The Gauhati High Court has held that the State goods and services tax ( GST ) Authorities cannot take the benefit of Notification No. 56/2023-CE, which ultra vires the central Goods and Service Tax Act ( CGST Act ), 2017.
The bench found that prima facie the notification bearing No. 56/2023 is not in consonance with the provisions of GST Section 168(A). If the notification cannot stand the scrutiny of law, all consequential actions so taken on the basis of notification would also fail.
The petitioners/assessee, Shree Shyam Steel challenged the action on the part of the Central Board of Indirect Taxes and Customs in issuance of a notification bearing No. 56/2023 dated 28.12.2023.
It was contended 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 recommendation of the GST Council, which is the mandatory requirement for the purpose of issuance of the notification. Section 168A, with its non-obstante clause, grants the government overriding authority to extend deadlines for completing proceedings and taking action.
As per the GST Council recommendation, a notification bearing No. 9/2023-CE was issued on 31.03.2023 by the Central Board of Indirect Taxes and Customs. It was found that the GST Council has not made any recommendation till date, and in spite of that, the Central Board of Indirect Taxes and Customs issued a Notification bearing No. 56/2023-CE dated 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 Finance
The petitioner contended that as per Section 168A of the GST legislation without the recommendation, the government cannot issue the notification for extending the period under Section 168A of the GST statute and as such, the notification bearing No. 56/2023 dated 28.12.2023 is ultra vires the CGST Act, 2017. The notification cannot stand the scrutiny of law in view of the fact that the power to exercise under Section 168A is conferred only on the basis that there is a force majeure.
On the other hand the department contended that the provisions of Section 11(4) of the Assam GST law permits that certain notifications that relate to Sections 11(1) and 11(2) of the Assam GST Act, 2017 can only be adopted. A notification granting an extension is not conceived in Section 11(4) of the AGST Act, 2017, and as such, the state GST authorities cannot take advantage of the notification bearing No. 56/2023-CE, which is also otherwise ultra vires the CGST Act, 2017.
The Single bench of Justice Devashis Baruah observed that the GST Council has not made any recommendation till date, and in spite of that, the Central Board of Indirect Taxes and Customs issued a Notification bearing No. 56/2023-CE dated 28.12.2023, thereby extending the period to pass the the order under Section 73(9) of the GST Act for the Financial Year 2018-2019 up to the 30.04.2024 and for the Financial Year 2019-2020 up to the 31.08.2024.
The court held that the petitioners are entitled to interim protection pending the notice and directed that no coercive action shall be taken on the basis of the assessment order dated April 26, 2024.
A. Jain appeared for the petitioner and S. C. Keyal appeared for the respondent.
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