Gauhati High Court Quashes GST Limitation Extension Under Sec. 73(10)
In a landmark judgment, the Gauhati High Court has quashed Notification No. 56/2023 – Central Tax, which extended the time limit for issuing GST demand orders under Section 73(10) of the CGST Act. The reason? It violated constitutional and statutory mandates.
This blog breaks down what this ruling means for taxpayers, GST officers, and ongoing litigations.
What Was Notification 56/2023 About?
Issued by: CBIC
Dated: 28.07.2023
Purpose: Extended the time limit for FY 2017–18 demand orders under Section 73(10) from 30.09.2023 to 31.03.2024.
But the Gauhati HC in Mahabir Tiwari v. Union of India [2024] ruled this extension ultra vires (beyond legal power).
Why Did the Court Strike It Down?
The court laid out 3 core reasons:
- No Recommendation from GST Council
- Article 279A mandates that key GST decisions require GST Council recommendation.
- CBIC acted unilaterally, violating federal structure principles.
- No Force Majeure in 2023
- Earlier extensions (during COVID-19) were justified under force majeure.
- 2023 lacked any such exceptional situation. Hence, Section 168A couldn’t be invoked.
- Violation of Fiscal Federalism
- Tax legislation is a dual responsibility of Centre and States.
- Central overreach without Council nod is constitutionally impermissible.
Legal Provisions Cited
| Section | Purpose | Relevance |
|---|---|---|
| Sec. 73(10) | Prescribes time limits for GST demand orders | Extended by Notification 56/2023 |
| Sec. 168A | Allows time extensions during force majeure | Misused in this context |
| Art. 279A | Establishes GST Council framework | No Council nod = Notification invalid |
What This Means for Taxpayers
- Any GST order for FY 2017–18 issued after 30.09.2023 is likely invalid.
- Taxpayers can challenge such orders, citing Mahabir Tiwari v. UOI as precedent.
- Similar extensions in other fiscal years may also be vulnerable if issued without Council recommendation.
Expert Tip
“Before responding to any GST DRC-01 or demand notice, verify the issue date. If it falls after the original deadline without proper legal backing, challenge it.”
— Tax Litigation Consultant, Efiletax
Key Takeaways
- Gauhati HC upheld the sanctity of statutory deadlines.
- Notification 56/2023 is invalid — orders issued under it post-deadline stand quashed.
- Reinforces need for federal cooperation and legal safeguards in GST administration.
FAQ
Q1. Can this judgment apply across India?
While the decision is by Gauhati HC, other HCs may rely on it, especially in cases with similar facts.
Q2. What if I already paid the demand?
You may explore refund or legal remedies, but consult a tax professional.
Q3. Are extensions under Section 168A always invalid?
No. They are valid only when backed by force majeure and Council approval.
Summary
Gauhati HC quashes GST Notification 56/2023 extending Sec. 73(10) deadlines. Court cites lack of GST Council recommendation, absence of force majeure, and constitutional overreach. Taxpayers can challenge delayed demand orders. Case: Mahabir Tiwari v. UOI.
Final CTA
If you’ve received a delayed GST demand notice, our experts at Efiletax can help you respond, file replies, or challenge it legally.