Bombay High Court scrutinizes validity of GST limitation-extension notifications under Section 168A

Background of the writ petition

The matter in Evie Real Estate Private Limited Vs State of Maharashtra came before the Bombay High Court as a constitutional challenge to a series of notifications issued under Section 168A of the Central Goods and Services Tax Act, 2017 (CGST Act).

The assessee questioned:

  • Notification No. 9/2023 – Central Tax dated 31st March 2023,
  • Notification No. 56/2023 – Central Tax dated 28th December 2023, both issued by the Union of India (Respondent No. 4); and
  • Notification No. 9/2023 – State Tax dated 24th May 2023, and
  • Notification No. 56/2023 – State Tax dated 16th January 2024, both issued by the State of Maharashtra (Respondent No. 1).

All these notifications purport to exercise the power available under Section 168A of the CGST Act to extend time limits prescribed under the statute.

Consequentially, the assessee also sought to set aside:

  • Order No. E-536/1106/LTU-03/GST Audit/2019-20/2024-25/B-174, Mumbai, dated 29th August 2024, issued in Form GST DRC-07 (Ref. No. ZD270824087894L) by Respondent No. 3 under Section 73(9) of the CGST Act.

The core grievance is that the adjudication order dated 29 August 2024 derives its validity solely from the allegedly unlawful extension of limitation through the impugned notifications.

Statutory precondition under Section 168A

Section 168A of the CGST Act was introduced to enable the Government to extend statutory time limits in extraordinary situations, such as war, epidemics, or other calamities of a similar nature. A key statutory requirement embedded in Section 168A is that any notification extending such time limits must be issued on the recommendation of the GST Council.

In the present writ petition, the assessee accepts that:

  • Notification No. 9/2023 – Central Tax dated 31st March 2023, and
  • Notification No. 9/2023 – State Tax dated 24th May 2023,

were stated to have been issued based on a recommendation of the GST Council (Respondent No. 5).

However, in relation to:

  • Notification No. 56/2023 – Central Tax dated 28th December 2023, and
  • Notification No. 56/2023 – State Tax dated 16th January 2024,

the assessee contends that these notifications were not issued pursuant to any GST Council recommendation, thereby failing to satisfy the mandatory condition in Section 168A.

The petition argues that such non-compliance renders the latter notifications ultra vires the parent statute and hence void.

Consequential impact on limitation and adjudication order

The assessee’s argument is that:

  1. The earlier notifications of 31st March 2023 and 24th May 2023 granted a certain extension of the statutory time limits.
  2. The later notifications of 28th December 2023 and 16th January 2024 further extended those limits.
  3. If the latter notifications are struck down as invalid (for want of GST Council recommendation), the effective extended limitation period would stand confined only to what was validly granted by the earlier notifications.
  4. On that basis, the adjudication order dated 29th August 2024 would be beyond the legally permissible limitation period and, therefore, unsustainable.