2024 (9) TMI 1398 - HC - GST

Notification extending Section 168A time limits quashed for lacking mandatory GST Council recommendation

M/s. BARKATAKI PRINT AND MEDIA SERVICES, DHRUBAJYOTI BARKOTOKY AND OTHERS Versus UNION OF INDIA AND 4 ORS., THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, THE GOODS AND SERVICES TAX COUNCIL, THE PRINCIPAL COMMISSIONER STATE TAX, THE ASSISTANT COMMISSIONER STATE TAX AND OTHERS

M/s. BARKATAKI PRINT AND MEDIA SERVICES, DHRUBAJYOTI BARKOTOKY AND OTHERS Versus UNION OF INDIA AND 4 ORS., THE CENTRAL BOARD OF INDIRECT TAXES AND ... Issues Involved:1. Validity of Notification No. 9/2023-CT and Notification No. 56/2023-CT under Section 168A of the Central Goods and Service Tax Act, 2017.2. Validity of orders passed under Section 73(9) of the Central and State Acts.3. Requirement of GST Council's recommendation for exercising power under Section 168A.4. Existence of force majeure for extending the period under Section 168A.Issue-wise Detailed Analysis:1. Validity of Notification No. 9/2023-CT and Notification No. 56/2023-CT under Section 168A of the Central Goods and Service Tax Act, 2017:The Petitioners challenged the validity of Notification No. 9/2023-CT and Notification No. 56/2023-CT on the grounds that the conditions precedent for issuance of the notifications under Section 168A were not fulfilled. Specifically, Notification No. 9/2023-CT was challenged due to the absence of force majeure, and Notification No. 56/2023-CT was challenged for lack of GST Council recommendation and force majeure. The court found that the absence of GST Council recommendation rendered Notification No. 56/2023-CT ultra vires the Central Act, and it was set aside and quashed.2. Validity of orders passed under Section 73(9) of the Central and State Acts:The impugned Orders-in-Original were passed beyond the period prescribed under Section 73(10) of both the Central and State Acts. The court noted that the orders were appealable under Section 107 of the Central Act but could only be challenged under Article 226 of the Constitution if the notifications were ultra vires. Since the notifications extending the period were found invalid, the orders passed under Section 73(9) were without jurisdiction and thus set aside.3. Requirement of GST Council's recommendation for exercising power under Section 168A:The court emphasized that the recommendation of the GST Council is a sine qua non for exercising power under Section 168A. The term 'recommendation' was interpreted in the context of the provisions of the Constitution and the Central Act. The court referred to the Supreme Court's judgment in V.M. Kurian Vs. State of Kerala, which held that recommendations are essential for granting exemptions. Similarly, the GST Council's recommendation is necessary for extending timelines under Section 168A.4. Existence of force majeure for extending the period under Section 168A:The court noted that the definition of force majeure in Section 168A includes natural calamities, war, and epidemics. The GST Council had previously recommended an extension due to COVID-19 but had decided against further extensions. The absence of force majeure consideration by the GST Council before issuing Notification No. 56/2023-CT further invalidated the notification.Conclusion:The court declared Notification No. 56/2023-CT ultra vires the Central Act and set aside the impugned Orders-in-Original passed under Section 73(9). The court clarified that the decision does not prejudice the rights of the Central and State Governments to issue retrospective notifications as per Section 168A(2) of the Central and State Acts. The respective impugned Orders-in-Original were quashed and detailed in the Appendix to the judgment.