Madras HC affirms CBIC Notifications Extending Time limit to Issue order u/s 73 Ultra vires to S. 168A, says both ‘Illegal’ [Read Order]

The Madurai Bench of Madras High Court has once again confirmed that the Central Board of Indirect Taxes and Customs ( CBIC ) exceeded its statutory powers while issuing two Notifications which sought to extend the time limit for passing adjudication orders under Section 73 of the CGST Act, 2017.

In a writ petition filed by Tvl. Voylla Fashions Private Limited, the petitioner-assesee challenged the validity of the above CBIC notifications 09/2023-Central Tax dated 31 March 2023 and Notification No. 56/2023-Central Tax dated 28 December 2023 to the consequential assessment order for AY 2019-20.

The petitioner contended that Section 168A empowers the Government only to extend limitation in situations of force majeure, and that such power cannot be exercised in a manner that defeats or curtails the benefit flowing from binding orders of the Supreme Court passed under Article 142 of the Constitution. The petitioner also argued that the impugned notifications operated retrospectively and violated Articles 14, 246A, and 265 of the Constitution.

The Court noted that the very same issue had already been decided by a coordinate Bench in a batch of writ petitions , decided on 12 June 2025.

The bench, following the said judgment, said that while GST authorities are entitled to the exclusion of the COVID period from 15 March 2020 to 28 February 2022, as directed by the Supreme Court, the CBIC notifications went far beyond Section 168A by reworking and curtailing the limitation period itself, extinguishing vested rights and proceeding on an erroneous understanding of the Supreme Court’s directions.

In the referred previous ruling on this issue, the court observed that the notifications were vitiated on multiple grounds, including arbitrariness, non-application of mind, and procedural illegality.

In particular, it observed that Notification No. 56/2023 was issued even prior to a valid recommendation of the GST Council, and that recommendations of bodies like the GST Implementation Committee (GIC) cannot substitute the mandatory constitutional role of the GST Council. Such lapses itself makes the notifications illegal.

Accordingly, Justice Krishnan Ramasamy quashed both CBIC notifications as illegal and set aside the consequential assessment order dated 28 August 2024.

However, in line with the earlier batch decision, the matter was remanded to the assessing authority, with directions to treat the impugned assessment order as a show cause notice and to grant the petitioner an opportunity to file objections and be heard afresh before passing a new order in accordance with law

The Court held that these notifications are ultra vires Section 168A, arbitrary, and legally unsustainable, and accordingly declared them illegal.

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