Madras High court on Section 168A of CGST ACT

In order to handle situations arising out of force majeure, Section 168A was enacted which provides for extension of time limit with prior recommendations of the GST COUNCIL. Accordingly, in order to extend a specified time limit, there are two basic requirements one being force majeure situations and prior recommendation of the GST Council. There are several notifications which provides for time extension in line with Section 168A.

It would be interesting to note that Covid 19 is undoubtedly a force majeure which had two waves whereas the Section 168A was invoked on five occasions through various notifications. It is not the case that every time there was a recommendation by the GST Council for such extension before issuance of such notifications. Government, when this lacuna was notified by various high courts took the stand that they have taken post facto approval from the GST Council, consequent to issuance of the notifications, which are tabled as below:

While prior recommendation of the GST Council is available for few cases, the same was not obtained in respect of the notification dated 28/12/2023 which extended the time limit under section 73(10) for the financial years 2018/19 and 2019/2020 by one month and two months respectively over and above the period covered under the previous notification.

Ms Tata Play Limited approached the High court of Madras vide writ petition  number 17184/2024 and the Court has held that post facto approval of GST Council is not as per the Section 168A of the CGST Act 2017 and accordingly stroke down the notification dated 28/12/2013 recently.

The final order is yet to posted and a comprehensive coverage on the impact on various notifications as above shall be covered upon the availability of the Madras High Court order soon.

This order shall have huge impact on various Show Cause notices as well as Adjudication orders passed relying upon the notifications which where stroke down by the high court. Though Revenue is likely to file SLP in the Supreme Court, chances are that SLP may be dismissed as the High court has already looked in to many applicable aspects before passing the final order.

All taxpayers who receive Show Cause Notices during the period from 01/06/2025 up to 30/06/2025 pertaining to the financial year 2018/19 stand to gain. Taxpayers who receive SCN for the year 2019/20 during 01/08/2025 up to 30/09/2025 also stand to gain.

As the above order of the HIGH COURT OF MADRAS is an important verdict, readers may kindly wait for the detailed article.