The Hon’ble Madras High Court in Tata Play Limited v. Union of India and Others [W.P. Nos. 17184 of 2023 and batch dated June 12, 2025] held that Notification No. 56/2023-CT issued under Section 168A of the CGST Act were ultra vires and unsustainable, due to absence of valid recommendation from the GST Council at the time of issuance.
Facts:
Tata Play Limited and other petitioners challenged the validity of Notification No. 56/2023-CT issued under Section 168A of the CGST Act. These notifications extended the limitation period for issuing orders under Section 73(10) of the CGST Act for FY 2018-19 and 2019-20. The Petitioners contended that:
- conditions precedent for invoking Section 168A were not satisfied,
- the term “force majeure” under the Explanation to Section 168A had been misapplied, and
- that impugned Notification No. 56/2023-CT, was issued even before any recommendation was made by GST Council.
Issues:
- Whether Notification No. 9/2023-CT dated March 31, 2023 and Notification No. 56/2023-CT dated December 28, 2023 issued under Section 168A of the CGST Act are delegated legislation or conditional legislation?
- Whether the issuance of such notifications without establishing a proximate force majeure event renders them ultra vires Section 168A?
- Whether recommendation of the GIC can substitute the statutory requirement of recommendation by the GST Council?
- Whether post-facto ratification by the GST Council validates a notification issued earlier under Section 168A?
- Whether the impugned notifications extinguish a vested right or are contrary to Article 142 of the Constitution?
Held:
The Hon’ble Madras High Court in W.P. Nos. 17184 of 2023 and batch held as under:
- Observed that, Section 168A is a form of delegated legislation, as it enables modification of legislatively prescribed limitation in special circumstances due to force majeure.
- Held that, the power under Section 168A must be exercised strictly, as it is an exception to the limitation framework under Section 73(2) and 73(10) of the CGST Act, which is founded in the legislative policy.
- Held that, systemic inefficiencies, staff shortages, or technical delays in backend systems cannot constitute “force majeure” under the Explanation to Section 168A, which contemplates events like epidemics or natural calamities as proximate causes.
- Noted that, by March 2022, all employees had returned to office and COVID-19 had largely abated; thus, reliance on COVID-19 in mid/ late 2023 as a force majeure cause was untenable.
- Held that. reliance on outdated or repetitive materials by the GST Council without fresh evaluation of present facts vitiates the recommendation, especially when earlier materials were considered nearly 8 months prior.
- Observed that, the issuance of Notification No. 56/2023-CT on the recommendation of the GIC, which was only ratified later by the GST Council, does not satisfy the statutory mandate of prior recommendation under Section 168A.
- Held that, Notification Nos. 9/2023-CT and 56/2023-CT are ultra vires the CGST Act and arbitrary, being based on incorrect assumptions about the continuing impact of COVID-19 and being issued without jurisdictional facts.
- Further remanded the assessment/adjudication proceedings back to the original authorities for fresh consideration after treating impugned notices/orders as show cause notices and granting opportunity of hearing.
Our Comments:
Section 168A of the CGST Act says about the Power of Government to extend time limit in special circumstances. The Court emphasizes that “force majeure” must be a proximate and not remote cause is crucial, particularly where administrative delays arise from internal inefficiencies. Reliance is also placed on principles like delegatus non potest delegare and causa causans in interpreting fiscal statutes.
Legal Jurisprudence:
In Indian Express Newspapers (Bombay) (P) Ltd. v. Union of India, (1985) 1 SCC 641, The Supreme Court held that subordinate legislation must conform to the parent statute and may be struck down if it is manifestly arbitrary or contrary to the enabling provision. Applying this to Section 168A, notifications that reduce the statutory limitation period would be ultra vires.
In the case of Peddinti Venkata Murali Ranganatha Desika Iyengar v. Government of Andhra Pradesh, (1996) 3 SCC 75, the Supreme Court clarified that legislation based on erroneous assumptions of existing law cannot divest vested rights. A notification curtailing the limitation period—without amending the statute, is an impermissible legislative assumption.
Further in the case of Union of India & Anr. v. Mohit Minerals Pvt. Ltd., (2022) 10 SCC 700, the Supreme Court while holding that not all GST Council recommendations are binding, the Court emphasized that where a statute, like Section 168A mandates action based on GST Council recommendation, the requirement becomes binding and jurisdictional.
However divergent views have been adopted by different High Courts. In the case of M/s. Brunda Infra Pvt. Ltd. & Ors. v. Additional Commissioner of Central Tax, Hyderabad & Ors., 2025 SCC OnLine TS 145, the Telangana High Court, upheld the validity of notifications under Section 168A, recognizing the provision as a tool to extend limitation during force majeure. The Court highlighted that requiring GST Council recommendations upholds the Doctrine of Cooperative Federalism.
In the case of M/s. Graziano Transmissoini v. Goods and Services Tax & Ors., 2024 SCC OnLine All 3012, the Allahabad High Court, treated the notification as conditional legislation and accepted its validity on the basis that the GST Council proceedings supported the extension, and that no other factual impediment to compliance had been demonstrated by the assessee.
Thus, the legal position emerging from the above cases is that notifications under Section 168A must operate within the limits set by the statute—namely, they must (i) extend and not shorten time limits, (ii) be based on a clear and proximate force majeure event, and (iii) be preceded by a valid GST Council recommendation. While Telangana and Allahabad High Courts have upheld the notifications, the Madras High Court’s approach preserves the federal structure and limits executive overreach in fiscal law.
Relevant Provisions:
Section 168A – CGST Act, 2017
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 or complied with due to force majeure.
(2) The power to issue notification under sub-section (1) shall include the power to give retrospective effect to such notification from a date not earlier than the date of commencement of this Act.
Explanation. – For the purposes of this section, the expression “force majeure” means a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act.”
Section 73 – CGST ACT, 2017
73. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful- misstatement or suppression of facts.
“(2) The proper officer shall issue the notice under clause (b) of sub-section (1) at least three months prior to the time limit specified in sub-section (10) for issuance of order.”
(10) The proper officer shall issue the order under sub-section (9) within three years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within three years from the date of erroneous refund.”
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