Know your limits part 5 A series under GST

The much awaited decision in the case of Ms Tata Play Limited Represented by its Authorized Signatory And Others Versus Union of India, State of Tamil Nadu, Commercial Taxes Department, Commissioner of GST & Central Excise, Additional Commissioner, Office of the Additional Commissioner of GST and Central Excise, Central Board of Indirect Taxes and Customs, New Delhi And Others - 2025 (7) TMI 772 - MADRAS HIGH COURT by the Madras High Court is in public domain now. The core issue is on applicability of Section 168A and extension of time under section 73 through various notifications. In the following paragraphs, various observations of the Madras High Court are discussed for wide publicity as this is an important case.

Various parties have challenged the validity of the notifications numbers 09/2023 and 56/2023 both issued under Section 168A of the CGST Act, 2017 extending the time limit under section 73(9) for passing the adjudication order. The High Court has passed an interesting common order which is further discussed below.

As provided under section 73, the crucial date for determining the period up to which SCN may be issued and orders may be passed are two years and nine months for SCN and three years for Order from the due date for filing the respective annual return.

For the financial years 2017-18 (July to March), 2018-19 as well as 2019-20, the due date for filing the returns was extended through various notifications. Over and above the extensions made in the manner as above, Section 168A was also invoked and few notifications were also issued to facilitate the officers passing orders to have more time taking the plea that there was force majeure situations.

Section 168A very clearly lays down that the Government may, on the recommendations of the Council, by notification, extend such time limits. However, while issuing such notifications, the required norms were not followed and the notifications seems to be ratified by the Council at a later date.

The GST Implementation Committee (GIC) is a small sub  committee and the decision of the GIC was subsequently ratified by the GST Council much after the issuance if the Notification 56/2023 and accordingly held as being issued with out GST Council recommendation which is mandatory under section 168A.

The crucial portions of the Madras High Court Order are contained in para 10 which are summarized as below.

1. For any year, for the period falling between the due date for filing the return and the dates specified for passing order under Section 73, the period falling between 15/03/2020 and 28/02/2022 may be excluded in line with Supreme Court order dated 10/01/2022  for computing such limitation.
2. Notification Nos.9 and 56 of 2023 stands vitiated and illegal
3. In addition to the above reasons, impugned notification No. 56/2023 is made even prior to the recommendations of the GST Council, failure to comply with the statutory mandate renders the

notification illegal.

1. There are issues relating to violation of principles of natural justice, lack of jurisdiction, errors apparent on the face of record etc.

Conclusion: Though the Government has not lost in terms of extension of time issued under the controversial notification numbers 9 and 56 of 2023, the observations such as vitiated and illegal are really very harsh. The CBIC and GST Council may take due care in exercising the powers vested under Section 168A in future to avoid such criticism in future.