M/S. Sri Sai Steels vs The State Of Andhra Pradesh, on 9 January, 2025

Summary of High Court Order

Case Title: M/S. Sri Sai Steels vs The State Of Andhra Pradesh (Lead Petition: WP No. 12580 of 2024, along with a batch of similar petitions)
Date of Order: 9 January, 2025
Court: High Court of Andhra Pradesh
Bench: The Hon’ble Sri Dhiraj Singh Thakur, The Chief Justice and The Hon’ble Sri Justice R Raghunandan Rao

1. Outcome

This is an interim procedural order, not a final judgment on the merits of the case.

The Court adjourned the hearing for this batch of writ petitions to 24th April, 2025, due to a lack of time. It directed that any interim orders previously granted in these matters shall continue to remain in effect until the next hearing date.

2. Core Issue

The central legal question across this batch of petitions is the constitutional and statutory validity of notifications issued under Section 168-A of the CGST/SGST Acts, 2017.

These notifications extended the statutory time limits for the tax authorities to issue assessment orders under Section 73 of the Acts for the financial years 2017-18, 2018-19, and 2019-20. The petitioners contend that these extensions are illegal, rendering the subsequent assessment orders time-barred and void.

3. Key Facts

• The petitioners are various taxpayers registered under the GST regime in Andhra Pradesh.
• The GST authorities initiated assessment proceedings against them under Section 73 (for non-fraud cases) for past financial years.
• The original statutory deadline for issuing assessment orders under Section 73(10) was approaching for these years.
• The Central and State governments, invoking their powers under Section 168-A, issued notifications (e.g., Notification No. 9/2023-Central Tax and No. 56/2023-Central Tax) to extend these deadlines, citing the COVID-19 pandemic as a force majeure event.
• Relying on these extended timelines, the tax authorities issued show-cause notices and passed final assessment orders demanding tax, interest, and penalties.
• The petitioners filed writ petitions challenging the legality of the time-limit extensions and the consequential assessment orders, arguing they were issued after the original limitation period had expired.

4. Arguments

Petitioners' Arguments (as inferred from the prayers):
* Ultra Vires: The notifications extending the limitation period are ultra vires (beyond the powers of) Section 168-A. This section can only be invoked in special circumstances like a force majeure event. The petitioners implicitly argue that the conditions for invoking this power, such as the continued impact of the COVID-19 pandemic, did not exist when the notifications were issued in 2023.
* Arbitrariness: The extensions are manifestly arbitrary and violate Article 14 of the Constitution of India, which guarantees the right to equality.
* Time-Barred Assessments: As the notifications are illegal, the assessment orders passed during the extended period are barred by limitation and are therefore non-est (do not exist) in the eyes of the law.
* Other Constitutional Challenges: Some petitioners have also challenged the validity of Section 16(4) (time limit for claiming Input Tax Credit) and Section 16(2)(c) (linking ITC entitlement to the supplier's payment of tax) as being arbitrary and unconstitutional.

Respondents' Arguments (Government/Tax Department):
(Note: These are not detailed in the order but represent the standard government position in such matters.)
* The notifications were validly issued under the powers granted by Section 168-A of the GST Acts.
* The extension was necessary due to the administrative and systemic disruptions caused by the COVID-19 pandemic, which qualifies as a force majeure event.
* The extensions were based on recommendations from the GST Council.
* Therefore, the assessment orders passed within the extended timeframe are legally valid and not barred by time.

5. Court’s Reasoning

The Court did not provide any reasoning on the merits of the case. The order is purely procedural, and the adjournment was granted for a single stated reason: "Due to paucity of time." The court has yet to hear detailed arguments and adjudicate on the legal issues raised.

6. Statutory References

• 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 300-A (Persons not to be deprived of property save by authority of law)
• CGST Act, 2017 & APGST Act, 2017:
  • Section 16(2)(c): Condition for availing Input Tax Credit (ITC) that tax charged has been paid by the supplier.
  • Section 16(4): Time limit for availing ITC.
  • Section 73: Determination of tax in non-fraud cases.
  • Section 73(10): Time limit for issuance of an order under Section 73.
  • Section 74: Determination of tax in fraud cases.
  • Section 168-A: Power of the Government to extend time limits in special circumstances (force majeure).
• Impugned Notifications:
  • Notification No. 9/2023-Central Tax, dated 31.03.2023
  • Notification No. 56/2023-Central Tax, dated 28.12.2023
  • G.O. Ms. No. 221 (Andhra Pradesh), dated 17.05.2023

7. Precedents Cited

• India Cements Ltd. vs. Collector of Central Excise [(1990) 1 SCC 12] was cited by some petitioners, likely in the context of principles of taxation or statutory interpretation.