2024-VIL-551-ALH
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SGST High Court Cases

GST - Challenge to validity of Notification No. 09/2023-Central Tax, dated 31.3.2023 issued under Section 168A of the CGST Act, 2017 insofar it seeks to extend the time limit for passing of adjudication order under Section 73(10) of the CGST Act with reference to proceedings for the FY 2017-18 – Petitioners contend that in absence of any 'force majeure' circumstance existing on 31.03.2023, the exercise of power to extend the limitation to frame the adjudication order for F.Y. 2017-18 upto 31.12.2023 is patently ultra vires the Act – HELD – the powers under Section 168A of the CGST Act is legislative and not an administrative power - Prescription of limitation to perform an action is a pure legislative function and the extension of limitation prescribed by law also remains legislative. The power to condone delay may be granted both to the executive and the judicial bodies, at the same time, the prescription in law, as to limitation remains exclusively, a legislative function - Upon representation and its consideration, the Law Committee formed an opinion favourable to grant a limited extension of time. Accordingly, time extensions were granted for F.Y. 2017-18 up to 31.12.2023, for F.Y. 2018-19 up to 31.03.2024 and for F.Y. 2019-20 up to 30.06.20204 - in the context of a conditional legislative function exercised by the Central Govt and the State Govt on the recommendation made by the Council, it is difficult to hold that there was no application of mind by the delegate in issuing the impugned Notifications - By way of principle it may not be doubted that the recommendations of the Council remained persuasive and the Central Govt and the State Govt. were not duty bound to conform thereto. However, in absence of any fact shown to exist, the Central Govt and the State Govt have exercised their conditional legislative function in accordance with law. No palpable illegality or arbitrariness has been shown to exist as may warrant any deeper examination by the Court – during the pandemic COVID-19, the revenue authorities were visited with a circumstance that was not of their making. Beginning 15.03.2020, it had disabled the working of the revenue authorities, over a long period, occasioned by a ‘force majeure’ circumstance - scrutiny and audit of Annual Returns is inherently linked to and is not independent of adjudication proceedings under Section 73 of the Act – The impossibility arose for reason of obstruction caused by the ‘force majeure’ circumstance to the preparatory action of scrutiny and audit. Once that obstruction had been caused and time lost to COVID-19, the legal and factual impossibility to conduct and conclude adjudication proceedings within the normal period of limitation of three years from the last date of filing of Annual Return, arose by way of a necessary consequence - A legislative action cannot be complained of as being prejudicial on account of extension of limitation. Limitation, though statutory, is not a pre-existing vested right of any party - writ petitions challenging the impugned notifications fail and the petitions are dismissed - Existence of “force majeure” circumstance in the context of provision of Section 168A of the CGST Act, 2017 – HELD - there is intrinsic evidence in the provision of Section 168A of the Central Act and the State Act that clearly recommends to the Court that the exercise of that power is not intended to be made only during the sufferance of “force majeure” circumstance. Different “force majeure” events may visit the society and may impair its economic functioning for different durations with different intensities - Both as to its occurrence, duration of its continuance and the impact that it may leave, a “force majeure” event remains a mystery or atleast unpredictable to the human mind and perception, in real time. Only hindsight wisdom, that is so unique to a humans may give rise to a discussion or discourse as to what may have been done and what could have been done and what should have been done in the past. In the context of enacted laws, neither the petitioners nor the Courts may have a say. It would remain a subject best preserved to the legislature, to deal with in real time - the words “due to force majeure” are preceded with a general expression “in respect of”. Thus besides intrinsic evidence existing in the Explanation to Section 168A of the Act, there is equally convincing evidence available in the use of the words “in respect of”. The legislature clearly did not intend to provide for additional limitation only to complete actions that had been already undertaken. The words “in respect of” are clearly used to enlarge the scope of exercise of the conditional legislation function. Thus, anything directly linked to the performance of action for which time limitation may have been specified, prescribed or notified under the Central Act and the State Act and which action is perceived “cannot be completed or complied”, the delegated/conditional legislation in the shape of Section 168A, may arise.
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