GST High Court Rulings: Section 168A Validity and Appeal Delay Condonation
Two recent High Court rulings have added important judicial clarity to GST compliance, one challenging the validity of a CBIC notification extending the time limit for orders under Section 73(9) without GST Council recommendation and another affirming a taxpayer’s right to have an appeal delay condoned where the assessee was unaware of orders issued through the GST portal. Both decisions carry direct implications for businesses navigating GST and indirect tax advisory obligations, particularly in the areas of demand order timelines and appeal rights.
Gauhati High Court: CBIC Notification 56/2023-CT on Section 73(9) Time Limit Extension Held Invalid Without GST Council Recommendation
The Hon’ble High Court of Gauhati held that the extension of the time limit for passing orders under Section 73(9) of the CGST Act as effected through CBIC Notification No. 56/2023-CT dated 28 December 2023 was not in consonance with the provisions of Section 168A, which mandates a prior recommendation of the GST Council before any such extension can be notified.
Case: Jawahar Singh v. Union Bank of India, W.P (C) No. 4681 of 2024 (September 13, 2024)
The petitioner challenged the issuance of Notification No. 56/2023-CT, which had extended the time limit for passing orders under Section 73(9) for FY 2018-19 to 30 April 2024 and for FY 2019-20 to 31 August 2024. The petitioner contended that the said notification was issued without a recommendation from the GST Council, which is a mandatory procedural requirement under Section 168A of the CGST Act.
HELD: Notification No. 56/2023-CT was not in consonance with the provisions of Section 168A. If the notification could not withstand legal scrutiny, all consequential actions taken on the basis of such notification, including orders passed relying on the extended timeline, would also fail.
This ruling has significant implications for taxpayers who received Section 73(9) demand orders for FY 2018-19 or FY 2019-20 within the extended timelines notified through Notification 56/2023-CT. Such orders may be challengeable on the grounds that the underlying notification was legally unsustainable. Businesses in this position should assess their exposure through structured GST advisory and compliance support.
Madras High Court: GST Appeal Delay Condoned Where Assessee Was Unaware of Portal Notices
The Hon’ble High Court of Madras condoned a delay of 2 months and 27 days in filing a GST appeal, holding that the delay was justified in the interest of justice where the assessee was unaware of the notice and order issued through the GST portal and had therefore been unable to file timely objections.
Case: Mahesh Arts v. Deputy Commissioner (ST) GST Appeal, Chennai-I; W.P. No. 22548 of 2024 & W.M.P Nos. 24565 & 24566 of 2024 (August 13, 2024)
A notice was issued to the assessee alleging wrongful availment of Input Tax Credit in GSTR-3B on the purchase of motor vehicles, as reflected in GSTR-2A. The proposal was subsequently confirmed, levying tax and penalties. The assessee filed an appeal against the order with a delay of 2 months and 27 days; the appeal was rejected by the appellate authority on limitation grounds.
The assessee submitted that the impugned order was passed without affording an opportunity of hearing and that the assessee had not been aware of the notice issued through the GST portal, making it impossible to file objections in time.
HELD: In the interest of justice, the delay in filing the appeal was condoned, and the appellate authority was directed to take up the appeal on merits without raising any issue relating to limitation.
This decision reinforces the principle that genuine ignorance of portal-based notices, where it can be demonstrated, can be grounds for condonation of delay in appeal proceedings. However, it also underscores the critical importance of regular monitoring of the GST Common Portal, as failure to track notices and orders remains a common trigger for the loss of statutory appeal rights. Businesses that receive or anticipate adverse GST orders should ensure timely access to GST litigation and appeals support to protect their rights within statutory timelines.
Additional Resources
For further reading on related GST litigation and High Court case law topics, the following MBG insights may be useful: