SEPTEMBER 24, 2024

By G Natarajan, Advocate, G N Law Associates

THE much talked about judgement is out. Please see 2024-TIOL-1596-HC-GUW-GST.

The crux of the judgement is -

- The validity of time extension granted vide Notification 9/2023 Dt. 31.03.2023 has not been considered by the Court as all the impugned orders are passed after the time granted vide this Notification.

- As a consequence, the time extension granted vide Notification 9/2023 Dt. 31.03.2023 is valid, as it was backed by GST council recommendation.

- Notification 56/2023 Dt. 28.12.2023, extending the time limit further is a "colourable legislation" as there was no GST Council recommendation to that effect, though the Notification reads as "as recommended by GST Council".

This is a startling revelation, as to how the bureaucracy can take even the GST council for granted, by issuing a notification purportedly "on the recommendations of the GST Council" when actually there was no such recommendation.

In the absence of GST council recommendation, the existence or otherwise of force majeure conditions were not at all considered by the GST Council.

As a result, as a result the following notices issued / orders passed under Section 73 would be non est.

For the sake of academic interest, whether the force majeure conditions were prevalent while issuing Notifications 9/2023 and 56/2023 or not, the author would like state the following.

The time limit available to the department to issue notices and pass orders under Section 73 of the Act, based on the due date for filing annual returns would be as below.

It is true that on the date of issue of these Notifications, i.e. on 31.03.2023 and 28.12.2023, there was no corona pandemic. But it is a fact that the period from 01.03.2020 to 28.02.2022 was considered as a pandemic period and this period has been excluded by the Hon'ble Supreme Court as well in executive Notifications for computation of various limitation periods. If this period is excluded from the computation of period available for issue of notices and passing of orders under Section 73 (computed based on the due date for filing annual return), the revised time available to the department would be as below.

It may be noted that the time extended by all the notifications issued so far are within the above period, thereby justifying the extension.

Please also note that the extension granted for issuance of orders for period FY 2017-2018 by notification 9/2023-CT ended on 31/12/2023 and was not further extended by notification 56/2023-CT.

In other words, what would be relevant is not whether there was "force majeure" on the date of issue of notifications for extending the time limit, but whether the time lost due to "force majeure" in the past, can be recouped by excluding the time lost in "force majeure" or not.

[The views expressed are strictly personal.]