M/S Sree Nikhil Marketing vs The Commissioner Of Central Tax on 9 January, 2025

1. Outcome

This is not a final judgment but a procedural interim order. The High Court did not decide the case on its merits. The outcome of the hearing on January 9, 2025, was:
* Adjournment: The batch of writ petitions was adjourned to a future date, April 24, 2025, due to a lack of time ("paucity of time").
* Continuation of Interim Orders: All previously granted interim orders (such as stays on recovery proceedings) were extended 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 by the Central and State Governments under Section 168-A of the CGST/SGST Acts, 2017. These notifications extended the statutory time limit for issuing show-cause notices and passing assessment orders under Section 73 for the financial years 2017-18, 2018-19, and 2019-20.

Consequently, the petitioners challenge the legality of the assessment orders and demand notices issued against them, contending that they are barred by limitation.

3. Key Facts

• A large number of taxpayers (the petitioners) filed separate writ petitions before the High Court of Andhra Pradesh.
• These petitioners received show-cause notices and/or assessment orders from GST authorities demanding tax, interest, and penalties for financial years including 2017-18, 2018-19, and 2019-20.
• These notices and orders were issued after the original deadlines prescribed under Section 73(10) of the CGST Act but within the extended deadlines provided by various government notifications.
• The petitioners have challenged both the underlying assessment orders and the notifications that extended the limitation period. The High Court has grouped these similar petitions to be heard together.

4. Arguments

The order does not record detailed arguments from either side. However, the petitioners' main contentions can be inferred from the prayers in their writ petitions:

Petitioners' Arguments:
* Ultra Vires Challenge: The notifications (e.g., No. 9/2023-Central Tax, No. 56/2023-Central Tax) extending the limitation period are ultra vires Section 168-A of the CGST Act.
* Misuse of Force Majeure Clause: Section 168-A is a special power to be used only in genuine force majeure situations like war, pandemic, floods, etc., which prevent the government from performing its statutory duties. The petitioners contend that the COVID-19 pandemic's impact did not justify such prolonged and repeated extensions, especially for later assessment years.
* Violation of Article 14: The extensions are manifestly arbitrary, unreasonable, and violate Article 14 of the Constitution of India.
* Time-Barred Assessments: Since the notifications extending the time limit are invalid, the assessment orders and notices issued based on these extensions are barred by the original limitation period under Section 73(10) and are therefore null and void.
* Other Constitutional Challenges: Some petitions also challenge the validity of Section 16(2)(c) (making Input Tax Credit (ITC) dependent on tax payment by the supplier) and Section 16(4) (prescribing a time limit for availing ITC) as arbitrary and unconstitutional.

5. Court’s Reasoning

The High Court provided no reasoning on the merits of the case. The order is purely procedural. The Court simply noted "paucity of time" as the reason for adjourning the hearing and extended the existing interim orders to maintain the status quo until the case can be heard in detail.

6. Statutory References

• Constitution of India: Article 14, 19(1)(g), 21, 226, 265, 300-A.
• Central Goods and Services Tax Act, 2017 (CGST Act) & corresponding APGST Act:
  • Section 16(2)(c): Condition for availing ITC relating to tax payment by the supplier.
  • Section 16(4): Time limit for availing ITC.
  • Section 73: Determination of tax not paid or short paid for reasons other than fraud.
  • Section 73(10): Original time limit for issuing an order under Section 73.
  • Section 74: Determination of tax not paid or short paid by reason of fraud.
  • Section 168-A: Power of the Government to extend time limits in special circumstances.
• Notifications & Government Orders (G.O.):
  • Notification No. 9/2023-Central Tax, dated 31.03.2023
  • Notification No. 56/2023-Central Tax, dated 28.12.2023
  • Corresponding State notifications (e.g., G.O. Ms. No. 221, G.O. Ms. No. 2).

7. Precedents Cited

The court's order itself does not cite any precedents. However, the prayers in some of the writ petitions make reference to:
* India Cements Ltd. v. State of Tamil Nadu ((1990) 1 SCC 12): This was cited by petitioners, likely in cases involving the taxability of royalty paid on mining leases.