M/S. Gowni Palli Murali, vs The Union Of India, on 9 January, 2025

Summary of High Court Order

Case Title: M/S. Gowni Palli Murali, vs The Union Of India
Court: High Court of Andhra Pradesh
Date of Order: 9 January, 2025
Nature of Order: Interim Order (Adjournment and extension of stay)

1. Outcome

This is not a final judgment on the merits of the case. The High Court has adjourned the hearing for a batch of related writ petitions to 24.04.2025 due to a lack of time. The Court further directed that any interim orders (such as stay on recovery of tax, interest, and penalty) granted earlier in these matters shall remain in effect until the next hearing date.

2. Core Issue

The central legal question across all petitions is whether the Central and State Governments have the authority under Section 168A of the CGST/SGST Act, 2017 to extend the statutory time limit for issuing assessment orders under Section 73(10) for the financial years 2017-18, 2018-19, and 2019-20 by citing the COVID-19 pandemic as a force majeure event, long after its peak impact had subsided.

Consequently, the petitioners challenge the legality of Show Cause Notices and Assessment Orders issued against them within these extended timelines, arguing they are barred by limitation.

3. Key Facts

• The petitioners are various registered taxpayers who have been issued Show Cause Notices (SCNs) and/or Assessment Orders demanding tax, interest, and penalties under the GST Acts for the financial years 2017-18, 2018-19, and 2019-20.
• These orders were issued after the original statutory deadline prescribed under Section 73(10) of the CGST Act had passed.
• The GST authorities relied on Notification No. 09/2023-Central Tax and Notification No. 56/2023-Central Tax (and corresponding State GOs), which extended the limitation period for passing such orders.
• The petitioners filed writ petitions challenging both the validity of these extension notifications and the assessment orders passed in reliance upon them.

4. Arguments (of the Petitioners)

The petitioners' primary arguments, as detailed in their prayers, are:

• Extension is Ultra Vires Section 168A: The power to extend timelines under Section 168A can only be invoked in genuine force majeure situations (e.g., war, epidemic, natural disaster) that make it impossible for authorities to perform their duties. The petitioners contend that in 2023, the effects of the COVID-19 pandemic did not constitute a valid force majeure event to justify such a blanket extension, and the department's administrative delays cannot be shielded under this provision.
• Arbitrary and Violative of Article 14: The extensions are manifestly arbitrary, unreasonable, and violate the right to equality under Article 14 of the Constitution.
• Orders are Time-Barred: Since the notifications extending the time limit are illegal and void, the assessment orders passed based on them are barred by limitation and are therefore without jurisdiction, non-est, and invalid in the eyes of the law.
• (In some petitions) Challenge to Substantive Provisions: Some petitioners have also challenged the constitutional validity of Section 16(2)(c) (which requires the supplier to have paid the tax for the recipient to claim Input Tax Credit) and Section 16(4) (which prescribes a time limit to claim ITC).

5. Court’s Reasoning

The provided document is a procedural order, not a final judgment. The Court has not deliberated on the merits of the arguments raised by the petitioners. The only reason provided for its decision is "paucity of time," leading to the adjournment of the matters.

6. Statutory References

• Central Goods and Services Tax (CGST) Act, 2017 & State Goods and Services Tax (SGST) Acts:
  • Section 73: Determination of tax for non-fraud cases.
  • Section 73(10): Original time limit for issuing an order (three years from the due date of the annual return).
  • Section 168A: Power of the Government to extend time limits in special circumstances (force majeure).
  • Section 16(2)(c) & 16(4): Conditions and time limit 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 Orders (G.O.s).

7. Precedents Cited

• India Cements Ltd. vs. Collector of Central Excise [(1990) 1 SCC 12] was cited by some petitioners in their pleadings.