Gauhati High Court Quashes GST Time Extension Notification for Lack of GST Council Approval

Case Name

Mahabir Tiwari v. Union of India & Ors.,(High Court of Gauhati)

WP(C) No. 567/2024

Date: 2nd June 2025

Key Takeaways

• GST Council’s Recommendation is Mandatory: The government cannot extend GST time limits under Section 168A of the CGST Act, 2017, without a formal recommendation from the GST Council.
• Force Majeure Requirement: Extensions under Section 168A must be justified by force majeure (unforeseen events like natural disasters or pandemics).
• Ultra Vires Notification: The court declared Notification No. 56/2023-Central Tax, dated 28.12.2023, as ultra vires (beyond legal power) and quashed it.
• Impact: All tax orders and show-cause notices issued based on this invalid notification for the relevant years are also quashed.
• Legal Principle: The case reinforces the importance of cooperative federalism and the constitutional role of the GST Council in India’s tax system.

Issue

Was the government’s extension of the GST time limit for issuing orders (via Notification No. 56/2023-Central Tax) valid, given it was done without the GST Council’s recommendation and without a force majeure event?

Facts

• Petitioner: Mahabir Tiwari, a businessman and registered GST assessee in Arunachal Pradesh.
• Respondents: Union of India, Central Board of Indirect Taxes and Customs, GST Council, and GST authorities.
• Timeline:
• The government extended the time limit for issuing GST orders for FY 2018-19 and 2019-20 via Notification No. 56/2023-Central Tax, dated 28.12.2023.
• Tiwari received a show-cause notice and a tax demand order based on this extension.
• Tiwari challenged the notification and the resulting tax order, arguing the extension was illegal.
• Key Law: Section 168A of the Central Goods and Services Tax Act, 2017, which allows the government to extend time limits only on the GST Council’s recommendation and only in case of force majeure (unforeseen events).

Arguments

Petitioner (Mahabir Tiwari)

• The extension of time was made without the GST Council’s recommendation, violating Section 168A of the CGST Act.
• There was no force majeure event justifying the extension.
• The notification and subsequent tax order are therefore invalid and should be quashed.

Respondents (Government & GST Authorities)

• The government acted within its powers.
• However, they acknowledged that a coordinate bench of the same court had already quashed the same notification in a similar case (WP© No. 3585/2024), and agreed the court could pass appropriate orders in this case as well.

Key Legal Precedents

• Section 168A, CGST Act, 2017: Allows the government to extend time limits for GST actions only on the recommendation of the GST Council and only in case of force majeure.
• V.M. Kurian v. State of Kerala (2001) 4 SCC 215: Supreme Court held that where a statute requires a “recommendation” from a specific authority, such recommendation is a sine qua non (essential precondition) for the government to act.
• Mohit Minerals Pvt. Ltd. v. Union of India: Supreme Court discussed the role of the GST Council and the binding nature of its recommendations, clarifying that while not all recommendations are binding, where the law requires action “on the recommendation” of the Council, such recommendation is mandatory.

Judgement

• Decision: The Gauhati High Court quashed Notification No. 56/2023-Central Tax, dated 28.12.2023, as well as the show-cause notice and tax order issued to Tiwari.
• Reasoning:
• The extension of time limits under Section 168A requires a recommendation from the GST Council and a force majeure event. Neither was present.
• The government’s notification was a “colourable exercise of power” (i.e., an abuse of power) because it falsely claimed to be based on the Council’s recommendation.
• The court followed its own earlier decision in WP© No. 3585/2024, which had already quashed the same notification for the same reasons.
• Order: The notification, show-cause notice, and tax order against Tiwari are all set aside and quashed.

FAQs

Q1: Why did the court quash the GST notification?

A: Because the government extended the time limit for issuing GST orders without the required recommendation from the GST Council and without a valid force majeure event, both of which are mandatory under Section 168A of the CGST Act.

Q2: What does “ultra vires” mean in this context?

A: “Ultra vires” means “beyond legal power or authority.” The court found the notification was issued without legal authority, so it was invalid.

Q3: What happens to other tax orders based on this notification?

A: Any tax orders or show-cause notices issued based on this invalid notification for the relevant years are also invalid and can be challenged and set aside.

Q4: Is the GST Council’s recommendation always binding?

A: Not always, but where the law specifically requires government action “on the recommendation” of the GST Council (like Section 168A), such a recommendation is mandatory before the government can act.

Q5: What is “force majeure” in GST law?

A: “Force majeure” refers to extraordinary events (like natural disasters, war, or epidemics) that prevent compliance with legal obligations. Extensions under Section 168A require such an event to justify the extension.

Q6: What is the significance of this judgment?

A: It reinforces the constitutional role of the GST Council and the principle of cooperative federalism in India’s GST regime. It also sets a precedent that the government cannot bypass statutory safeguards when extending tax deadlines.