In previous update (https://nityatax.com/section-73/), we apprised you that Central Government had issued Notification No. 9/2023-Central Tax dated March 31, 2023 in exercise of powers conferred under Section 168A of the CGST Act. Vide this Notification, the Central Government extended time limit for issuance of Show Cause Notice and passing of Orders for FY 2017-18 to FY 2019-20. We also apprised that Section168A allows extension of time limit specified in GST law only in case of force majeure events. As there was no force majeure event in March 2023, the Notification lacked statutory backing and was amenable to challenge before the Constitutional Courts. 

Vide this Outlook, we wish to apprise you that the said Notification was recently challenged before the Allahabad High Court in the case of Graziano Trasmissioni India Private Limited v. GST Council, WTAX No. 1256/2023. The Court has admitted this challenge and has directed department not to pass Order on the SCN issued.

NITYA Comments: Similar issue is also pending before the Gujarat High Court in the case of SRSS Agro Private Limited v. UOI, SCA No.  19720 of 2023 wherein the Court has issued Notice to Department. The Allahabad High Court has gone a step further and stayed adjudication of the SCN. 

This challenge has significant positive impact for taxpayers as it jeopardizes all SCNs issued beyond June 2023 (earlier limitation period) for FY 2017-18. If favourably decided, all such SCNs will become time barred. This is equally relevant for FY 2018-19 and FY 2019-20. 

We are pleased to share that NITYA Tax Associates held the brief and assisted Senior Advocate Mr. Rakesh Ranjan Agarwal who represented this case before the Allahabad High Court.