HC finds CGST notification on time limits under Section 73(9) prima facie invalid, grants interim protection

The HC challenged a Central Board of Indirect Taxes and Customs notification No. 56/2023 dated 28.12.2023 regarding time limits under Section 73(9) of the CGST Act, 2017, questioning its validity under Section 168A. The court found the notification prima facie not in consonance with CGST Act provisions and noted that if invalid, all consequential actions would fail. The court required examination of force majeure applicability considering GST Council's 49th Meeting minutes. Interim protection was granted to petitioner with no coercive action permitted based on the assessment order dated 05.05.2024 until respondents file affidavits by 19.08.2024.

---

---

Issues:
1. Challenge to the issuance of a notification by the Central Board of Indirect Taxes and Customs.
2. Ultra vires of Section 168A of the CGST Act, 2017.
3. Lack of recommendation from the GST Council for the issuance of the notification.
4. Extension of the time limit for passing orders under Section 73(9) of the CGST Act, 2017.
5. The concept of force majeure in relation to the notification.
6. Applicability of the notification to the Assam Goods and Service Tax Act, 2017.
7. Validity of the impugned order pertaining to the Financial Year 2018-19.
8. Entitlement of the petitioner to reliefs proposed in the Financial Bill 2024.
9. Interim protection for the petitioner pending notice.

Analysis:
The High Court addressed a writ petition challenging a notification issued by the Central Board of Indirect Taxes and Customs. The petitioner contended that the notification, No. 56/2023 dated 28.12.2023, was ultra vires Section 168A of the CGST Act, 2017 due to the absence of a recommendation from the GST Council, which is mandatory for such extensions. The petitioner argued that the notification extended the time limit for passing orders under Section 73(9) of the CGST Act, 2017 without proper authority, as the GST Council had not made any recommendation post the initial extension granted. The petitioner further asserted that the reasons cited for the extension, such as lack of manpower, did not qualify as force majeure, rendering the notification invalid under the law.

Additionally, the petitioner highlighted discrepancies between the extension granted under the CGST Act and the corresponding provisions in the Assam Goods and Service Tax Act, 2017, emphasizing that the State GST Authorities could not override the limitations set in the AGST Act based on the impugned notification. The court noted that the impugned order related to the Financial Year 2018-19 and was passed after the purported extension period, making it necessary to review the validity of the order in light of the notification's legality.

During the proceedings, the respondents argued that while there was no GST Council recommendation for the notification, steps were being taken to seek ratification. They also mentioned upcoming amendments through the Finance Bill 2024, which could impact the assessment proceedings. The Assam GST authorities contended that they followed the Central GST notifications, indicating the applicability of the impugned notification to Assam GST.

The court, after hearing all parties, observed prima facie that the notification did not align with Section 168A of the CGST Act, 2017. It highlighted the need to examine the force majeure aspect and directed the respondents to provide their stand and supporting materials. Consequently, the court granted interim protection to the petitioner, restraining coercive actions based on the impugned assessment order until the next hearing. The respondents were instructed to file affidavits by a specified date for further proceedings.

---