GST Act | Can Time Limit To Adjudicate Show Cause Notice Be Extended By Notification Under S.168A? Supreme Court To Consider

The Supreme Court is to decide whether the time limit for adjudicating show cause notice and passing an order can be extended by the issuance of notifications under Section 168-A of the GST Act. This provision empowers the Government to issue notification for extending the time limit prescribed under the Act which cannot be complied with due to force majeure.

“The issue that falls for the consideration of this Court is whether the time limit for adjudication of show cause notice and passing order under Section 73 of the GST Act and SGST Act (Telangana GST Act) for financial year 2019-2020 could have been extended by issuing the Notifications in question under Section 168-A of the GST Act.,” remarked the Bench of Justices J.B. Pardiwala and R. Mahadevan.

It is pertinent to mention that Section 168 (1) reads as:

“168A. Power of Government to extend time limit in special circumstances.— (1) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions which cannot be completed of complied with due to force majeure.”

Initially, a batch of petitions were filed before the Telangana High Court in its writ jurisdiction. Therein, among others, they had challenged the legality, validity and propriety of notification Nos.13/2022, dated 05.07.2022, 9 and 56/2023, dated 31.03.2023 and 28.12.2023, respectively.

Before the High Court, it was argued that the show-cause notice was issued on 31.05.2024. However, an order was passed on 29.08.2024 after the maximum period of limitation, as given under Section 73 of the Act. The petitioners submitted that no force majeure conditions existed. Thus, in absence of such conditions, no notification could have been passed. Apart from this, they contended that even the COVID-19 relaxations/extensions are not available as the same lasted until 28.02.2022.

Several High Court decisions were cited to support their arguments. In the case of Graziano Transmissions v. Goods and Services Tax, the Allahabad High Court, inter-alia, opined that orders of Supreme Court in suo motu jurisdiction relaxing limitation are inapplicable for proceedings under the GST Act.

While placing reliance on this judgment, the petitioner also highlighted that the Court noted that the impugned notification was issued pursuant to the decision of the GST Implementation Committee and not by the GST Council. However, it failed to address the difference between the 'recommendation of committee' and 'ratification by Council'.

In M/s. Barkataki Print and Media Services, Dhrubajyoti Barkotoku v. Union of India, the Gauhati High Court opined that the recommendation of GST Council is sine qua non for exercising power under Section 168A of the Act.

In the present case, on the issue of recommendation and ratification, the High Court observed that the recommendation of the Council leaves no room as a condition precedent before the Government issues a notification.

It pointed out that the notification No. 56/23 was issued without there being any recommendation of the Council. The same was passed based on the Implementation Committee's decision. Thus, 'ratification' done after issuance of Notification No.56/2023 will not provide life to Notification No.56/2023., it added and reasoned:

“The purpose behind using the phrase 'on the recommendation of Council' is to equip the Government with the expert opinion of an expert constitutional body i.e., GST Council. This enables the Government to take an informed decision based on such opinion of Council. Since all the States have participation in the Council, the recommendation of Council will certainly be in consonance with doctrine of cooperative federalism.”

Adverting to the Supreme Court orders relaxing limitation, the Court said that the directions were applicable to laws which stipulated limitation period and Section 73 was one such provision. After scrutinising the directions passed, the Court observed that it could not be said that the limitation extension were inapplicable in the present proceedings.

It also observed that Section 168A provides for time extension 'in respect of actions' which could not be completed due to force majeure.

“In the manner statute i.e., Section 168A is worded, there is no cavil of doubt that the Law makers intended to give it a broader umbrella to bring within its shadow, such actions which could not be completed or complied with, due to force majeure…The COVID-19 Pandemic created extraordinary difficulties which could not have been anticipated, measured and solved with mathematical precision. Thus, hair-splitting in many aspects must be eschewed…While dealing with such an extraordinary crisis, Government's action must be viewed in a broad perspective.”

It also relied on the Patna High Court decision in M/s Barhonia Engicon Private Limited v. The State of Bihar wherein it rejected a petition challenging notifications extending the timeline for issuance of Orders under Section 73 of the Act.

In view of this, the High Court while disposing of the present set of petitions, observed:

“Thus, the question of validity of notifications pales into insignificance. Since the period between 15.03.2020 to 28.02.2022 stood excluded for the purpose of counting limitation by an order which became law of the land, the remaining argument relating to validity of notifications became academic in nature.”

Against this judgment, the present petition filed a special leave petition. During the hearing, Senior advocate Dr. Muralidhar pointed out that there is a cleavage of opinion amongst different High Courts of the country.  The Supreme Court issued notice to the respondents, returnable on 07.03.2025.

Appearance for petitioner:

Dr. S. Muralidhar, Sr. Adv. Ms. Aditi Anil Dani, AOR Mr. M. Ramachandra Murthy, Adv. Ms. Niharika Singh, Adv. Mr. M A Karthik, Adv. Mr. Maitreya Subramaniam, Adv. Ms. Pallak Bhagat, Adv.

Case Name: M/S HCC-SEW-MEIL-AAG JV v. ASSISTANT COMMISSIONER OF STATE TAX & ORS., Petition for Special Leave to Appeal (C) No.4240/2025

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