CBIC notification 56/2023 extending CGST Act Section 73(9) time limits challenged as ultra vires without GST Council recommendation

Gauhati HC examined challenge to CBIC notification 56/2023 extending time limits under CGST Act Section 73(9). Petitioners contended notification was ultra vires Section 168A lacking mandatory GST Council recommendation. Court found notification prima facie not consonant with Section 168A provisions, noting consequential actions based on invalid notification would also fail. HC granted interim protection against coercive action based on assessment order dated 26.04.2024 pending respondents' response on force majeure applicability. Respondents directed to file affidavits by 19.08.2024 for further examination of notification's validity.

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Issues:
Challenge to the issuance of a notification by the Central Board of Indirect Taxes and Customs under Section 168A of the CGST Act, 2017 without a recommendation from the GST Council.
Validity of the notification bearing No. 56/2023 dated 28.12.2023 extending the time limit for passing orders under Section 73(9) of the CGST Act, 2017.
Applicability of force majeure in extending the period for passing orders under the CGST Act, 2017.
Comparison of provisions under the Assam Goods and Service Tax Act, 2017 with the CGST Act, 2017 regarding extension of time limits.
Impugned order passed post the extended period and its validity.
Interim protection for the Petitioners pending further proceedings.
Affidavits to be filed by the Respondents.

Analysis:

1. The petitioners challenged the Central Board of Indirect Taxes and Customs' issuance of Notification No. 56/2023 dated 28.12.2023 under Section 168A of the CGST Act, 2017 without a recommendation from the GST Council. The notification extended the time limit for passing orders under Section 73(9) of the CGST Act, 2017 beyond the recommendations of the GST Council.

2. The petitioners contended that the notification was ultra vires the CGST Act, 2017 as it lacked the mandatory recommendation from the GST Council. They argued that the reasons for the extension, related to lack of manpower for audit and assessment, did not constitute force majeure, rendering the notification invalid.

3. Additionally, the petitioners highlighted the disparity between the provisions of the Assam Goods and Service Tax Act, 2017 and the CGST Act, 2017 regarding the extension of time limits, emphasizing that the State GST Authorities cannot nullify the limitation provisions set out in the AGST Act, 2017.

4. The Respondents, on the other hand, argued that the notification was issued based on a recommendation from the GST Implementation Committee and that steps were being taken for GST Council ratification. They mentioned upcoming amendments through the Finance Bill 2024 but acknowledged that the enactments were yet to come into force.

5. The Court observed that the notification prima facie did not comply with Section 168(A) of the CGST Act, 2017. It noted that all actions based on the notification would fail if it did not stand legal scrutiny, and directed the Respondents to file affidavits by a specified date.

6. Considering the arguments and submissions, the Court granted interim protection to the Petitioners, preventing coercive action based on the impugned assessment order until the next date of hearing. The Court also indicated the need for further examination regarding the applicability of force majeure and required the Respondent Authorities to present their stand and supporting materials.

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