In the case of Shree Shyam Steel v. Union of India (WP(C)/3838/2024), the Honorable Gauhati High Court admitted the challenge to Notification No. 56/2023-CE issued by the Central Board of Indirect Taxes and Customs (CBIC). The notification extended the deadline for passing orders under Section 73(9) of the CGST Act, 2017 for the financial years. 2018-2019 and 2019-2020. The Honorable Court provided interim protection to the petitioners, prohibiting any coercive action based on the notification. The petitioner contended that the notification was issued without the mandatory recommendation of the GST Council, as required under Section 168A of the CGST Act, 2017.
Although the GST Council had previously made a recommendation for extending deadlines, reflected in Notification No. 9/2023-CE dated 31.03.2023, however, no such recommendation was made for the extensions in Notification No. 56/2023-CE. The Honorable Court further noted that the petitioner has argued that there is no corresponding notification issued by the Assam GST department for extending timelines. The Honorable Gauhati High Court held that Notification No. 56/2023-CE was prima facie not in consonance with Section 168A of the CGST Act, 2017. The Honorable Court found that the notification could not stand the scrutiny of law due to the absence of the necessary recommendation from the GST Council. Further directed the respondents to file affidavits.
Author’s Comments
At many instances, there is no recommendation of the GST Council, yet CBIC rolls out the notifications and then recommendation are ratified by the GST Council at a later stage. The Argument that there is no recommendation of the GST Council to extend the timelines might not hold the ground tightly to declare such notifications ultra-vires the law. Further, section 11(4) of the state GST Act gives the power to states that notification issued by the Central Government will be deemed to be issued under the State Act also. Thereby, there is no need for separate notifications to be issued by the State.
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