TaxTMI 
TaxTMI 
2025 (6) TMI 350
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....pondent No. 5. 3. Mr. Mishra, learned counsel for the petitioner submits that the petitioner, who is a business man has been served with a Show-Cause Notice dated 30.05.2024, by the respondent No. 5, under the provisions of Central Goods and Service Tax Act, 2017/Arunachal Goods & Service Tax Act, 2017. Mr. Mishra further submits that Section 168A of the CGST Act, 2017, vests power with the Government to extend time limit prescribed under CGST Act, 2017, in respect of the actions which cannot be completed or complied due to force majeure and in respect of financial year 2019-2020, the due date of issuance of order under Section 73 of the CGST Act, 2017 was 31.03.2024 However, the respondent No. 2, vide notification No. 09/2023 dated 31.03.2023, extended the time limit prescribed under Section 73 of the CGST Act, 2017 till 31.03.2024, without there being any force majeure as required under Section 168A of the CGST Act, 2017, which was further extended up to 31.08.2024, vide Notification No. 56/2023-Central Tax, dated 28.12.2023, without there being any recommendation of the GST Council. And on the strength of such extension, the respondent No. 5 passed the impugned order dated 29.0....
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....ation provided under Sub-section (10) of the Section 73 of the CGST Act for the financial year 2018-19 and 2019-20 in the following manner; "(i) for the Financial Year 2018-19, up to the 30th day of April, 2024; (ii) for the Financial Year 2019-2020, up to the 31st day of August, 2024." 9. In terms of the said extension of time so prescribed, proceedings came to be instituted against the petitioner's firm herein and accordingly, on conclusion of the same, order in original dated 29.08.2024 was passed confirming the demand of Rs.1,20,01,973/-(Rupees one crore twenty lakhs one thousand nine hundred seventy three)only against the petitioner. 10. Similar challenge to the Notification No. 56/2023-Central Tax, dated 28.12.2023 was also presented before the Coordinate Bench of this Court in the proceedings of WP(C) No. 3585/2024. The Coordinate Bench of this Court had taken up such challenge in WP(C) No. 3585/2024 along with other analogous matters and was pleased to dispose of the said petitions by way of Judgment and order dated 19.09.2024, holding the said notification to be ultra vires of the Central Act and to be not sustainable. Accordingly, the said notification was set aside....
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....be exercised under Section 168A by the Government is when a recommendation is made by the GST Council. The question therefore arises as to whether the recommendation of the GST Council is sine qua non for exercise of the power under Section 168A by the Government. 41. In the Black's Law Dictionary, 11th Edition, the term "recommendation" is defined as - "A specific piece of advice about what to do, esp. when given officially. A suggestion that someone should choose a particular thing or person that one thinks particularly good or meritorious." 42. In the case of V.M. Kurian Vs. State of Kerala reported in (2001) 4 SCC 215, the Supreme Court was dealing with Rule 5 of Kerala Building Rules and the question which arose was whether without the recommendation of Greater Cochin Development Authority and the Chief Town Planner, the State Government could have granted exemption from the operation of the Kerala Building Rules for construction of an eight storey building. The Supreme Court in the said judgment observed that the word "recommendation" is "a statement expressing commendation or a message of this nature". However, taking into account that the word "recommendation" w....
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....Government along with the specific recommendations of GCDA and the Chief Town Planner. The question, therefore, that arises for consideration is whether in the absence of any recommendation by GCDA and the Chief Town Planner the State Government was competent to grant exemption from the operation of the Rules for construction of a high-rise building. The dictionary meaning of the word "recommend" is "to advise", "to praise or commend". In P. Ramanatha Aiyar's Law Lexicon, the meaning of the word "recommendation" is "a statement expressing commendation or a message of this nature" or suggests fit. It is true that the word "recommendation" is not defined in the Rules. If we do not go by the meaning of the word "recommendation", as suggested by learned counsel for the 5th respondent, and found that there is no conclusive meaning of the word "recommendation" we are of the view that in such a situation the meaning of the word has to be understood in the context of the provisions of the Rules and the object behind such Rules. The Rules with which we are concerned here provide for regulation and construction of a building in an urban area. The object behind the Rules is maintenance of....
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....nd State Act. In the earlier segments of the instant Judgment, this Court had dealt with Article 246A as well as Article 279A of the Constitution, Article 246A of the Constitution confers both upon the Parliament and the State Legislature simultaneous power to legislate on Goods and Service Tax. The said power can be exercised notwithstanding anything contained in Article 246 and 254 of the Constitution. It is also pertinent to take note of that the said power conferred on the Parliament and the State Legislature is not subject to Article 279A except to the extent that in respect to the Goods and Service Tax to be levied on petroleum, crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, the power can be exercised under Article 246A from the date recommended by the GST Council. 44. This Court had also dealt with in detail as regards Article 279A of the Constitution. The power to make recommendation to the Union and the States is mentioned in Article 279A (4) of the Constitution. It is also apposite to observe that the recommendation to be made shall be guided by the need for a harmonized structure of Goods and Service Tax and fo....
