The legal validity of the contentious CGST Notification No. 56/2023 (“Notification“), is facing challenges across multiple High Courts in India. The Notification, issued by the Central Board of Indirect Taxes and Customs (CBIC), extended the timeline for passing orders under Section 73(10) of the Central Goods and Services Tax Act, 2017 (“CGST Act“) for financial years 2018-19 and 2019-20.
The Notification is under scrutiny for its alleged deviation from a key procedural requirement i.e. of obtaining the GST council’s recommendations in advance. While the CBIC claims administrative necessity, the courts have been divided on the legality of the move, sparking uncertainty across the GST ecosystem.
At the heart of the controversy lies Section 168A of the CGST Act, which allows the government to extend statutory timelines during periods of force majeure, provided such extensions are based on the GST Council’s recommendations. No GST Council meeting was held in November or December 2023 before issuing the Notification. Although the GST Council subsequently approved the recommendation made by the GST implementation committee at its June 22, 2024 meeting, the CBIC’s procedure was not in compliance with the requirements prescribed in the CGST Act. Legal challenges contend that a recommendation must precede any decision, and that a subsequent ratification cannot retroactively fulfil the statutory mandate. This distinction became a focal point in this litigation, with some Courts agreeing while others adopting a more pragmatic stance.
A key question in the debate is whether the pandemic can still be invoked as a force majeure event to warrant extensions under Section 168A of the CGST Act, and if so, for how long can either the taxpayers or the tax administrators use this reason. While the initial COVID 19 disruptions were indisputable, the situation turned contentious when subsequent delays were attributed to manpower shortages and other administrative challenges. This aspect has also been heavily debated, with different Courts taking opposite positions.
Yet another aspect to note is that some states have failed to issue corresponding notifications under their respective state GST legislations, such as in the case of Chhattisgarh. Due to absence of any such notifications, taxpayers have challenged the action of state tax officers to pass orders in the absence of time extensions. Such failures to extend limitations under state-specific GST laws also created further inconsistencies.
Legal controversy surrounding Notification: Conflicting HC rulings
The contrasting stances adopted by various High Courts (“HC“) have created an extremely inconsistent set of interpretations, leaving taxpayers and authorities in a state of uncertainty.
The legal quagmire surrounding the Notification offer critical insights, as can be seen through the following judicial pronouncements. The Hon’ble Gauhati HC found the Notification to be invalid by underscoring the legal differentiation between recommendations and ratifications. It noted that a recommendation is a proactive proposal, whereas a ratification is a retrospective approval.[1] The HC emphasised that the statutory framework of Section 168A of the CGST Act demands strict adherence to process, which cannot be circumvented in the name of administrative expediency. This decision highlights that procedural compliance is not merely a technicality but a safeguard against any arbitrary action. Further, w.r.t. to force majeure, the HC observed that as per Section 168A, it is central to extending timelines. While COVID19 pandemic is qualified as a force majeure, the HC frowned on the idea of it being used as a justification to seek further extensions on the grounds of manpower shortages or administrative delays. The HC also dismissed a subsequent review petition filed by the CBIC. [2]
On the other hand, the Hon’ble Telangana HC[3] upheld the Notification, reasoning that the language of Section 168A of CGST Act uses the term “in respect of actions,” which is very wide and permits extensions for force majeure induced delays. The COVID19 pandemic is one such event. The judgment also highlighted that extending timelines directly impacts the deemed conclusion of proceedings under Sections 73(10) and 75(10) of CGST Act, safeguarding both taxpayers and the exchequer from procedural ambiguities.
Adding another dimension, the Hon’ble Bihar HC[4] delved into the statutory implications of the Supreme Court’s orders during the pandemic. The Court affirmed that excluding the pandemic period from the limitation calculation effectively extended the timelines under Section 73(10) of CGST Act. The statutory limitation period for the financial years 2018-19 and 2019-20 were extended till April 30, 2024 and August 31, 2024 respectively due to the exclusion of the pandemic period (15.03.2020 to 28.02.2022) and this extension should be available equally to the taxpayers as well as tax authorities as well. . This nuanced interpretation of the Hon’ble Bihar HC not only harmonised statutory provisions with judicial directions, but also highlighted the importance of balancing administrative expediency with taxpayer rights.
It is also relevant to note that several HCs did not even admit the challenges posed by the taxpayers by claiming that the taxpayers have an alternative appellate remedy against an order or absence of a state notification did not question the vires of the Notification.[5]
These judicial pronouncements have far-reaching implications for the interpretation of Section 168A and the validity of various administrative notifications. These conflicting judgments have created a fragmented legal landscape, with significant implications for both taxpayers and the tax administrators. Taxpayers now face uncertainty about the validity of show-cause notices and adjudication orders issued under the extended timelines, raising concerns about retrospective liabilities. For the CBIC, an adverse ruling could undermine efforts to address the administrative backlogs and weaken its enforcement capabilities. Additionally, the legal wranglings over the Notification has brought into focus larger questions about the interplay between statutory mandates, administrative discretion, and procedural integrity within the GST framework.
Way Forward
The way forward hinges on the intervention of the Hon’ble Supreme Court, which is likely to be called upon to resolve the conflicting High Court rulings. A definitive ruling from the Supreme Court could pave the way for a more consistent and transparent tax regime. Until then, the legal debate over the interplay between recommendations, ratifications, and force majeure continues to evolve.
A definitive judgment will not only determine the fate of Notification but also establish important precedents for the interpretation of Section 168A and the broader principles governing extensions under the GST law. The ruling could have a cascading effect on pending assessments, litigation timelines, and the overall compliance environment within the GST regime. While there have been genuine administrative challenges, particularly in the aftermath of the pandemic, which calls for some flexibility to manage administrative delays without being bogged down, any step ultra vires the CGST Act should not be allowed.
For now, the GST ecosystem remains in a state of uncertainty, awaiting clarity from the judiciary.The uncertainty surrounding the Notification has created operational challenges for businesses, many of which are grappling with the dual pressures of retrospective liabilities and compliance ambiguities. The Government, too, faces the difficult task of defending its actions while ensuring that future extensions are grounded in robust legal and procedural frameworks. The Government may also consider amending Section 168A of the CGST Act to avoid similar disputes in future.
The case of this Notification serves as a stark reminder of the delicate balance between administrative flexibility and legal compliance in India’s evolving GST landscape. For taxpayers and practitioners alike, staying abreast of these developments remains crucial to navigating the evolving GST landscape.
For further information, please contact:
S.R. Patnaik, Partner, Cyril Amarchand Mangaldas
sr.patnaik@cyrilshroff.com
[1] M/s. Barkataki Print and Media Services and ors. v. Union of India and ors – 2024 (9) TMI 1398 -GAUHATI HIGH COURT.
[2] CBIC v. M/s. Barkataki Print And Media Services, 2025 (1) TMI 588 HC.
[3] M/s. Brunda Infra Pvt. Limited and Others v. The Additional Commissioner of Central Tax and Others 2025 (1) TMI 299
[4] M/s. Barhonia Engicon Pvt. Limited & Others v. The State of Bihar & Others, 2024 (12) TMI 440
[5] M/S. Abhiram Marketing Services Limited v. Union Of India, State Of Chhattisgarh, 2025:CGHC:1695 – DB.
