Government's GST Limitation Extension Notification Challenged, Validity Questioned Without Council's Recommendation Under Section 73(9) HC ruled that Notification No. 56/2023 extending limitation under CGST Act lacks GST Council recommendation, rendering it potentially invalid. Court ...
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Government's GST Limitation Extension Notification Challenged, Validity Questioned Without Council's Recommendation Under Section 73(9)
HC ruled that Notification No. 56/2023 extending limitation under CGST Act lacks GST Council recommendation, rendering it potentially invalid. Court directed respondents to refrain from taking coercive action against petitioner regarding DRC-01 notice dated 08.05.2024. Authorities permitted to pass order under Section 73(9) but prohibited from implementing coercive measures. Next hearing scheduled for 21.08.2024.
Issues: Challenge to Notification No. 56/2023 dated 28.12.2023 under Section 168A of the CGST Act of 2017 Validity of notice under DRC-01 dated 08.05.2024 issued by respondent No.4 under Section 73 of the CGST Act of 2017
Analysis: The petitioners challenged Notification No. 56/2023 dated 28.12.2023, which extended the limitation under Section 168A of the CGST Act of 2017 and the notice under DRC-01 dated 08.05.2024 issued by respondent No.4. The petitioners argued that the notification was ultra vires as it was issued without the mandatory recommendation from the GST Council and without the existence of force majeure circumstances. The petitioners contended that the extension was sought due to inadequate staff, which does not qualify as force majeure as per Section 168A. Additionally, the petitioners pointed out that the notice issued on 08.05.2024 did not comply with the three-month prior issuance requirement under Section 73(2) of the CGST Act of 2017.
The court considered the arguments and noted that the absence of a recommendation from the GST Council before issuing Notification No. 56/2023 raised doubts about its legality. The court opined that if the notification itself was invalid, any actions taken based on it would also be unsustainable. Therefore, the court directed the respondent authorities not to take coercive action against the petitioner regarding the notice dated 08.05.2024 until the next returnable date. The court allowed the respondent authorities to pass an order under Section 73(9) of the CGST Act of 2017 during this period but prohibited any coercive actions based on that order.
In conclusion, the court scheduled the next hearing for 21.08.2024 and instructed the registry to include the name of Mr. B Choudhury, the standing counsel for the Finance and Taxation Department, and the counsel for the State GST in the cause-list.
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