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....ion and collaboration. This Court at this stage further finds it relevant to quote paragraph Nos. 55 and 56 of the judgment of the Supreme Court in Mohit Minerals Pvt. Ltd. (supra). "55. Such form of contestation or as the authors term it, "uncooperative federalism" is valuable since "it is desirable to have some level of friction, some amount of State contestation, some deliberation-generating froth in our democratic system." [ Jessica Bulman-Pozen and Heather K. Gerken, "Uncooperative Federalism", Yale Law Journal, Vol. 118. No. 7 (May, 2009). p. 1284.] Therefore, the States can use various forms of contestation if they disagree with the decision of the Centre. Such forms of contestation are also within the framework of Indian federalism. The GST Council is not merely a constitutional body restricted to the indirect tax system in India but is also an important focal point to foster federalism and democracy. 56. One of the important features of Indian federalism is "fiscal federalism". A reading of the Statement of Objects and Reasons of the 2014 Amendment Bill, the Parliamentary reports and speeches indicate that Articles 246-A and 279-A were introduced with the objective of ....
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.... meaning thereby taking into account the analysis made in the previous paragraphs that there is a favourable report by the GST Council for the Government to exercise the power under Section 168A. The existence of the recommendation is a sine qua non for exercising the power under Section 168A to extend the timelines and without the recommendations, the exercise of the power would be legally not sustainable. On the other hand, the effectiveness of the recommendation has to be judged on the principles of whether such recommendation is binding on the Union or the State. For example, the GST Council may have made a recommendation to carry out a particular exercise by the Government under the Central Act or the State Act. The said recommendation may be binding upon the Government or may not be depending upon the purpose of the enactment. But the fact that it is not binding cannot be construed to mean that the Government can act without a recommendation of the GST Council if the Central Act or the State Act stipulates that the Government can exercise on the recommendation of the GST Council. (ii) At this stage, this Court finds it pertinent to further deal with the judgment of the Supr....
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....he recommendations of the authority are expressly stated to be "binding" on the decision-making authority. 59. The GST Council which is a constitutional body is entrusted with the duty to make recommendations on a wide range of areas concerning GST, The GST Council has plenary powers under Article 279-A (4) (h) where it could make recommendations on "any other matter" related to GST as the Council may decide. The GST Council has to arrive at its recommendations through harmonised deliberation between the federal units as provided in clause (6) of Article 279-A. Unlike the other provisions of the Constitution which provide that recommendations shall be made to the President or the Governor, Article 279-A states that the recommendations shall be made to the "Union and the States". The recommendation of the GST Council made under Article 279-A is non-qualified. That is, there is no explanation on the value of such a recommendation. Yet the notion that the recommendations of the GST Council transform into legislation in and of themselves under Article 246-A would be far-fetched. If the GST Council was intended to be a decision-making authority whose recommendations transform to legis....
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.... of the IGST and the CGST Act. Merely because a few of the recommendations of the GST Council are binding on the Government under the provisions of the CGST Act and the IGST Act, it cannot be argued that all of the GST Council's recommendations are binding. As a matter of first principle, the provisions of the Constitution, which is the grundnorm of the nation, cannot be interpreted based on the provisions of a primary legislation. It is only the provisions of a primary legislation that can be interpreted with reference to the Constitution. The legislature amends the Constitution by exercising its constituent power and legislates by exercising its legislative power. The constituent power of the legislature is of a higher constitutional order as compared to its legislative power. Even if it is Parliament that has enacted laws making the recommendations of the GST Council binding on the Central Government for the purpose of notifying secondary legislations, it would not mean that all the recommendations of the Council made by virtue of its power under Article 279-A have a binding force on the legislature.' (vii) The above analysis by the Supreme Court would show when a reco....
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....the recommendations of the Council" which on the face of it shows that the exercise of power by the Central Government insofar as the Notification No. 56/2023-CT is concerned is a colourable exercise of power for which the said Notification No. 56/2023-CT is a colourable legislation. 48. Another ground of challenge to the Notification No. 56/2023-CT is that as there was no element of force majeure, the question of exercising the power under Section 168A did not arise. In the previous segment of this judgment, this Court had dealt with the Explanation to Section 168A. The Explanation to Section 168A deals with various types of natural calamities, war, epidemic to come within the ambit of force majeure. It is pertinent to mention that the recommendation to be made by the GST Council have also to be based upon the existence of force majeure conditions. In the 49th Meeting of the GST Council, it was clearly recorded that there shall be no further extension beyond the three months in the interest of the tax payers. The Notification No. 56/2023-CT was issued without the recommendation and that natural corollary thereof is that the GST Council had no occasion to consider existence of fo....