Stayed granted against Notification extending limitation for adjudication

Last updated: 30 January 2025

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Quick Summary

The Uttarakhand High Court has stayed the operation of a notification that extended limitation periods for GST adjudication. This follows similar rulings in other High Courts, including the Gauhati High Court which found the notification ultra vires due to a lack of GST Council recommendation. The Karnataka High Court also stayed an adjudication order based on this notification, highlighting concerns about jurisdiction and constitutional principles.

Court :
Uttarakhand High Court

Brief :
The Hon'ble Uttarakhand High Court in the case of Hindustan Construction Company Limited v. Union of India [WPMB No. 548 of 2024 dated December 11, 2024] listed the case on February 25, 2025 along with WPMB N. 523 of 2024 and held that the effect and operation of Notification No. 56/2023 dated December 28, 2023("the Notification") and other consequential orders stayed.

Citation :
WPMB No. 548 of 2024 dated December 11, 2024

The Hon'ble Uttarakhand High Court in the case of Hindustan Construction Company Limited v. Union of India [WPMB No. 548 of 2024 dated December 11, 2024] listed the case on February 25, 2025 along with WPMB N. 523 of 2024 and held that the effect and operation of Notification No. 56/2023 dated December 28, 2023("the Notification") and other consequential orders were stayed.

Our Comments:

The Gauhati High Court in the case of M/s Barkataki Print and Media Services v. Union of India & Ors. (WP(C)/3585/2024 dated September 09, 2024) ruled the Notification is ultra vires due to the absence of a GST Council recommendation and lack of force majeure grounds. This decision is a crucial precedent for taxpayers impacted by extended timelines under invalid notifications.

The Hon'ble Karnataka High Court stayed the operation of the adjudication order in the case of Siemens-Gamesa Renewable Power Pvt Ltd. v. Deputy Commissioner of Commercial Taxes & Ors. (Writ Petition No.31388/2024 dated December 10, 2024) directing recovery of erroneous refund and dues arising due to mismatch of returns pursuant to the order passed invoking the Notification issued under Section 168A of the Central Goods and Services Tax Act, 2017 ("the CGST Act") and corresponding State Government Notification No. 6/2023 dated April 6, 2023 that extended the time limit for issuance of Show Cause Notice and passing of Orders for FY 2019-20 to August 31, 2024. The Petitioner's challenge was based on two grounds:

i. Notification issued without prior recommendation of the GST Council as mandated by the statute and therefore time barred and without jurisdiction,

ii. Violation of principles of res-judicata and violative of Article-14 of the Constitution as no appeal has been filed against the refund order.

Further, stay orders have been passed on similar lines in other various High Courts.

OFFICIAL JUDGMENT COPY HAS BEEN ATTACHED

FAQ :

The Uttarakhand High Court has stayed the effect and operation of Notification No. 56/2023, which extended limitation periods for GST adjudication.

The notification was challenged on grounds that it was issued without the mandatory prior recommendation of the GST Council, rendering it time-barred and without jurisdiction. It was also argued to violate principles of res-judicata and Article 14 of the Constitution.

Yes, the Gauhati High Court ruled the notification ultra vires due to the absence of a GST Council recommendation, and the Karnataka High Court also stayed adjudication orders based on this notification.

The Karnataka High Court stayed the recovery of erroneous refunds and dues arising from return mismatches, which were based on an order invoking the notification extending time limits for Show Cause Notices and Orders for FY 2019-20.