The Bombay High Court has granted the interim stay on the Garnishee Notice issued citing the CBIC Notification No. 56/2023-Central Tax dated 28th December 2023 which extended the time limit for issuance of show cause notice (SCN) and order.
The bench of Justice B. P. Colabawalla and Justice Firdosh P. Pooniwalla has observed that the issues raised in the Writ Petition are pending adjudication in several other Writ Petitions, including Writ Petition No.5146 of 2024 and Writ Petition No. 5471 of 2024. The Gauhati High Court has in fact already struck down these CBIC Notifications. Though on this issue, the Telangana High Court has held in favour of the Petitioner before it, the Telangana High Court came to the conclusion that because of the order of the Hon’ble Supreme Court in “Re-Cognizance for extension of limitation in (2022) (1) TMI 385-SC ORDER”, the assessment was not time barred.
The bench noted that the order of the Telangana High Court has been challenged before the Supreme Court, and which is pending adjudication. Once these are the facts, we are of the opinion that the Petitioner has not only made out a case for admission but also for grant of interim relief.
The Petitioner challenged the Garnishee Notice in Form DRC-13 dated 14th February 2025 issued by the State Tax Officer, Thane Division, Thane (Respondent No.3) instructing Respondent Bank to pay over a sum of Rs. 2,18,77,406/- to the Government for the tax payable by the Petitioner under the GST Act.
A challenge is also laid to the orde issued by Respondent demanding the aforesaid amount from the Petitioner.
Before issuance of the order, a Show Cause Notice was also issued, which is challenged in the Writ Petition.
Over and above, the challenge to the Garnishee Notice, the Show Cause Notice, and the order, a challenge is also laid to Notification No. 56/2023-Central Tax dated 28th December 2023 and Notification No. 56/2023-State Tax, No. MGST-1524/C. R.6/Taxation-1 dated 16th January 2024 issued under Section 168A of the Central Goods and Services Tax Act, 2017 read with Section 168A of the Maharashtra Goods and Services Tax Act, 2017.
The CBIC vide Notification No. 56/2023-Central Tax dated 28.12.2023, notifies for extending the time limit specified u/s 73(10) for issuance of Order u/s 73(9) for recovery tax short paid or not paid or ITC wrongly availed or utilised for any reason other than fraud or any wilful- misstatement or suppression of facts.
The extension specifically relates to the issuance of orders under Section 73(9) of the CGST Act pertaining to the financial years 2018-19 and 2019-20 as under: FY 2018-19 , Up to 30th April, 2024 and lFY 2019-20, Up to 31st August, 2024
In the Petition, several grounds are canvassed challenging the impugned order, the impugned Garnishee Notice, as well as the Show Cause Notice. One of the grounds canvassed is that the Show Cause Notice was never served upon the Petitioner, and hence, there has been a breach of the principles of natural justice which itself makes the impugned order vulnerable to challenge. If the order goes, naturally the Garnishee Notice cannot stand and would also have to be set aside.
The petitioner contended that order ought to have been passed by 31st March 2024. However, the order has been passed on 13th August 2024 on the strength of the Notifications dated 28th December 2023 and 16th January 2024 referred to by us above. It is the case of the Petitioner that these Notifications are ultra vires Section 168A of the CGST Act and the MGST Act because these Notifications have not been issued on the recommendation of the GST Council, and which is one of the mandatory requirements of Section 168A. If these Notifications are set aside, then, in any event, the order cannot stand as the same would be time barred, was the submission.
The department contended that Section 168A was brought into force by virtue of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. S
The department contended that section 168A was enacted specifically to deal with cases like wars and pandemics etc, and which would include the Covid- 19 Pandemic. She submitted that once this is the provision, and the fact that the Covid-19 Pandemic would be a force majeure event [as contemplated under Section 168A], no exception can be taken to the issuance of the said Notifications.
The department contended that as far as the question whether the Notifications have been issued on the recommendation of the GST Council, the learned AGP submitted that she is not in a position to state whether in fact the two subsequent Notifications dated 28th December 2023 and 16th January 2024 were issued on the recommendation of the GST Council, or otherwise.
The court held that a strong prima facie case is made out for granting interim relief to the Petitioner.
Case Details
Case Title: NTT Data Business Solutions Pvt Ltd Versus Union of India
Case No.: Writ Petition No. 2616 Of 2025
Date: March 3, 2025
Counsel For Petitioner: Bharat Raichandani
Counsel For Respondent: S. D. Vyas, Addl. G.P.
Read More: Direct Tax Weekly Flashback: 2 March to 8 March 2025
