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2025 (5) TMI 555 - HC - GSTIssuance of notice and order u/s 73 of CGST Act 2017 - Legality validity and propriety of Notification Nos. 9 and 56 of 2023 dated 31.03.2023 28.12.2023 respectively - HELD THAT - The issue is already under consideration before the Hon ble Supreme Court of India in M/s HCC-Sew-MEIL-AAG-JV vs. Assistant Commissioner of State Tax Ors. 2025 (4) TMI 60 - SC ORDER wherein the Hon ble Supreme Court held that Issue notice on the SLP are also on the prayer for interim relief returnable on 7.3.2025. As the matter is pending before the Hon ble Supreme Court the interim order passed in this case would continue to operate and would be governed by the final adjudication of the Hon ble Supreme Court on the issue in the aforesaid Special Leave Petition - petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in the judgment are:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Legality and limitation of Notice in DRC-01 and order in Form DRC-07 under Section 73 of the CGST Act Relevant legal framework and precedents: Section 73 of the CGST Act deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by issuance of a show cause notice and adjudication within a prescribed time limit. The limitation for issuance of such notice and passing of order is a key point of contention. Court's interpretation and reasoning: The Court refrained from expressing any opinion on the legality or limitation of the notice and order under Section 73, as the issue is substantially connected with the validity of the Notifications issued under Section 168-A, which is pending before the Hon'ble Supreme Court. Key evidence and findings: The petitioner challenged the notices and orders as barred by limitation and illegal, but the Court noted that these challenges are intricately linked with the question of whether the time limit for adjudication was validly extended by the impugned Notifications. Application of law to facts: Since the validity of the Notifications is under judicial scrutiny, the Court deferred ruling on the limitation and legality of the notices/orders. Treatment of competing arguments: Arguments regarding limitation and illegality were noted but not adjudicated upon, given the pending Supreme Court proceedings. Conclusion: The Court withheld any decision on this issue pending the Supreme Court's ruling. Issue 2: Validity and vires of Notification Nos. 09/2023 and 56/2023 issued under Section 168-A of the CGST Act Relevant legal framework and precedents: Section 168-A of the CGST Act empowers the Central Government to extend the time limit for issuance of show cause notices and passing of orders under Section 73. The Notifications in question purportedly extend the limitation period for FY 2019-20. Court's interpretation and reasoning: The Court acknowledged that the validity and propriety of these Notifications are already under consideration before the Hon'ble Supreme Court in a Special Leave Petition. The Supreme Court's order dated 21.02.2025 was noted, which specifically addresses the question of whether the time limit for adjudication under Section 73 can be extended by such Notifications. Key evidence and findings: The Supreme Court recognized a divergence of opinion among various High Courts on this issue, indicating its complexity and importance. The Supreme Court issued notices and scheduled further hearing, reflecting the unsettled nature of the law on this point. Application of law to facts: Given the pending Supreme Court adjudication, the High Court exercised judicial discipline by refraining from expressing any opinion on the vires of Section 168-A or the impugned Notifications. Treatment of competing arguments: The Court noted the petitioner's submissions and the existence of conflicting judicial opinions but deferred any determination. Conclusion: The Court declined to adjudicate on the validity of the Notifications and directed that the petition be governed by the Supreme Court's final decision. Issue 3: Stay of coercive action under the impugned proceedings during pendency of the writ petition Relevant legal framework: The petitioner sought a stay on coercive action under the impugned notices and orders pending final adjudication. Court's interpretation and reasoning: The Court noted that an interim order was already in operation and that it would continue to operate until the Supreme Court's final decision. Key evidence and findings: The Court's order explicitly stated that the interim relief granted would be governed by the Supreme Court's final adjudication in the connected Special Leave Petition. Application of law to facts: The Court balanced the interests of the parties by allowing the interim protection to continue, thus preventing any coercive action during the pendency of the higher court's decision. Treatment of competing arguments: The Court did not find it appropriate to alter the interim protection given the ongoing Supreme Court proceedings. Conclusion: The interim stay of coercive action shall continue until the Supreme Court's ruling. 3. SIGNIFICANT HOLDINGS The Court's significant legal determinations include: "Since the issues involved in this petition are already pending consideration before the Hon'ble Supreme Court, therefore, keeping in view the judicial discipline, we refrain ourselves from giving our opinion with respect to either the vires of Section 168-A or aforesaid notifications as assailed in this petition." "We direct that the present petition shall be governed by the judgment passed by the Hon'ble Supreme Court and the decision thereto, shall be binding on this case also." "As the matter is pending before the Hon'ble Supreme Court, the interim order passed in this case, would continue to operate and would be governed by the final adjudication of the Hon'ble Supreme Court on the issue in the aforesaid Special Leave Petition." Core principles established:
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