TaxTMI 
TaxTMI 
2026 (6) TMI 1289
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....use game between the authority and the assessee. The authority spreads the net and seeks to ensnare the assessee who makes every effort to slip away. The game may witness more than one round with fluctuating fortunes. 2.Two issues arise for consideration in these writ petitions : a) Whether Notifications issued by the Central Government under Sections 9 and 11 of the CGST Act, 2017 can go beyond the recommendations made by the GST Council? b) Whether the GST Council has the power to ratify any Notification issued by the Central Government either under Section 9 or Section 11 of the CGST Act, 2017? 3.Before we answer the questions, let us set out the facts. The writ petitioners are suppliers of pulses such as Moong Dhal and Thoor Dhal. They have been selling their products under brand names which were not registered under the Trade Marks Act, 1999 or the Copyright Act, 1957. Following the implementation of the GST regime, the Ministry of Finance issued Notification No.1/2017 - Central Tax (Rate), dated 28.06.2017 levying Central Tax of 2.5% on the goods specified in Schedule I. Entry No.25 of the Schedule read as follows : "Dried leguminous vegetable....
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....how cause notices as null and void. The writ petitioners in W.P(MD) No. 14120 of 2022 as well as W.P(MD) No. 14208 of 2022 have challenged GO (MS) No. 114 dated 22.09.2017 issued by the Government of Tamil Nadu which has verbatim reproduced the notifications issued by the Central Government. 6.The learned counsel appearing for the writ petitioners took us through the contents of the affidavit filed in support of the writ petitions and reiterated all the grounds set out therein. They also filed written submissions. They primarily relied on the decision reported in (2022) 10 SCC 700 (Union of India Vs. Mohit Minerals Private Limited) in support of their contentions. 7.The respondents have filed a detailed counter affidavit and the learned Additional Solicitor General of India took us through the same. He submitted that the recommendations of the GST Council are not binding on the Union and the States in the sense that they are not bound to reproduce a mirror view of the GST Council's recommendations in the notification. He also relied on (2022) 10 SCC 700 (Union of India Vs. Mohit Minerals Private Limited) in support of this contention. He drew our attention to the minutes ....
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....he CGST Act, 2017 confers the rule-making power. There are many provisions in the Act empowering the Government to issue notifications. As far as CGST Act is concerned, rules issued under Section 164 and statutory notifications issued under Sections 9 and 11 are on the same pedestal. Both have to be laid before the Parliament (vide Section 166 of the CGST Act, 2017). If the Government is bound by the GST Council's recommendations while exercising its rule-making power, it is by clear implication bound by the GST Council's recommendations when exercising the power to issue notifications under Sections 9 and 11 of the Act. 9. Both rules as well as notifications would fall in the realm of subordinate legislation. The Hon'ble Supreme Court of India in the decision reported in (2006) 4 SCC 517 (State of Tamil Nadu v. P.Krishnamurthy) laid down the following parameters for striking down a subordinate legislation : "(a) Lack of legislative competence to make the subordinate legislation. (b) Violation of fundamental rights guaranteed under the Constitution of India. (c) Violation of any provision of the Constitution of India. (d) Failure t....
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....aise additional resources during any natural calamity or disaster; (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and (h) any other matter relating to the goods and services tax, as the Council may decide. (5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. (6) While discharging the functions conferred by this article, the Goods and Services Tax Council shall be guided by the need for a harmonised structure of goods and services tax and for the development of a harmonised national market for goods and services. (7) One-half of the total number of Members of the Goods and Services Tax Council shall constitute the quorum at its meetings. (8) The Goods and Services Tax Council shall determine the procedure in the performance of its functions. Insertion of new article 279A. Goods and Services Tax Council. (9) Eve....
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.... do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable. (3) The Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under subsection (2), insert an explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. Explanation.--For the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services or both shall not collect the tax, in excess of the effective rate, on such supply of goods or services or both." While the GST Council....
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....gislatures (Parliament and the State Legislatures) in the making of primary legislations, it was held in Mohit Minerals that the Government while exercising its rule-making power under the provisions of CGST and IGST Acts is bound by the recommendations of the GST Council. We have already held that what applies to rule-making power will apply to the power to notify also. 13.Having arrived at this proposition, we have to verify if the GST Council had indeed made the recommendations which are reflected in the impugned notifications. Notification No.1/2017 - Central Tax (Rate) dated 28.06.2017 and Notification No.2/2017 - Central Tax (Rate) dated 28.06.2017 levied GST on dried leguminous vegetables, shelled, whether or not skinned or split (put up in unit container and bearing a registered brand name). The Explanation to the notification is as follows : "The issue of avoidance of 5% GST on pulses, cereals and flours, put up in unit container and bearing a registered brand name, was also discussed by the GST Council. After detailed deliberations, the Council recommended that the following amendments may be made to the existing Notifications, so as to provide that: ....
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....endment in the definition of the registered brand name, a fourth condition could also be added namely, a mark or name in respect of which actionable claim is available shall be deemed to be a registered brand name. The Council approved this proposal." 14.Thereafter, the impugned Notifications dated 22.09.2017 and G.O(MS) No.114 dated 22.09.2017 were issued. The relevant portions read as follows:- Notification 27 "In the said notification,- (A) in Schedule I-5%,- (i) against serial numbers 11, 13, 25, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 58 and 59, in column (3), for the words 'put up in unit container and bearing a registered brand name', the words, brackets and letters 'put up in unit container and,-""...name shall, on each such unit containers, clearly print in indelible ink, both in English and the local language, that in respect of the brand name as defined in Explanation (ii)(a) printed on the unit containers he has foregone his actionable claim or enforceable right voluntarily." Notification 28 (ii) against serial numbers 29 and 45, in column (3), for the words other than put up in unit container bearing a register....
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....t of law" are not synonymous. While actionable claims may be enforceable rights, the vice versa may not hold good. It is for this reason, "enforceable right in a court of law" found in the impugned notifications should be considered as additions. The Government had gone over and above what was recommended by the GST Council. It is not a case where the Government disregarded the recommendations of the GST Council. The Notifications reflect the recommendations but also go beyond. The Government in Tata Play Limited case had notified without there being a GST Council recommendation; only a subordinate committee (GIC) made its recommendation. In that context, it was held that the Government may decline to act on the recommendation but cannot act without it. The case on hand is also in a sense similar. The notifications also contain aspects on which there were no recommendations. It is a case of "no recommendation" in respect of aspects in which the Government had gone beyond. We are of the view that the additions lack the foundation of recommendation and it is not "on the recommendation" of the GST Council. Thus, the impugned notifications by the Central Government as well as the State....
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....aling with the effect of ratification with regard to exercise of statutory power, the Hon'ble Supreme Court held that the principle of ratification is alien to exercise of power under statutory provision. The relevant extracts are as follows: "27. These principles of ratification, apparently do not have any application with regard to exercise of powers conferred under statutory provisions. The statutory authority cannot travel beyond the power conferred and any action without power has no legal validity. It is ab initio void and cannot be ratified." 17.The Hon'ble Telangana High Court was confronted with the issue as to whether the GST Council could have ratified and given its stamp of approval to the recommendation of the implementation/law committee (an in-house creation of the GST Council) with retrospective effect. Answering in the negative, the Hon'ble Division Bench in the decision reported in (2025) 139 GSTR 657 (Brunda Infra (P) Ltd. v. Commr. of Central Tax) held that ratification cannot be equated to recommendation and that "ratification" done after issuance of Notification will not provide life to the Notification. 18.'Ratification' is the appr....