M/S. Priyanka Traders vs Assistant Commissionerst on 9 January, 2025

Summary of High Court Order

Case: M/S. Priyanka Traders vs Assistant Commissionerst & other connected matters (Writ Petition No. 16871 of 2024 and a batch of similar petitions)
Court: High Court of Andhra Pradesh
Date of Order: January 9, 2025
Coram: The Hon’ble Chief Justice Dhiraj Singh Thakur and The Hon’ble Sri Justice R Raghunandan Rao

1. Outcome

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

• Adjournment: The hearing for this batch of writ petitions has been adjourned to April 24, 2025, due to a lack of time.
• Continuation of Interim Orders: All interim orders (such as stays on recovery proceedings) granted earlier in these matters will continue to be in effect until the next date of hearing. The cases remain pending before the High Court.

2. Core Issue

The central legal question across all petitions is the validity of the government's extension of the statutory time limits for issuing GST assessment orders for the financial years 2017-18, 2018-19, and 2019-20.

The key issues are:
* Whether the Central and State Governments' notifications extending the limitation period under Section 168A of the CGST/APGST Act, 2017 are legally valid (intra vires) or an unconstitutional and arbitrary exercise of power.
* Consequently, whether the show-cause notices and assessment orders issued by the GST authorities, relying on these extended deadlines, are barred by limitation and therefore void and without jurisdiction.

3. Key Facts

• A large number of taxpayers (the petitioners) filed separate writ petitions challenging assessment orders or show-cause notices issued for various financial years (primarily FY 2017-18, 2018-19, and 2019-20).
• The Government, invoking its powers under Section 168A (the force majeure clause), issued notifications (e.g., No. 09/2023 and 56/2023) extending the original three-year deadline under Section 73(10) for issuing such orders, citing disruptions caused by the COVID-19 pandemic.
• The tax authorities issued demand-cum-show cause notices and passed final assessment orders against the petitioners within these extended timelines.
• The petitioners have challenged the legality of the notifications themselves and, as a consequence, the validity of the departmental actions taken against them.

4. Arguments

Petitioners' Arguments (as inferred from the prayers):
1. Ultra Vires: The notifications extending the time limits are ultra vires Section 168A. The power under this section is meant for situations where compliance is impossible due to an ongoing force majeure event, not for granting extensions long after the COVID-19 pandemic's peak disruptions have ended.
2. Arbitrariness: The repeated extensions are manifestly arbitrary, a colourable exercise of power, and violate the right to equality under Article 14 of the Constitution.
3. Time-Barred Assessments: Since the notifications are illegal, the original time limits prescribed under Section 73(10) of the CGST Act apply. Therefore, the assessment orders and notices issued after the original deadline are barred by limitation and legally invalid.
4. Other Challenges: Some petitions also challenge the constitutionality of Section 16(2)(c) (denial of ITC if supplier has not paid tax) and Section 16(4) (time limit to claim ITC) as being arbitrary and unreasonable.

Respondents' Implied Arguments (Government/GST Department):
* The notifications are a valid exercise of power under Section 168A, as the GST Council recommended the extensions due to the prolonged impact of the COVID-19 pandemic on departmental functions.
* The extensions were necessary for the proper administration of tax law and to protect revenue.
* Therefore, all assessment proceedings completed within the extended deadlines are lawful and valid.

5. Court’s Reasoning

The Court did not delve into the merits of the case or provide any substantive reasoning in this order. The adjournment was purely procedural.

• The order explicitly states, "Due to paucity of time, the matters are adjourned."
• The extension of interim relief is a standard judicial practice to maintain the status quo and protect the petitioners from coercive recovery actions while the main issue is pending adjudication.

6. Statutory References

• Constitution of India: Article 14, 19(1)(g), 226.
• Central Goods and Services Tax (CGST) Act, 2017:
  • Section 73: Determination of tax in non-fraud cases.
  • Section 73(10): Time limit for issuing the order (three years from the due date for filing the annual return).
  • Section 168A: Power of Government to extend time limits under special circumstances (force majeure).
• Andhra Pradesh Goods and Services Tax (APGST) Act, 2017: Corresponding provisions.
• Notifications Challenged:
  • 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

While the court's order does not cite any cases, the petitions filed by some of the taxpayers refer to:
* India Cements Ltd. v. State of Tamil Nadu [(1990) 1 SCC 12]: Likely cited in cases involving the levy of GST on royalty paid for mining rights, arguing that royalty is not a tax.