Notification No.56/2023 invalidated for violating Section 168A CGST Act procedural rules, orders set aside

The HC held that Notification No.56/2023 dated 28.12.2023 was vitiated and illegal due to non-compliance with mandatory procedural conditions under Section 168A of the CGST Act, 2017. The Court relied on its prior ruling in MS TATA PLAY LIMITED, emphasizing issues of jurisdiction, violation of natural justice, and errors apparent on the record. Consequently, all impugned orders based on the notification were set aside, and the writ petition was disposed of accordingly.

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ISSUES:

1. Whether Notification No.56/2023 issued by the GST Council is valid or illegal.

2. Whether the period from 15.03.2020 to 28.02.2022 is to be excluded while reckoning limitation under sub-sections (2) and (10) of Section 73 of the CGST Act, in light of the Supreme Court order under Article 142 of the Constitution.

3. Whether the impugned notification results in diminishing or curtailing the limitation period available to authorities under the CGST Act, thereby extinguishing vested rights.

4. Whether the impugned notification was issued in compliance with statutory mandates, including proper recommendation by the GST Council.

5. Whether principles of natural justice, jurisdictional errors, and errors apparent on the face of the record arise in the issuance or application of the impugned notification and related orders.

6. The appropriate procedural course for adjudication of challenges to assessment/adjudication orders or notices issued under the impugned notification.

RULINGS / HOLDINGS:

1. The impugned Notification No.56/2023 stands "vitiated and illegal" for multiple reasons including non-compliance with statutory mandates and erroneous assumptions regarding limitation periods.

2. The authorities under the CGST Act shall have the benefit of exclusion of the period 15.03.2020 to 28.02.2022 while reckoning limitation under sub-sections (2) and (10) of Section 73, as per the Supreme Court order dated 10.01.2022 under Article 142 of the Constitution.

3. The impugned notification results in "diminishing / curtailing the limitation" period and extinguishes vested rights of action, thereby suffering from the vice of arbitrariness.

4. The impugned notification was issued prior to the recommendations of the GST Council and on the basis of recommendations by the Goods and Investment Council (GIC), which "cannot be a substitute for GST Council," rendering it illegal.

5. Issues relating to violation of principles of natural justice, lack of jurisdiction, and errors apparent on the face of the record require re-examination by the assessing authorities.

6. All impugned orders are liable to be set aside, and petitioners shall treat such orders as show cause notices and submit objections within eight weeks of the order's web publication; authorities shall pass fresh orders after affording opportunity of hearing.

RATIONALE:

1. The Court applied the legal framework under the CGST Act, specifically Section 73 and Section 168A, and relied on the Supreme Court's order dated 10.01.2022 passed under Article 142 of the Constitution, which mandates exclusion of certain periods in limitation reckoning.

2. The Court emphasized that any notification that diminishes or curtails limitation periods contrary to the Supreme Court's order and statutory provisions is "arbitrary" and "unsustainable."

3. The Court underscored the statutory mandate that notifications must be issued based on proper recommendations by the GST Council, and failure to comply renders such notifications illegal.

4. The Court noted that the impugned notification was issued prematurely and on erroneous assumptions of law, without examining relevant materials, thereby vitiating its validity.

5. The Court followed a prior common order dated 12.06.2025, ensuring consistency and uniformity in adjudication of similar writ petitions and directing remand to assessing authorities for fresh consideration.

6. The Court declined to impose pre-conditions on remand, maintaining uniformity with earlier orders, but left open the possibility of considering such conditions in future cases.

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