The Gauhati High Court ruled that there is no recommendation by GST council for limitation extension allowing the GST department to issue Section 73 notice.
The petitioners have challenged the Notification issued by the respondent thereby extending the limitation under the provisions of Section 168(A) of the Central Goods and Service Tax Act, 2017 as well as the notice under DRC-01 issued by the respondent under Section 73 of the CGST Act of 2017 for the period 2019-20 along with attachment to DRC 01.
The case of the petitioner is that the Notification which was issued being Notification is ultra vires to the provisions of Section 168A of the CGST Act of 2017 inasmuch as, the said Notification has been issued without taking the recommendation from the GST Council, which is otherwise, a mandatory condition. In addition to that, the counsel appearing on behalf of the petitioners submitted that the powers under Section 168A can only be exercised in the circumstance, there is a force majeure.
Counsel for the petitioners submitted that the reasons why the respondent authorities have sought for extension is very well spelt out and it would be seen that the reason for such extension is that they do not have adequate staff to complete the audit, assessment etc.
Counsel submitted that not having the officer and staff to complete the assessment and/or audit under no circumstances can be said to be a force majeure.
He submitted that in terms with the mandates of the Section 73 (2), the said notice has to be issued three months prior to the passing of an order under Section 73(9) of the CGST Act of 2017.
The court opined that the matter as to whether there was a force majeure and what were the circumstances, under which the provisions of Section 168A was invoked would require a determination and the same can be done on the basis of an affidavit to be filed by the respondent authorities.
The court said that the materials on record prima facie show that there was no recommendation made by the GST Council before issuance of the Notification.
The Court directed the respondent authorities not to take any coercive action against the petitioner in respect to the notice. It was also made clear that during the subsistence of the order, the respondent authorities can pass the order under Section 73(9) of the CGST Act of 2017. However, no coercive actions be taken on such order.
Case Details
Case Name: M/S Nitai Kangsa Banik And Anr V/S The Union Of India And 3 Ors.
Citation: WP(C)/3877/2024
Court: Gauhati High Court
Judge: Justice Devashis Baruah
Decision Date: 02/08/2024
