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SGST High Court Cases

GST – Extension of period for passing of order under Section 73(10) of the CGST Act, 2017 – Validity of Notification No. 56/2023-CT, issued in exercise of the powers conferred under Section 168A of the CGST Act, 2017 - Challenge to validity of Notification No.56/2023-Central Tax dated 28.12.2023 on the ground that the condition precedent for issuance of the notifications, i.e. recommendation of the GST Council and existence of force majeure, were not fulfilled - Whether the recommendation of the GST Council is a sine qua non for exercise of power by the Government under Section 168A of the CGST/SGST Acts; and whether the Notification No.56/2023-CT dated 28.12.2023, is ultra vires the provisions of Section 168A of the CGST Act - HELD - The use of the phrase “on the recommendation of the Council” in Section 168A prima facie suggests that the power to be exercised under Section 168A by the Government is when a recommendation is made by the GST Council - the recommendations to be made by the GST Council if required as per the provisions of the Central Act or the State Act has to be construed to be a sine qua non for exercise of power by the Union or the State Government. In other words, wherever the provisions of the Central Act or the State Act stipulates that an act is required to be done on the recommendation of the GST Council, the act can be done only when there is a recommendation - The GST Council recommendation may or may not be binding on the Government depending upon the purpose of the enactment. But the fact that it is not binding cannot be construed to mean that the Government can act without a recommendation of the GST Council if the Central Act or the State Act stipulates that the Government can exercise on the recommendation of the GST Council - the judgment of the Supreme Court in the case of Mohit Minerals Pvt. Ltd. does not lay down the proposition that as some of the recommendations are not binding, there is no requirement of recommendation by the GST Council to exercise the power - irrespective of the fact whether the GST Council recommendations are binding or not, it cannot be said that without recommendations, the power under Section 168A could be exercised - when power is conferred on the Government to make delegated legislation, the said power has to confirm to the stipulations contained in the parent Act and in the instant case, the Notification No.56/2023-CT had to confirm to the stipulations prescribed in Section 168A of the CGST Act which would include the requirement of the recommendations of the GST Council - The Central Government knew that there was no recommendation from the GST Council and this aspect is clearly admitted. However, in the Notification No.56/2023-CT, the Central Government for reasons best known mentioned that “on the recommendations of the Council” which on the face of it shows that the exercise of power by the Central Govt insofar as the Notification No.56/2023-CT is concerned is a colourable exercise of power for which the said Notification No.56/2023- CT is a colourable legislation - Further, the existence of force majeure as defined in the Explanation to Section 168A is a condition precedent for the Government to exercise the power under Section 168A of both the Central Act and State Act - the Notification No.56/2023-CT was issued without any recommendation of the GST Council and without considering the existence of force majeure, and therefore, the said notification is ultra vires the provisions of Section 168A - the impugned Orders-in-Original passed under Section 73(9) of the CGST/SGST Act are quashed as they were passed beyond the time period prescribed under Section 73(10) in the absence of a valid notification issued under Section 168A – the writ petitions are allowed
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