HC: Gauhati GST Dept. Can’t Benefit from an Illegal Notification Under the CGST Act

The Gauhati High Court ruled that the State GST Authorities cannot take advantage of Notification No. 56/2023-CE, which is also otherwise ultra vires the CGST Act, 2017. Notification No. 56/2023-CE related to

The bench of Justice Devashis Baruah has remarked that the GST Council has not made any suggestion to date, and despite that, the Central Board of Indirect Taxes and Customs issued a Notification bearing No. 56/2023-CE on 28.12.2023, thereby extending the course to pass the order u/s 73(9) of the CGST Act, 2017 for the FY 2018-2019 up to the 30.04.2024 and for the FY 2019-2020 up to the 31.08.2024.

The bench noted that prima facie the notification bearing No. 56/2023 does not align with the provisions of Section 168(A) of the Central GST Act, 2017. All the measures opted based on GST notification shall indeed fail if the notification cannot stand the investigation of law.

Section 168A, with its non-obstante clause, grants the government overriding authority to extend due dates for completing proceedings and taking measures.

The action of the applicant has been contested on the part of the Central Board of Indirect Taxes and Customs in the issuance of a notification bearing No. 56/2023 dated 28.12.2023.

It was argued by the petitioner that the notification issued by the Central Board of Indirect Taxes and Customs is ultra vires Section 168A of the CGST Act, 2017 on the ground that there is no suggestion of the GST Council, which is the obligatory prerequisite for issuance of the notification.

Directing to the various provisions of the GST Act and the 49th Meeting of the GST Council, the GST Council made a recommendation by extending the time limit for passing the order u/s 73(9) of the CGST Act, 2017 for the FY 2017-2018 up to 31.12.2023 and for the FY 2018-2019 up to 31.03.2024 and for the FY 2019-2020 up to 30.06.2024.

According to the recommendation of the GST Council, a notification bearing No. 9/2023-CE was issued dated 31.03.2023 by the Central Board of Indirect Taxes and Customs. The GST Council has not made any proposal to date, and despite that, the Central Board of Indirect Taxes and Customs issued a Notification bearing No. 56/2023-CE on 28.12.2023 by extending the period to pass the order Under Section 73(9) of the CGST Act, 2017 for the Financial Year 2018-2019 up to the 30.04.2024 and for the FY 2019-2020 up to the 31.08.2024.

It was argued by the applicant that under section 168A of the CGST Act, 2017 without the proposal, the government cannot issue the notification for extending the period u/s 168A of the CGST Act, 2017 and as such, the notification bearing No. 56/2023 on 28.12.2023 is ultra vires the CGST Act, 2017. The notification cannot stand the scrutiny of law because the power to practice u/s 168A is granted exclusively because there is a force majeure.

The counsel mentioned that the provisions of section 11(4) of the Assam GST Act, 2017 allow that specific notification pertinent to Sections 11(1) and 11(2) of the Assam GST Act, 2017 could just be chosen.

A notification allotting an extension does not carry on in Section 11(4) of the AGST Act, 2017, and as such, the state GST authorities could not take advantage of the notification No. 56/2023-CE, which is also otherwise ultra vires the CGST Act, 2017.

A chance has been allotted to the department to place on record their stand and draw on record the materials where they avail the chance of force majeure.

It was ruled by the court that the applicants are qualified for interim protection pending the notice and asked that no coercive measure be opted on the grounds of the Assessment order on April 26, 2024

Case Title	Shree Shyam Steel V/S Union Of India
Case No.:	WP(C)/3838/2024
Date	02.08.2024
Counsel For Appellant	Mr. A. Jain, Advocate, Mr. H. Betala, Advocate
Counsel For Respondent	Mr. S. C. Keyal, Standing Counsel, Mr. H. Baruah, Standing Counsel
Gauhati High Court	Read Order