Madras High Court Strikes Down GST Time Extension Notifications: Notifications Issued Under Section 168A Cannot Override Supreme Court’s Limitation Exclusion

The Madras High Court in the case of MS TATA PLAY LIMITED REPRESENTED BY ITS AUTHORIZED SIGNATORY AND OTHERS VERSUS UNION OF INDIA, STATE OF TAMIL NADU, COMMERCIAL TAXES DEPARTMENT, COMMISSIONER OF GST & CENTRAL EXCISE, ADDITIONAL COMMISSIONER, OFFICE OF THE ADDITIONAL COMMISSIONER OF GST AND CENTRAL EXCISE, CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, NEW DELHI AND OTHERS vide W. P. Nos. 17184, 22511, 22516, 34667, 36344, 36347, 36599, 36604 of 2024 dated 12.06.2025, has held that Notifications 9/2023 and 56/2023 issued under Section 168A of the CGST Act, extending limitation for issuance of notices and passing of orders under Section 73, are ultra vires. The power under Section 168A can only be invoked on occurrence of a force majeure event, which must be the proximate cause for the failure to act within limitation. In the present case, systemic deficiencies and lack of personnel, not COVID-19, were the real causes, rendering the exercise of delegated legislative power invalid. The explanation to Section 168A must be construed narrowly using ejusdem generis, and recommendation of the GST Council is a mandatory jurisdictional requirement. Notifications issued without consideration of relevant material are non-est in law.

Facts of the case: In this case, the petitioners challenged the validity of Notification Nos. 9/2023 and 56/2023 – Central Tax, issued by the Central Government under Section 168A of the CGST Act, 2017, which extended the limitation period for issuing show cause notices and passing adjudication orders under Section 73(10) for the financial years 2017-18, 2018-19, and 2019-20. These notifications were ostensibly issued due to COVID-19 (considered a force majeure event), which is a prerequisite for invoking Section 168A.

It was contended that the recommendation of the GST Council, a mandatory precondition under Section 168A, was absent or post-facto, rendering the notifications procedurally invalid. The force majeure requirement under the Explanation to Section 168A was not established and notifications lacked adequate reasoning or proximate connection to COVID disruption.

Further, submitted that the Supreme Court had already, under Article 142, excluded the period from 15.03.2020 to 28.02.2022 from limitation across all judicial and quasi-judicial proceedings (vide order dated 10.01.2022). The impugned notifications, instead of extending, curtailed the limitation that was already enlarged by the SC’s order, thus diminishing the rights of tax authorities and being arbitrary.

Also, Notification No. 56/2023 was issued prior to recommendation of the GST Council, based only on a decision of the GST Implementation Committee (GIC), which lacks statutory authority to recommend under Section 168A.

Issue: Whether the notifications issued under Section 168A of the CGST Act were valid delegated legislation.  Whether the issuance of the impugned notifications without a proper recommendation of the GST Council renders them invalid. Whether the Supreme Court’s order under Article 142 excluding limitation overrides the extension provided under the impugned notifications.

Held that:

The High Court observed and held as under:

A. Notifications under Section 168A are Delegated Legislation, not Conditional Legislation:

The Court held that Section 168A confers discretion on the Central/State Government to modify limitation periods, which is inherently legislative in nature. Hence, the notifications issued thereunder are a form of delegated legislation, not conditional legislation. Since limitation is a matter of public policy laid down by the legislature, any modification thereto via delegated powers must meet a high standard of justification.

The Court emphasized that exceptions to the legislative mandate on limitation must be narrowly interpreted. Section 168A operates as an exception to the fixed limitation under Section 73; hence, the government must strictly comply with the preconditions for exercising that power.

B. Section 168A mandates prior recommendation by the GST Council. It is a jurisdictional precondition, not a formality.

The exercise of power under Section 168A of the CGST Act by the Central Government requires a prior recommendation of the GST Council. Though the recommendation is not binding on the Government (i.e., the Government may choose to act or not act upon it), its existence is mandatory and a sine qua non for valid exercise of power. Without a valid recommendation by the GST Council, the issuance of Notification No. 56/2023 is legally unsustainable and ultra vires.

Further, GIC i.e. GST Implementation Committee, is not the GST Council and cannot act as a substitute for the constitutional body envisaged under Article 279A of the Constitution. Section 168A clearly specifies the recommendation must emanate from the GST Council, and there is no legislative provision permitting delegation or sub-delegation of this function to the GIC. Consequently, the issuance of the notification based on a recommendation of the GIC, later ratified by the GST Council, does not constitute compliance with Section 168A. The law requires the recommendation to precede the exercise of power. Post-facto approval is not recognized under statutory interpretation of Section 168A.

C. Distinction Between “Exclusion” and “Extension” of Limitation Recognized, Article 142 Orders of the Supreme Court Continue to Apply

The Supreme Court’s suo motu order under Article 142, excluding the period from 15.03.2020 to 28.02.2022 for computing limitation, remained valid and applicable. Notifications under Section 168A deal with extension of limitation (i.e., enlarging the time period itself), whereas SC order deals with exclusion (i.e., removing certain time from computation). The Court recognized both as distinct legal concepts that do not overlap but must be read harmoniously.

The contention that the orders of the Hon’ble Supreme Court under Article 142, particularly the order dated 10.01.2022, ceased to apply upon enactment of Section 168A and issuance of Notification No. 13/2022, was rejected. Orders passed under Article 142 are constitutionally binding, and continue to govern the computation of limitation for the period 15.03.2020 to 28.02.2022, irrespective of Section 168A notifications. These orders applied to all judicial and quasi-judicial proceedings, including those under Section 73 of the CGST Act, and cannot be overridden by an invalid executive notification.

Thus, the Court held that the notifications were not based on valid exercise of delegated legislative power, failed to satisfy statutory preconditions under Section 168A, and violated the overarching principle that exceptions to statutory limitation must be construed strictly. All matters remanded to the assessing authorities. The Petitioners were allowed to treat prior orders as SCNs, file objections within 8 weeks, and authorities were directed to pass fresh orders after hearing.