CBIC Notification on GST Amnesty Scheme cannot Prescribe Retrospective Cut-Off Date: Bombay HC [Read Order]

The Bombay High Court recently held that a notification issued by the Central Board of Indirect Taxes and Customs (CBIC) for an amnesty scheme for issues pertaining to Goods and Services Tax (GST) cannot validly operate with a retrospective cut-off date.

The Division Bench observed that Notification No. 53 of 2023 dated 2 November 2023 was intended to permit belated appeals subject to conditions; in such an instance, the notification could not reasonably exclude orders that were passed before the notification was issued.

The present writ petition was instituted by Esquire Electronics after adjudication orders were passed by the proper officers against the petitioner on 25 July 2023. The petitioner filed appeals against this before the appellate authority on 12 January 2024.

The appellate authority dismissed those appeals by orders dated 12 July 2024 on the ground that the appeals had been instituted beyond the prescribed period of limitation. Aggrieved, the petitioners challenged the dismissal through the present petition, relying on the CBIC notification of 2 November 2023, which they claimed to have extended the period for filing appeals till 31 January 2024.

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Ramachandran Mattiyil and Animesh Srivastava argued for the petitioners and placed reliance on the CBIC notification dated 2 November 2023 to contend that appeals filed on 12 January 2024 fell within the extended limitation period.

Amar Mishra, Additional Government Pleader, filed an affidavit-in-reply asserting that the notification applied only to orders passed on or before 31 March 2023 and therefore did not cover the petitioners’ cases.

On the law, the Bombay High Court followed precedents from the Patna and Orissa High Courts, which had found no rational basis for fixing 31 March 2023 as the cut-off when the notification itself was issued on 2 November 2023. The Bombay High Court specifically referred to the decision of the Patna High Court in Nexus Motors Pvt. Ltd. vs. State of Bihar (2023) to make this observation.

The Bench of Justice M.S. Sonak and Justice Advait M. Sethna observed that orders passed at least three months before the notification ought to have been considered for beneficial treatment under the amnesty.

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Consequently, the Bombay High Court directed that the impugned orders dated 12 July 2024 be set aside and the appeals restored to the appellate authority for a fresh decision on merits, subject to the petitioner’s compliance with the conditions of Notification No. 53 of 2023 which included payment of admitted amounts and the 12.5% pre-deposit requirement with at least 20% debited from the Electronic Cash Ledger.

The petitioner's counsel stated that they had paid an amount of 10% as pre-deposit, to which they were directed to pay the differential amount within four weeks of upload of the order; if paid, the appellate authority was to adjudicate the appeals on merits.

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