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Notification No. 56/2023 – CT extends time limit for adjudication under section 73 is ultra vires to Section 168A of the CGST Act.

The petitioner is a works contractor. An order came to be passed for financial year 2018- 2019. It demanded CGST and ASGST. It was challenged in writ petition. There was also a challenge to Notification No.56/2023 – CT dated 28.12.2023 which extends the time limit for passing of orders under section 73 of the CGST Act. It was contended that: (i) the notification lacks a formal recommendation from the GST Council, which is a mandatory requirement under Section 168A of the CGST Act, 2017; (ii) the reason for extension—lack of manpower— as can be seen from the minutes of meeting of the 46th GST Council meeting does not qualify as force majeure. force majeure allows extensions only in exceptional situations, such as during the COVID-19 pandemic, which has now passed and (iii) while the Central Government issued the notification, the Assam Government has not issued a similar extension. This raises questions about the applicability of the notification under the Assam GST Act. The Hon’ble Gauhati High Court set aside Notification No.56/2023-CT as ultra vires section 168A of the Act and the consequential demands. It held: (i) there is no recommendation of the GST council which is a sine qua non for invocation of section 168A of the Act; (ii) the recommendations of the GST council cannot be sought on post facto basis; and in fact no such attempt has been made; (iii) the notification makes a false statement that it is issued on the recommendations of the GST council; (iv) refers to and relies upon judgment of the Supreme Court in the case of VKC Footstep and Mohit Minerals; which held that the recommendation of the GST council is binding on the subordinate legislation; (v) the state of Assam has not, in fact, even issued any such notification till filing of the petition. 

Hindustan Construction Company Limited v. Union of India & Ors – WP (C) No. 4226 of 2024 [Gauhati HC]

 

 

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