9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (5) TMI 1199 - HC - GSTExtension of time limits for adjudication of show cause notices - Validity of Section 16 (2) (c) of the Central Goods and Service Tax Act 2017 ( CGST Act ) and Notification 56/2023-Central Tax - procedural requirements under Section 168A of the CGST Act for issuance of SCN - Challenge to SCN and impugned order - HELD THAT - Considering the present writ petition has been pending before this Court for several months it is made clear that the Appellate Authority shall not dismiss the appeal on the ground of limitation and adjudicate the same on merits. All the rights and remedies of the parties are left open. Access to the GST Portal if not already available shall be ensured to be provided to the Petitioner to enable access to the notices and related documents. However it is clarified that the issues in respect of the validity of (i) the impugned notification and (ii) Section 16 (2) (c) of CGST Act are left open and the order of the Appellate Authority shall be subject to the outcome of the decision of the Supreme Court in M/s HCC- Ors 2025 (4) TMI 60 - SC ORDER ; and in Bharti Telemedia v. Union of India Ors. The petition is disposed of in these terms.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court include:
2. ISSUE-WISE DETAILED ANALYSIS Validity of Notification No. 56/2023-Central Tax and Compliance with Section 168A of the CGST Act The legal framework governing the issuance of notifications extending time limits for adjudication under the CGST Act is Section 168A, which mandates prior recommendation of the GST Council before such notifications can be validly issued. Several High Courts have taken divergent views on this issue: the Allahabad and Patna High Courts upheld the validity of Notification No. 56/2023, whereas the Guwahati High Court quashed it. The Telangana High Court observed invalidity but did not conclusively decide the issue. The Supreme Court has admitted a Special Leave Petition (SLP No. 4240/2025) to resolve this cleavage of opinion. The Court noted that the impugned notification was challenged on the ground that it was issued without prior GST Council recommendation, and ratification was given only after issuance, contrary to the statutory mandate. The notification itself incorrectly stated that it was issued on the GST Council's recommendation. Given the conflicting judicial precedents and the pendency of the matter before the Supreme Court, the Court refrained from expressing any opinion on the validity of the notification and observed that the outcome of the Supreme Court proceedings would be binding. Validity of Section 16(2)(c) of the CGST Act The challenge to Section 16(2)(c) of the CGST Act was also raised but is pending adjudication before the Court in a separate batch of matters (lead matter W.P.(C) 6293/2019). The Court accordingly refrained from deciding this issue in the present petition and left it open for determination in the separate proceedings. Legality and Procedural Fairness of the Show Cause Notice and Adjudication Order The petitioner challenged the impugned Show Cause Notice dated 29th May, 2024 and the order dated 28th August, 2024, contending that the adjudication was conducted ex-parte due to inability to file replies or avail personal hearings. This resulted in substantial demands and penalties being imposed without adequate opportunity to defend. The Court observed that even if the impugned notifications are upheld, relief could still be granted by permitting the petitioners to place their case before the adjudicating authority. It recognized six categories of cases pending before it and indicated that orders could be passed affording an opportunity to the petitioners to present their stand, including pursuing appellate remedies. In the present case, the petitioner had already filed an appeal under Section 107 of the CGST Act against the impugned order after paying the prescribed pre-deposit. The Court held that since the appeal was pending, interference with the impugned order at this stage was unwarranted. Importantly, the Court directed that the appellate authority should not dismiss the appeal on limitation grounds and must adjudicate on merits. It also mandated that access to the GST Portal be ensured to the petitioner for accessing notices and related documents, thereby safeguarding procedural fairness. Interim Orders and Judicial Discipline Pending Supreme Court Decision The Court referred to interim orders passed by other High Courts, including Punjab and Haryana High Court, which had disposed of connected writ petitions subject to the final decision of the Supreme Court in the SLP concerning the notifications. The Court emphasized judicial discipline in refraining from expressing views on the vires of Section 168A and the impugned notifications while the Supreme Court's decision was awaited. Application of Law to Facts and Treatment of Competing Arguments The Court carefully balanced the competing interests: the statutory requirement for GST Council recommendation before issuing notifications extending limitation periods; the need for procedural fairness in adjudication; and the practical realities of pending appeals and ongoing litigation. While acknowledging the serious challenges to the validity of the impugned notification and Section 16(2)(c), the Court declined to decide these issues prematurely due to their pendency before higher forums. Instead, it focused on ensuring that petitioners were not prejudiced by procedural lapses and had access to appellate remedies. 3. SIGNIFICANT HOLDINGS The Court held that:
The Court established the core principle that where fundamental questions of statutory validity are pending before the Supreme Court, subordinate courts should exercise restraint and avoid premature adjudication, while ensuring procedural fairness and protection of parties' rights through available appellate mechanisms. Further, the Court underscored the requirement that notifications extending limitation periods under the CGST Act must comply with the procedural mandate of prior GST Council recommendation under Section 168A, a question now pending final determination by the Supreme Court.
|
