Vivek Enterprises vs Union Of India on 3 July, 2025

reliminary Note: The provided text is not a final judgment but a procedural interim order** from a hearing on July 3, 2025. It records the adjournment of a batch of similar writ petitions and the continuation of prior interim relief. The summary below is based on the information available from the prayers and details of the clubbed petitions.

1. Outcome

The High Court has adjourned the hearing to July 31, 2025. It has not delivered a final judgment on the merits of the case. The key outcome of this specific hearing is the direction that all previously granted interim orders (presumably staying the recovery of disputed tax, interest, and penalty) shall continue to remain in effect until the next date of hearing.

2. Core Issue

The central legal question before the High Court is the constitutional and statutory validity of extending the time limits for issuing adjudication orders for the financial years 2017-18, 2018-19, and 2019-20 under the CGST/SGST Acts.

Specifically, the Court will determine:
* Whether the Government's power under Section 168-A of the CGST Act, 2017, can be invoked to grant a blanket extension of limitation periods for completing assessments, long after the initial disruption caused by the COVID-19 pandemic.
* Whether Notification No. 9/2023-Central Tax and Notification No. 56/2023-Central Tax (and corresponding State Government notifications) are ultra vires Section 168-A and arbitrary, thereby violating Article 14 of the Constitution.
* Consequently, whether the assessment orders and show-cause notices issued by tax authorities, relying on these extended timelines, are barred by limitation and thus legally invalid.

3. Key Facts

• A large number of taxpayers (the petitioners in this batch of cases) were issued Show Cause Notices and/or Assessment Orders demanding tax, interest, and penalties under Section 73 (non-fraud cases) or Section 74 (fraud cases) of the CGST/SGST Acts.
• These notices and orders were for the financial years 2017-18, 2018-19, and 2019-20.
• The original deadline for issuing orders for these periods under Section 73(10) had passed.
• The tax authorities issued these orders by relying on extensions granted by the Central and State Governments through various notifications (notably 9/2023 and 56/2023), which were issued by invoking powers under Section 168-A of the GST Acts.
• The petitioners have collectively challenged the legality of these notifications and the consequential demand orders, arguing they are time-barred.

4. Arguments

(Based on the prayers listed in the various petitions)

Petitioners' Arguments:
* Ultra Vires: The notifications extending the time limit are beyond the powers (ultra vires) granted by Section 168-A. This section is an exceptional provision intended for genuine force majeure events like war, epidemic, flood, etc., that make compliance impossible. A general administrative delay cannot be a ground for invoking this section repeatedly.
* Arbitrariness (Violation of Article 14): The extensions are manifestly arbitrary, providing an indefinite timeframe to the tax authorities, which subjects taxpayers to prolonged uncertainty and violates the principle of finality in tax proceedings.
* Barred by Limitation: Since the underlying notifications providing the extension are illegal, the assessment orders passed after the original statutory deadline under Section 73(10) are barred by limitation and are therefore void ab initio.
* Other Grounds (in specific petitions): Some petitions have also challenged the constitutional validity of Section 16(2)(c) (tax payment by supplier for recipient's ITC eligibility) and Section 16(4) (time limit for claiming ITC) of the CGST Act.

Respondents' (Government/Tax Department's) Likely Arguments:
* The extensions were necessary due to the cascading effects and administrative disruptions caused by the COVID-19 pandemic, which qualifies as a force majeure event.
* The notifications were issued on the recommendation of the GST Council and are a valid exercise of the delegated legislative power under Section 168-A.
* The extensions were a policy decision to ensure that revenue is not lost due to procedural time limits expiring while the tax administration was recovering from the pandemic's impact.

5. Court’s Reasoning

The provided text is a procedural order and does not contain any reasoning on the merits of the case. The Court has not analyzed the arguments presented by either side. The decision to continue the interim orders implies that the Court considers the petitioners' arguments to be prima facie tenable and requiring detailed consideration, thereby warranting protection against coercive recovery actions until the matter is finally decided.

6. Statutory References

• Central Goods and Services Tax Act, 2017 (CGST Act):
  • Section 73: Determination of tax not paid or short paid for reasons other than fraud.
  • Section 73(10): Prescribes the original time limit for issuing an order.
  • Section 74: Determination of tax in cases of fraud, willful misstatement, or suppression of facts.
  • Section 168-A: Power of Government to extend time limits in special circumstances (force majeure).
  • Section 16(2) & 16(4): Conditions for and time limit for taking Input Tax Credit (challenged in some petitions).
• Andhra Pradesh Goods and Services Tax Act, 2017 (APGST Act): Corresponding sections to the CGST Act.
• Constitution of India:
  • Article 14: Right to equality.
  • Article 19(1)(g): Right to practice any profession, or to carry on any occupation, trade or business.
  • Article 226: Power of High Courts to issue certain writs.
  • Article 265: No tax shall be levied or collected except by authority of law.
• Impugned Notifications:
  • Notification No. 09/2023-Central Tax, dated 31.03.2023.
  • Notification No. 56/2023-Central Tax, dated 28.12.2023.
  • Corresponding State Government Orders (G.O.s).

7. Precedents Cited

The text explicitly mentions one precedent cited in some of the petitions:
* India Cements Ltd. vs. State of Tamil Nadu ((1990) 1 SCC 12): This Supreme Court judgment is typically cited in cases concerning the taxability of royalty on minerals, suggesting that some petitions involved this issue in addition to the primary challenge of limitation.