Sri Sai Steels vs The State Of Ap on 9 January, 2025

Summary of High Court Order: Sri Sai Steels & Others vs. The State of Andhra Pradesh & Others

Date of Order: 9 January, 2025
Court: High Court of Andhra Pradesh
Bench: Hon’ble Chief Justice Dhiraj Singh Thakur & Hon’ble Justice R Raghunandan Rao

1. Outcome

This is an interim order, not a final judgment. The High Court has adjourned the hearing of this batch of writ petitions to 24th April 2025, citing a lack of time ("paucity of time").

Crucially, the Court directed that all interim orders previously granted in these matters (such as stays on tax recovery) shall remain in effect until the next hearing date.

2. Core Issue

The central legal question across this batch of petitions is the validity of the extension of limitation periods for issuing GST assessment orders. Specifically, the petitioners challenge whether the Government had the legal authority under Section 168A of the CGST Act, 2017 to issue notifications extending the deadlines for passing orders under Section 73 of the Act for the financial years 2017-18, 2018-19, and 2019-20.

The core issue is whether the conditions for invoking force majeure under Section 168A were met to justify these extensions for the tax department.

3. Key Facts

• A large group of taxpayers (petitioners) have filed separate writ petitions challenging GST assessment orders and show-cause notices issued by the tax authorities for FY 2017-18, 2018-19, and 2019-20.
• The petitioners contend that these orders/notices are time-barred, as they were issued after the original statutory deadline prescribed under Section 73(10) of the CGST Act.
• The tax authorities rely on various notifications (e.g., Notification No. 9/2023-Central Tax, Notification No. 56/2023-Central Tax, and corresponding State GOs) which extended these deadlines.
• These extension notifications were issued by the Government by invoking its special powers under Section 168A of the CGST Act, citing the COVID-19 pandemic as a force majeure event.
• The petitioners have challenged the legality and constitutionality of these extension notifications themselves, arguing that the power under Section 168A was wrongfully invoked.
• Due to the commonality of the legal issue, the High Court has grouped all these petitions to be heard together.

4. Arguments

(Synthesized from the prayers of the petitioners in the various writ petitions. The respondents' arguments are not detailed in this order.)

Petitioners' Arguments:
* Ultra Vires: The extension notifications are ultra vires (beyond the powers of) Section 168A. This power can only be used to extend time limits for taxpayers due to a force majeure event, not for the tax authorities.
* No Force Majeure: The conditions for invoking force majeure did not exist at the time the notifications were issued, as the COVID-19 pandemic's disruptive effects had largely subsided. Therefore, the extensions were an arbitrary exercise of power.
* Violation of Article 14: The notifications are manifestly arbitrary and violate the right to equality under Article 14 of the Constitution.
* Barred by Limitation: As the notifications are invalid, the original time limits under Section 73(10) apply. Consequently, all assessment orders passed and notices issued after this original deadline are illegal and void for being barred by limitation.
* Other Challenges: Some petitioners have also challenged the constitutional validity of Section 16(2)(c) (denial of ITC if supplier defaults) and Section 16(4) (time limit to claim ITC) of the CGST Act.

5. Court’s Reasoning

The court has not provided any reasoning on the merits of the case in this order. The adjournment was purely procedural, attributed to a "paucity of time." The Court’s decision was limited to postponing the hearing and extending the existing interim reliefs.

6. Statutory References

• Constitution of India:
  • Article 14 (Right to Equality)
  • Article 19(1)(g) (Freedom of trade and profession)
  • Article 226 (Power of High Courts to issue writs)
  • Article 265 (No tax shall be levied or collected except by authority of law)
• CGST Act, 2017 / APGST Act, 2017:
  • Section 16(2)(c): Condition for availing Input Tax Credit (ITC).
  • Section 16(4): Time limit for availing ITC.
  • Section 73: Determination of tax in non-fraud cases.
  • Section 73(10): Original time limit for issuing orders under Section 73.
  • Section 74: Determination of tax in fraud cases.
  • Section 168A: Power of the Government to extend time limits under special circumstances (force majeure).
• 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 order itself does not cite any judicial precedents. However, the text indicates that some petitioners have relied on the following Supreme Court judgment in their pleadings:
* India Cements Ltd. vs. State of Tamil Nadu ((1990) 1 SCC 12) - Cited by some petitioners in relation to the levy of tax on royalty.