Shaketh Enterprises vs Assistant Commissioner Central Tax on 9 January, 2025

1. Outcome

This is a procedural order, not a final judgment. The High Court has adjourned the hearing for this batch of writ petitions to April 24, 2025. All interim orders previously granted (e.g., stay on recovery of tax demand) have been extended until the next hearing date. The core legal issues remain undecided.

2. Core Issue

The central legal question is whether the Central and State Governments have the authority under Section 168-A of the CGST/SGST Acts, 2017 to extend the statutory time limits for completing assessment proceedings under Section 73.

Specifically, the petitioners challenge the validity of notifications (like Notification No. 9/2023-Central Tax and No. 56/2023-Central Tax) which extended the deadlines for issuing orders for the financial years 2017-18, 2018-19, and 2019-20, arguing that the conditions required for invoking force majeure under Section 168-A were not met.

3. Key Facts

• A large number of taxpayers (the petitioners) filed writ petitions challenging the assessment orders and show-cause notices issued by the GST authorities for various financial years (primarily 2017-18, 2018-19, and 2019-20).
• These orders/notices were issued after the original statutory deadline prescribed under Section 73(10) of the CGST Act.
• The GST department justified the delay by relying on notifications issued by the government, which extended the time limits by invoking special powers under Section 168-A of the CGST Act, citing the COVID-19 pandemic as a force majeure event.
• The petitioners have challenged the legality of these extension notifications and, consequently, the validity of the assessment proceedings initiated against them.
• The Andhra Pradesh High Court heard this batch of petitions on January 9, 2025, and passed a procedural order to adjourn the hearing.

4. Arguments

Petitioners' Arguments:

• Ultra Vires: The notifications extending the time limits are ultra vires (beyond the powers of) Section 168-A. This section can only be invoked in exceptional force majeure situations where the government is demonstrably unable to perform its functions. The petitioners argue that the GST authorities were functional and that a blanket extension, long after the pandemic's peak, was not justified.
• Time-Barred Proceedings: Since the extension notifications are illegal, the assessment orders and show-cause notices issued after the original deadlines are barred by limitation and are therefore null and void.
• Violation of Fundamental Rights: The arbitrary extension of limitation violates their rights under Article 14 (Right to Equality) of the Constitution of India.
• Additional Grounds (in some petitions): Some petitioners also challenged the constitutionality of Section 16(2)(c) (linking ITC to supplier's tax payment) and Section 16(4) (time limit to claim ITC) of the CGST Act.

(Note: The Respondents' arguments are not detailed in this procedural order.)

5. Court’s Reasoning

The court has not provided any reasoning on the merits of the case in this order. The adjournment was solely due to a "paucity of time." The order is purely procedural and does not contain any analysis of the legal arguments presented.

6. Statutory References

• Central Goods and Services Tax Act, 2017 (CGST Act):
  • Section 73(10): Prescribes the time limit for issuing an order for determination of tax not paid or short paid without fraud or wilful misstatement.
  • Section 168-A: Grants the government power to extend time limits in special circumstances like force majeure.
  • Section 16(2)(c) & 16(4): Pertain to conditions and time limits for availing Input Tax Credit (ITC).
• Constitution of India:
  • Article 14: Right to Equality.
  • Article 226: Power of High Courts to issue writs.
• 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 GOs (e.g., G.O. Ms. No. 221, dated 17.05.2023).

7. Precedents Cited

The provided text, being a procedural order, does not contain any precedents cited by the Court. However, in some of the connected writ petitions, the petitioners have made a reference to the law laid down by the Supreme Court in:
* India Cements Ltd. vs. Collector of Central Excise (1990) 1 SCC 12.