Bhavani Furnitures vs Assistant Commissioner on 3 July, 2025

1. Outcome

This is not a final judgment but an interim procedural order. The High Court of Andhra Pradesh has:
1. Adjourned the batch of writ petitions for the next hearing on 31.07.2025.
2. Directed that all interim orders granted previously in these matters shall continue to remain in effect until the next date of hearing. This implies that any stay on recovery proceedings pursuant to the impugned assessment orders will continue.

2. Core Issue

The central legal question before the court in this batch of petitions is:

• Whether the Central and State Governments' notifications (notably Notification Nos. 09/2023-Central Tax and 56/2023-Central Tax and corresponding State G.O.s) extending the statutory time limits for issuing adjudication orders under Section 73(10) of the GST Acts for the financial years 2017-18, 2018-19, and 2019-20 are legally valid.
• Specifically, the petitioners challenge whether these extensions are ultra vires (beyond the legal power) of Section 168-A of the CGST Act, 2017, which grants the power to extend timelines only under special circumstances like force majeure.
• Consequently, the court will decide if the assessment orders passed against the petitioners, relying on these extended timelines, are barred by limitation and are therefore legally void.

3. Key Facts

This summary is based on the case of Bhavani Furnitures (W.P. No. 22694 of 2024), which was heard along with a large batch of similar petitions.

• The petitioner, Bhavani Furnitures, received an assessment order dated 30.08.2024 from the Assistant Commissioner (State Tax) for the financial year 2019-20.
• This order was issued after the original statutory deadline prescribed under Section 73(10) of the GST Act had expired.
• The tax authority relied on Notification No. 56/2023-Central Tax and the corresponding State G.O. Ms. No. 2, which extended the deadline for issuing such orders. These notifications were issued under the powers granted by Section 168-A of the GST Acts.
• Bhavani Furnitures, along with numerous other taxpayers facing similar orders for different financial years (2017-18, 2018-19, and 2019-20), filed writ petitions challenging the constitutional and legal validity of these extension notifications and the assessment orders passed in reliance upon them.

4. Arguments

Petitioners' Arguments:
* Ultra Vires: The notifications extending the limitation period are an invalid exercise of power under Section 168-A. This section is intended for force majeure events (like pandemics, floods, war) that prevent taxpayers from complying with the law, not to grant the government more time to complete its own assessments.
* No Justification: There was no prevailing force majeure situation in 2023 or 2024 that warranted such a broad extension of deadlines for assessment activities related to past financial years. The use of COVID-19 as a justification is no longer tenable.
* Arbitrariness: The repeated extensions are manifestly arbitrary, unreasonable, and violate Article 14 of the Constitution by creating prolonged uncertainty for businesses.
* Time-Barred Orders: As the notifications are illegal, the assessment orders issued after the original deadline under Section 73(10) are barred by limitation and hence, are non-est (non-existent) in the eyes of the law.

Respondents' (Tax Authorities) Implicit Stance:
* The notifications were validly issued under Section 168-A, based on the recommendations of the GST Council, to address administrative difficulties and disruptions caused by the COVID-19 pandemic.
* The power under Section 168-A is wide enough to cover extensions of time for actions to be completed by tax authorities.
* Therefore, the assessment orders are within the legally extended period and are valid.

5. Court’s Reasoning

The court has not provided any reasoning on the merits of the arguments in this order. The order is purely procedural, indicating that the matter requires detailed consideration. The continuation of the interim stay suggests that the court finds a prima facie case in favour of the petitioners, warranting a detailed hearing before any coercive recovery action is taken by the tax authorities.

6. Statutory References

• Constitution of India: Articles 14, 19(1)(g), 226, 265, and 300-A.
• CGST Act, 2017 & corresponding SGST Acts:
  • Section 73: Determination of tax in non-fraud cases.
  • Section 73(10): Original time limit for issuing the order.
  • Section 74: Determination of tax in fraud cases.
  • Section 168-A: Power of the Government to extend time limits in special circumstances.
  • Section 16(2) & 16(4): (Challenged in some petitions) Conditions for and time limit to claim Input Tax Credit.
• Notifications Challenged:
  • Notification No. 09/2023-Central Tax, dated 31.03.2023
  • Notification No. 56/2023-Central Tax, dated 28.12.2023
• State Government Orders Challenged:
  • G.O. Ms. No. 221, dated 17.05.2023
  • G.O. Ms. No. 2, dated 03.01.2024

7. Precedents Cited

The petitioners in some of the connected writ petitions have cited the following precedent:
* India Cements Ltd. vs. Collector of Central Excise, (1990) 1 SCC 12, likely in relation to general principles of taxation and statutory interpretation.