9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (5) TMI 1112 - HC - GSTVires of Notification No. 09/2023-Central Tax dated 31st March 2023 - HELD THAT - This Court had the opportunity to hear a batch of petitions wherein inter alia the impugned notification had been challenged. The DJST Traders Private Limited v. Union of India Ors. 2025 (5) TMI 43 - DELHI HIGH COURT is the lead matter in the said batch of petitions. In the said petition on 22nd April 2025 the parties were heard at length qua the validity of the impugned notifications and accordingly it was held that Broadly there are six categories of cases which are pending before this Court. While the issue concerning the validity of the impugned notifications is presently under consideration before the Supreme Court this Court is of the prima facie view that depending upon the categories of petitions orders can be passed affording an opportunity to the Petitioners to place their stand before the adjudicating authority. In some cases proceedings including appellate remedies may be permitted to be pursued by the Petitioners without delving into the question of the validity of the said notifications at this stage. Thereafter on 23rd April 2025 this Court having noted that the validity of the impugned notifications is under consideration before the Supreme Court had disposed of several matters in the said batch of petitions after addressing other factual issues raised in the respective petitions. Additionally while disposing of the said petitions this Court clearly observed that the validity of the impugned notifications therein shall be subject to the outcome of the proceedings before the Supreme Court. Petition disposed off.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of the Impugned Notification No. 09/2023-Central Tax Relevant Legal Framework and Precedents: The issuance of notifications extending time limits for adjudication under the GST Act is governed by Section 168A of the GST Act, which requires prior recommendation of the GST Council before such notifications are issued. Multiple High Courts, including Allahabad and Patna, have upheld the validity of Notification No. 9, whereas the Guwahati High Court has quashed Notification No. 56 of 2023 (Central Tax). Court's Interpretation and Reasoning: The Court acknowledged the conflicting judicial opinions on the validity of the impugned notifications. It noted that the impugned Notification No. 9 was issued following a prior recommendation of the GST Council, thus prima facie complying with the statutory mandate under Section 168A. However, the Court refrained from conclusively adjudicating on the validity of the notification, given the ongoing proceedings before the Supreme Court in S.L.P No. 4240/2025, which directly addresses these issues. Application of Law to Facts: The Court observed that the impugned notification's issuance procedure aligns with the statutory requirements, but final determination is deferred pending Supreme Court's ruling. The Court emphasized judicial discipline and the need for uniformity in law, thus refraining from issuing an independent ruling that may conflict with the Supreme Court's eventual decision. Issue 2: Compliance with Section 168A of the GST Act Regarding Extension of Time Limits Relevant Legal Framework and Precedents: Section 168A mandates that any extension of time limits for adjudication of show cause notices and passing of orders must be preceded by a recommendation from the GST Council. The issue has been subject to divergent views by various High Courts, and the Supreme Court has issued notice and interim orders in the matter. Court's Interpretation and Reasoning: The Court recognized that while Notification No. 9 was issued following the GST Council's recommendation, Notification No. 56 was challenged on the ground that the extension was granted contrary to the statutory mandate, with ratification occurring post issuance. The Court noted that the Supreme Court's intervention is awaited to resolve these conflicting interpretations. Treatment of Competing Arguments: The Court acknowledged the petitioners' arguments challenging the procedural validity of the notifications and the respondents' defense of compliance with statutory requirements. Given the conflicting High Court decisions and ongoing Supreme Court proceedings, the Court adopted a cautious approach, refraining from adjudicating the validity but allowing procedural relief where appropriate. Issue 3: Extension of Time Limits for Adjudication under GST Act for FY 2019-2020 Relevant Legal Framework and Precedents: The time limits for adjudication under Section 73 of the GST Act and corresponding State GST Acts are prescribed by statute. The impugned notifications purportedly extend these limits. Court's Interpretation and Reasoning: The Court noted that the extension of time limits is the subject matter of the Supreme Court's pending adjudication. The Court did not express a final view on the legality of such extensions but observed that the matter involves significant questions of law requiring authoritative resolution. Application of Law to Facts: The Court observed that the extensions have led to ex-parte adjudications and imposition of demands and penalties, often without adequate opportunity to the affected parties. The Court indicated that procedural fairness must be ensured in ongoing proceedings, notwithstanding the pending validity challenge. Issue 4: Impact of Conflicting Judicial Pronouncements and Pending Supreme Court Proceedings Relevant Legal Framework and Precedents: Various High Courts have taken divergent views on the validity of the impugned notifications. The Supreme Court has admitted the Special Leave Petition (SLP) and issued interim orders, highlighting the cleavage of opinion. Court's Interpretation and Reasoning: The Court emphasized judicial discipline and the principle of comity by deferring to the Supreme Court's forthcoming ruling. It noted the Punjab and Haryana High Court's approach of refraining from expressing opinions on the vires of Section 168A and related notifications, instead directing that pending cases be governed by the Supreme Court's decision. Application of Law to Facts: The Court disposed of several petitions in the batch, subject to the outcome of the Supreme Court proceedings, thus ensuring consistency and avoiding conflicting judgments. Issue 5: Procedural Fairness in Adjudication Proceedings Affected by the Impugned Notifications Court's Interpretation and Reasoning: The Court noted submissions that many petitioners had been unable to file replies or avail personal hearings, leading to ex-parte orders and imposition of substantial demands and penalties. Recognizing the potential prejudice, the Court indicated a prima facie view that procedural relief should be granted to allow affected parties to place their case before the adjudicating authorities and pursue appellate remedies. Application of Law to Facts: The Court proposed categorizing the petitions and affording appropriate procedural opportunities without delving into the merits of the notifications' validity at this stage. This approach balances the need for procedural fairness with judicial restraint pending final adjudication. 3. SIGNIFICANT HOLDINGS The Court held that: "The validity of the impugned notifications shall be subject to the outcome of the proceedings before the Supreme Court in S.L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors." The Court established the principle that in the presence of conflicting High Court decisions and pending Supreme Court adjudication on the validity of statutory notifications, lower courts must exercise judicial discipline by refraining from independent rulings on the vires of such notifications and instead await the apex court's determination. Further, the Court underscored the necessity of ensuring procedural fairness in tax adjudication proceedings, particularly where ex-parte orders have been passed due to inability of parties to participate effectively. It indicated that procedural relief in the form of opportunity to file replies, avail hearings, and pursue appellate remedies should be granted irrespective of the validity challenge to the notifications. Finally, the Court disposed of the present petition in view of the appeal preferred against the impugned order and clarified that no further orders were necessary at this stage, leaving the issue of the notifications' validity open for determination by the Supreme Court.
|
