2024 (9) TMI 42 - HC - GST

GST notification violates Section 168A due to missing Council recommendation, interim protection granted

The Gauhati HC found that notification No. 56/2023 dated 28.12.2023 prima facie violates Section 168A of the CGST Act, 2017 due to absence of mandatory ... Challenge to notification bearing No. 56/2023 dated 28.12.2023 - ultra vires Section 168A of the CGST Act, 2017 on the ground that there is no recommendation of the GST Council which is the mandatory requirement for the purpose of issuance of the said notification, or not - HELD THAT:- It prima facie appears that the notification bearing No.56/2023 is not in consonance with the provisions of 168(A) of the Central GST Act, 2017. If the said notification cannot stand the scrutiny of law, all consequential actions so taken on the basis of such notification would also fail. This Court also finds that an examination would be required as regards the applicability of the force majeure in respect to the notification bearing No. 56/2023 taking into account the contents of the Minutes of the 49th Meeting of the GST Council. However for the purpose of deciding the same, this Court is of the opinion that an opportunity has to be granted to the Respondent Authorities to place on record their stand as well as bringing on record the materials on which they claim the applicability of the force majeure. This Court is of the opinion, that the Petitioners herein are entitled to an interim protection pending the notice. Till the next date, no coercive action shall be taken on the basis of impugned assessment order dated 26.04.2024 - The Respondents are directed to file their affidavits on or before 19.08.2024. Issues:1. Validity of a notification issued by the Central Board of Indirect Taxes and Customs under Section 168A of the CGST Act, 2017 without a recommendation from the GST Council.2. Whether the notification extending the time limit for passing orders under Section 73(9) of the CGST Act, 2017 is ultra vires the law.3. Applicability of force majeure in extending the time limit for assessments under the CGST Act, 2017.4. Interpretation of similar provisions in the Assam Goods and Service Tax Act, 2017 in relation to the notification issued by the Central Board of Indirect Taxes and Customs.5. Entitlement of the Petitioners to relief pending the notice and the validity of the assessment order dated 26.04.2024.Analysis:1. The petitioners challenged a notification issued by the Central Board of Indirect Taxes and Customs without a recommendation from the GST Council, extending the time limit for passing orders under the CGST Act, 2017. The petitioners argued that the notification was ultra vires Section 168A of the CGST Act, 2017 as it lacked the mandatory recommendation. They also contended that the extension was not justified as the reasons cited, such as lack of manpower, did not constitute force majeure. The petitioners further highlighted that the Assam GST Act, 2017 did not provide for a similar extension, making the notification inconsistent with the law.2. The Respondents, representing the Central and Assam GST authorities, defended the notification by citing a recommendation from the GST Implementation Committee and the potential amendments through the Finance Bill 2024. They argued that the Petitioners would receive relief once the amendments were implemented. However, the Court observed that the notification did not align with Section 168A of the CGST Act, 2017, potentially rendering all actions based on it invalid. The Court acknowledged the need to examine the applicability of force majeure, as claimed by the Respondents, based on the contents of the GST Council meeting minutes.3. The Court granted interim protection to the Petitioners, restraining coercive actions based on the impugned assessment order dated 26.04.2024 until the next hearing. It directed the Respondents to file affidavits by a specified date, indicating a thorough examination of the issues raised and the need for further clarification regarding the validity of the notification and the applicability of force majeure in the context of the CGST Act, 2017.