Madras High Court Sets Aside Extension Notifications Issued Under Section 168A of CGST Act

The Madras High Court has quashed the extension notification issued under section 168A of the CGST Act, 2017 which extended the time limit for adjudication.

The bench of Justice Mohammed Shaffiq held that Notification No. 09/2023 has been declared bad in law, as its issuance was not occasioned by a force majeure event or any proximate cause thereof, as mandated under Section 168A. Notification No. 56/2023 has also been quashed on the ground that it was issued without the recommendation of the GST Council.

The bench categorically held that the decision of the GST Implementation Committee cannot be treated as a recommendation of the GST Council, since the Committee is neither a statutory nor a constitutional body.

Multiple petitions were filed challenging the validity of Notification No. 09/2023 and Notification No. 56/2023-Central Tax dated 28.12.2023 issued under Section 168A of the Central Goods and Services Tax Act of 2017/Tamil Nadu Goods and Services Tax Act of 2017.

The Petitioner, Volvo Auto Indi Private Limited had filed the present writ petition challenging the Demand Order confirming the demand of GST amounting to Rs. 1,01,90,58,244 under Section 73 of the Central Goods and Services Tax Act, 2017/Tamil Nadu Goods and Services Tax Act, 2017 along with applicable interest and penalty for the period April 2019 to March 2020 and directing the Petitioner to deposit the amount by 27.11.2024. The said Demand Order was issued pursuant to the extension granted for issuance of Orders by Notification 56/2023 dated 28.12.2023.

The Petitioner had also filed the Petition challenging the validity of Notification No. 56/2023-Central Tax extending the time limit for issuance of Orders for FY 2019-20 upto 31.08.2024 issued purportedly pursuant to the recommendation of the GST Council as being ultra vires Section 168A of the CGST/TNGST Act in as much as it failed to meet the conditions precedent as laid down under Section 168A of the CGST Act i.e., prior recommendation of the GST Council, rendering the same as being in conflict with the substantive provision as also violative of Articles 14 and 19(1)(g) of the Constitution of India.

Senior Advocate, Mr. Sujit Ghosh assisted by Advocates from CSG Legal – Ms Mannat Waraich and Ms Jaya Rishi argued that pursuant to Section 168A, recommendation by the GST Council is a pre-condition for issuance of the Impugned Notification. Absent that, the mandate of the section is not satisfied. Moreover, the justification offered by the Respondents regarding post facto ratification of the Impugned Notification by the GST Council in its 53rd Meeting dated 22.06.2024 also cannot be sustained. Therefore, the Notification No. 56/2023 dated 28.12.2023 is in contravention of Section 168A and hence illegal.

Mr. Ghosh contended that the notification fails to satisfy the statutory mandate of a prior recommendation of the GST Council and instead is based on a decision of the GST Implementation Committee (GIC) which is merely an administrative body and cannot be equated to the GST Council which is a Constitutional body set up under Article 279A of the Constitution. Post facto ratification of the decision of GIC by the GST Council would not lead to satisfaction of the statutory mandate as laid down under Section 168A.

Mr. Ghosh added that the recommendation of the GST Council was intended to act as a fetter on the power conferred upon the Delegatee so as to protect it from the vice of excessive delegation, particularly where the Delegatee exercised its power in relation to limitation, which touches upon jurisdiction and therefore cannot be dealt with in a casual manner In any case, the Central Government was required to obtain approval of the GST Council and under the scheme of plenary legislation, these recommendations are binding.  In any case, the Impugned Notification is a fraud on the nation in as much as on 28.12.2023 i.e., on the date of its issuance, the Respondents have misrepresented that the Impugned Notification was based on the recommendation of the GST Council whereas the Respondents by their own admission accept that it was a post facto ratification.

The court set aside all the Orders and notices arising out of such extension notifications, now held to be bad in law and has remanded all proceedings and orders passed pursuant to the notifications for fresh consideration. Insofar as show cause notices (SCNs) issued under the aegis of these notifications are concerned, the High Court has granted the concerned assessees a period of eight weeks to submit their replies.se notifications are concerned, the High Court has granted the concerned assessees a period of eight weeks to submit their replies.

Case Details

Case Title: Volvo Auto India Private Limited v. Union of India & Ors 

Case No.: W.P. No. 33877 of 2024

Date:  12/06/2025

Counsel For Petitioner:  Sr. Adv. Sujit Ghosh, Adv. Mannat Waraich, and Adv. Jaya Rishi 

Counsel For Respondent: ASG