclusion of Article 279(1) by the Constitution Amendment Act, 2016 indicates that Parliament intended for the recommendations of the GST Council to only have a persuasive value, particularly when interpreted along with the objective of the GST regime to foster cooperative federalism and harmony between the constituent units. 171.1.2. Neither does Article 279-A begin with a non-obstante clause nor does Article 246-A state that it is subject to the provisions of Article 279-A. Parliament and the State Legislatures possess simultaneous power to legislate on GST. Article 246-A does not envisage a repugnancy provision to resolve the inconsistencies between the Central and the State laws on GST. The "recommendations" of the GST Council are the product of a collaborative dialogue involving the Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government and the decisions of the GST Implementation Committee. At the 52nd meeting, Notification No. 56/2023-Central Tax seeking to extend dates of specified compliances in exercise of powers under Section 168A of the GST Act has been ratified. It is also to be emphasized that Notification No. 56/2023-Central Tax specifically modifies the earlier notifications issued; starting from Notifications 35/2020-Central Tax, to 14/2021, 13/2022 and 9 of 2023. With due respect, we are unable to agree with the reasoning in the judgment of the learned Single Judge of the Gawhati High Court, which led to setting aside of Notification No. 56 of 2023. 30. We also refer to the three circulars produced by the State, which are the analogous certificates issued by the State under the BGST Act. Contemporaneous to Circular No. 13/2022-Central Tax dated 05.07.2022, the State has issued S.O. 174 dated 29.08.2022, produced as Annexure-R-3/5 along with supplementary counter affidavit dated 26.10.2024 in CWJC No. 4180 of 2024. Likewise, contemporaneous to Notification No. 9/2023-Central Tax dated 31.03.2023, the State has issued S.O. 134 dated 17.05.2023 extending the limitation period for the financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation. Hence the period of 1 year, 11 months and 16 days have to be excluded for the year 2017-18, which would take the limitation period to 21.01.2025. 34. Similarly, in the financial year 2018-19, the period between 01.01.2021 and 28.02.2022 should be excluded from the three-year period commencing from the extended date of filing amended returns for that year; i.e: between 31.03.2020 to 31.12.2023. The 01 year 02 months so excluded would extend the limitation from 31.12.2023 to 28.02.2025, for the assessment year 2018-19. Likewise, for the financial year 2019-20 the extended due date of filing of return falls on 31.03.2021 and the limitation under Section 73 (10) of the GST Act extends upto 31.03.2024. The period excluded for reason of the Covid-19 pandemic, coming within the period of limitation, hence would be 11 months which would enable extension of limitation under Section 73 (10) of the GST Act from 31.03.2024 to 28.02.2025. The extended dates as per the notifications fall within the period of limitation; when the exclusion enabled by the Hon'ble Supreme Court; between 15.03.2020 and 28.02.2022 is applied. 35. For the assessment year 2017-18, the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of existence of circumstances for exercise of the said power described as conditional legislation, stood fulfilled. Therefore, the ratio of the decision of the Supreme Court in Mohit Minerals Private Limited (supra) is also of no avail. By way of principle it may not be doubted that the recommendations of the Council remained persuasive. The Central Government and the State Government were not duty bound to conform thereto. However, in absence of any fact shown to exist, the Central Government and the State Government have exercised their conditional legislative function in accordance with law. No palpable illegality or arbitrariness has been shown to exist as may warrant any deeper examination by the Court. 111. Next, we have to examine, if that consideration was enough and if it satisfied any further test laid down in Section 168A of the Central Act and the State Act. Here, we are unable to accept the submission advanced by learned counsel for the petitioner that there were mere difficulties faced by the revenue authorities in conducting scrutiny and audit. The period 15.03.2020 to 28.02.2022 remains the darkest period of our recent past, arising after the second World War. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, was commonly known to all, itself is irrebuttable evidence of both the extent of disablement and the length of time for which such disablement continued to exist, unabated. In face of that recognition and established truth, no use or purpose may be served in offering any deliberation. Therefore, we conclude, the revenue authorities were visited with a circumstance that was not of their making. It was not a mere difficulty of the usual kind. It was not a wholly temporary or transient impairment caused to their functioning. Beginning 15.03.2020, it had disabled the working of the revenue authorities, over a long period, occasioned by a 'force majeure' circumstance." 38. We perfectly concur with the above reasoning but with due respect only make a reservation insofar as the finding in Paragraph 114 that the judgment of the Hon'ble Supreme Court in Re: Cognizance for extension of limitation (supra) would not per se apply to an adjudication proceeding; which we are unable to accept; with all the respect at our command. 39. We are of the opinion, as expressed hereinabove, that the decision of the Hon'ble Supreme Court and the direction to exclude the period between 15.03.2020 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the requirement to inform such discrepancy to the assessee in the manner prescribed and seek explanation thereto. Rule 99 prescribes the manner in which the notice has to be issued in Form-GST ASMT-10. The contention is that, without such notice and a consideration of explanation by the assessee, there can be no proceeding initiated under Section 73. 43. While Section 69 provides for scrutiny of returns, Section 73 visualises a proceeding, when it appears to the Proper Officer, that any tax has not been paid or short paid and erroneously refunded or where input tax credit has been wrongly availed or utilised for any reason other than by reason of fraud or any willful statement or suppression of facts to evade tax. If there is any fraud or wilful-misstatement or suppression of facts to evade tax, the proceedings are initiated under Section 74, which has a longer period of limitation of five years under sub-section (10) of Section 74 of the GST Act. 44. According to us, Section 73 is a stand alone provision, which can be invoked separately, not coming within the ambit of a mere scrutiny of returns, when it appears to the Proper Officer that there is any escapement of tax, errone ..... 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