What we need to know on time lines for SCN as well as OIO.

This article is my 175th one on taxtmi.com and I never take help from AI for writing these articles. Only dictionary is used to cross check whether the words used are appropriate one. In a like manner my style of writing any article especially on a case law analysis is to copy and paste only the operative portion with an intention that the message must reach all concerned. However, this article is an exception as I have copied few paragraphs as I found them to be interesting which all concerned may also enjoy. The idea is that all concerned may not have access to the case law and in today's busy world may not have time as well as patience to read the judgement in full which in this case runs to 46 pages as this is a combined order for several cases by the Madurai Bench of the Madras High Court (DB) passed on 15/06/2026 in the matter of M/s. Guru and Co., M/s. Jeyabalan and Co. And Others Versus Union of India, Government of Tamil Nadu, Rep. by its Principal Secretary and Commissioner of Commercial Taxes, Goods And Services Tax Council, The Deputy Director, Directorate General of Good and Services Tax Intelligence Unit, Madurai, Central Board of Indirect Taxes and Customs, New Delhi And Others - 2026 (6) TMI 1289 - MADRAS HIGH COURT.

'Para 1: Taxation is often a cat and mouse game between the authority and the assessee. The authority spreads the net and seeks to ensnare the assessee who makes every effort to slip away. The game may witness more than one round with fluctuating fortunes'. It would not be possible explain a tax dispute in any better manner. This is a general statement on taxation whereas so far as GST is concerned, it is all the more so in almost all cases as the law took few years to settle. Things must improve from now onwards as GSTAT is already functional.

'In page 31 of the order, a para reads as 'While the GST Council's function is to make recommendations, the Central Government has the power to issue notifications. From the language of Sections 9 and 11 of the Act, it is seen that the notification by the Government will have to be 'on the recommendations' of the Council. In other words, the notification should be preceded by the Recommendations'. Thus the high court concluded that there is no concept of ratification of a notification by the GST Council as notification itself is possible only with the recommendations of the GST Council. It may be noted that parliament is Supreme which enacts the law whereas rules and notifications are only sub ordinate legislation and have to be strictly in line with the provisions contained in the Act.

'16.The power of GST Council is traceable to Article 279A of the Constitution of India. Article 279A empowers the GST Council to make recommendation with respect to the matters set out in Article 279A(4). The power to ratify has no where been conferred'. This is a clear and settled position whereas the Government was of the view that notifications may be ratified by the GST Council in subsequent meeting which is strictly impermissible as held by the Madras High Court in the above referred case.

The operative portion reads as 'Neither the Constitution nor any statute has invested the

GST Council with the power of ratification. We, therefore, hold that ratification made by the GST Council in 22nd meeting is without jurisdiction. The second issue is answered accordingly. Since the impugned show cause notices are a fallout of the impugned notifications, they are liable to be set aside and stand set aside. Liberty is given to the

department to issue fresh show cause notices if they can be issued in terms of the impugned notifications to the extent they have been held valid.

20.The writ petitions stand allowed accordingly. No cost'.

This decision has come at the most appropriate time as taxpayers may revisit the cases covered by the above decision and in case the first appeal is preferred, they are lucky to approach the GSTAT, in case they are aggrieved by the order of the first appellate authority. Only on 30/06/.2026, the Tripura High Court ruled that notifications extending time for filing annual returns do not automatically extend time line for either issuing the SCN or for passing the OIO. This decision also strengthens the same view.

As GST law has already entered the 10th year and the concept concurrent jurisdiction by both centre as well as state create genuine hardships to the taxpayers who have to furnish reply two times, appear before authorities two time etc., it is requested that GST Council may in the next meeting bring at least some partial relief by amending the law in such a way that only the authorities with whom the taxpayer is registered must be in a position to conduct audit, investigation, issue SCN etc. In case a particular taxpayer is registered with State Authorities and DGGI has some suspicion or inputs on a particular taxpayer, the same may be referred to State Authorities to handle the matter appropriately which avoids inconvenience to both tax administrator as well as taxpayer.

It is concluded by stating that wherever appeal was preferred under Section 107, irrespective of the fact as to whether in whatever stage the appeal is, second appeal is possible in case the following time lines are exceeded.

All concerned may take full advantage. 73 as on date possible only for two years whereas 74 as on date possible for only three years for issuing the respective SCN.