Ratification cannot substitute recommendation

The Hon’ble Gauhati High Court in the case of theCENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, GOODS AND SERVICES TAX COUNCIL, NEW DELHI AND UNION OF INDIA VERSUS M/S. BARKATAKI PRINT AND MEDIA SERVICES, DHRUBAJYOTI BARKOTOKY, PRINCIPAL COMMISSIONER STATE TAX GUWAHATI AND ASSISTANT COMMISSIONER STATE TAX, GUWAHATI - 2025 (1) TMI 588 - GAUHATI HIGH COURTdismissed the review petition wherein the Petitioner had file review application of M/S. BARKATAKI PRINT AND MEDIA SERVICES, DHRUBAJYOTI BARKOTOKY AND OTHERS VERSUS UNION OF INDIA AND 4 ORS., THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THE GOODS AND SERVICES TAX COUNCIL, THE PRINCIPAL COMMISSIONER STATE TAX, THE ASSISTANT COMMISSIONER STATE TAX AND OTHERS - 2024 (9) TMI 1398 - GAUHATI HIGH COURT, whereby the Court had held that Notification No. 56/2023-Central Tax dated December 28, 2023(“the Notification”)to be ultra vires of the Central Goods and Services Tax Act, 2017(“the CGST Act”). Hence, the said order was set aside and the Notification was quashed.

The issue raised in the review petition was that the Notification was subsequently ratified by the GST Council in its meeting held on June 22, 2024.

This Court during the course of the hearing enquired whether a ratification subsequently can take care of the recommendation which was required as per Section 168A of the CGST Act.

This query was made taking into account that by way of a recommendation a process is initiated by way of a proposal, whereas ratification can only be applied when there is a requirement of an approval and both the terms, under no circumstances, can be said to be the same.

Hence, the court did not find any ground for exercising it review jurisdiction. Hence, the review petition was dismissed.

Our Comments:

The Hon’ble Gauhati High Court's dismissal of the review petition highlights the importance of procedural compliance in legislative recommendations under Section 168A of the CGST Act. The Court's inquiry into the distinction between recommendation and ratification underscores that the latter cannot substitute the former.

Section 168A of the GST Act provides that extension notification can be issued on the recommendation of the GST Council. So far as notification No. 56/2023 is concerned, there was no prior notification of GST Council. The counter of the Department filed in the pari materia cases show that the Notification was issued on the basis of decision taken by GST Implementation Committee/Law Committee. Thus, decision of Implementation/Law Committee was ratified by GST Council after six months from the date of issuance of the Notification. The meaning of words ‘recommendation’ and ‘ratification’ were highlighted to show the difference between the two. The ‘recommendation’ is always prior in time which forms basis for taking a decision, whereas, ‘ratification’ is a subsequent exercise for a decision which has already been taken. In view of statutory mandate ingrained in Section 168A of the CGST Act, subsequent ‘ratification’ cannot satisfy the requirement of statute i.e., ‘on the recommendation of the GST Council’.

 (Author can be reached at [email protected])