When Tata Play Ltd. and a cluster of similarly placed assessees approached the Madras High Court, they were not merely contesting an executive delay they were questioning the boundaries of delegated legislative power of the GST regime. At the heart of the litigation laid two central tax notifications, namely Notification Nos. 9/2023 CT and 56/2023 CT. Both of which extended the timelines for issuance of show cause notices and adjudication orders under Section 73(10) of the CGST Act, 2017.
The government’s justification came soon. Stating that Section 168A, which empowers extensions in “force majeure” situations (unforeseeable events beyond a party’s control like natural disasters, epidemics or wars that prevent fulfilment of a legal or contractual obligation) was originally enacted during the COVID-19 pandemic.
The Crescendo
While these notifications might have seemed like benign administrative measures, their timing and justification raised a few red flags. By the end of 2023 the pandemic restrictions were long lifted yet the government continued to push statutory deadlines into 2024 for financial years 2017-18, 2018-19, and 2019-20.
Thus, the petitioners argued this was arbitrary, ultra vires, and fundamentally inconsistent with the intended exceptional use of Section 168A and the Supreme Court’s own Article 142 order which had already excluded the COVID period from limitation.
Key Legal Issues Before the Court
- Nature of Section 168A: Delegated or Conditional Legislation?
Petitioners asserted that Section 168A represents delegated legislation, which empowers the executive to legislate by notification but only in exceptional circumstances and within narrowly defined boundaries. Precedence was put upon Hamdard Dawakhana v. Union of India (AIR 1960 SC 554).Which emphasized that such powers must be exercised with procedural fairness, transparency, and rationality, and are subject to judicial review.
The respondents, however, saw Section 168A as conditional legislation where the government, upon identifying a force majeure, can act within a broader discretionary framework. Reliance was also put on High Court decisions notably from Telangana and Allahabad emphasizing judicial deference to executive policymaking.
- Exception to Section 73: Does 168A Require Strict Interpretation?
The primarily the matter was concerned to Section 73(10) provides clear limitation periods. Per which notices must be issued within 2 years and 9 months, and adjudication must be completed within 3 years.
Petitioners contended that Section 168A is an exception to this legislative framework and must be strictly construed. Only where tax actions “cannot be completed” due to actual impossibility not mere inconvenience can the government invoke this provision.
Respondents argued for a more realistically practical approach. They stated that pandemic-related challenges, including those of continued administrative backlog, justified their further extensions. They saw no such conflict in adapting procedural timelines to reality.
- Whether GST Council Applied Its Mind Properly
Petitioners claimed that the GST Council’s recommendation to extend the timelines was vitiated by non-consideration of critical facts, including:
• The Ministry of Personnel’s memo (06.02.2022) showing return to physical office,
• The MHA’s letter (22.03.2022) highlighting operational normalcy, and
• CAG Audit Reports from 2022 and 2024, indicating active departmental audits.
They argued the Council’s recommendation was uninformed and arbitrary. The Union of India contended that the Law Committee, in its 49th meeting, had sufficient operational inputs to inform the Council. Further, they argued the Court should not second-guess policy decisions or assess the quality of data inputs.
- Was GST Implementation Committee’s (GIC) Recommendation Sufficient?
The Notification 56/2023 was based on the recommendation of the GST Implementation Committee. It was then later ratified by the GST Council.
The Petitioners argued this violated Section 168A. As per which the notifications must be preceded by a valid recommendation from the GST Council itself, not ratified post facto. The GIC is only a sub-committee and cannot substitute the constitutional mandate under Article 279A.
Respondents in turn defended the procedure. They cited that the Council’s 17th meeting resolution, which authorized the GIC to handle urgent matters subject to Council ratification. They claimed this process was both valid and procedural.
- Does Section 168A Conflict with Supreme Court’s Article 142 Orders?
The Supreme Court’s suo motu orders, particularly in Jan 2022 under Article 142 excluded the pandemic period i.e., 15.03.2020 to 28.02.2022 from limitation computation for all judicial and quasi-judicial proceedings.
The petitioners further argued that the impugned notifications effectively narrowed the extended window granted by the Supreme Court. That by extending deadlines beyond and differently from what the SC directed, they reduced the scope of taxpayers’ protections.
The Union countered that Section 168A operates in a different domain it grants new extensions, while the SC order merely excludes days from existing limitation calculations. Both can co-exist, they claimed.
Petitioners’ Core Arguments Summarized
1. No Valid Force Majeure in 2023: The true cause for delay was departmental inefficiency, not external calamity.
2. Section 168A Demands Impossibility, Not Inconvenience: “Cannot be completed” implies strict impossibility, not administrative delay.
3. Council Did Not Apply Logic: Crucial documents which contrarily proved normalcy were ignored passing the notifications.
4. GIC Cannot Substitute the GST Council: That prior recommendation is mandatory, and post-facto ratification is invalid.
5. Notifications Erode SC Mandated Protections: By stretching timelines unilaterally, the executive undermined the Supreme Court’s limitation safeguard.
Respondents’ Defence in Summarised
1. Continuity from Earlier Notifications: The new notifications were not arbitrary but flowed from earlier ones like Notification 13/2022.
2. Lingering Pandemic Effects Justified Extensions: Due to auditor and staff shortages, and data backlog continued.
3. Policy Decisions Are Not for Courts: Judicial review should not intrude into executive and legislative function.
4. GIC with Ratification formed Valid Procedure: Delegated processes had prior approval and were legally sufficient.
5. No Conflict with SC Orders: Exclusion (SC) and extension (Sec 168A) operate in distinct spheres.
The Judgement
In its judgment dated 12 June 2025, the Madras High Court ruled in favour of the petitioners. By declaring that both Notification 9/2023 and 56/2023 were partially invalid for exceeding the scope of Section 168A and violating procedural safeguards.
1. Section 168A Is a Delegated Legislation and Not a Conditional Legislation –The Court held that Section 168A constitutes delegated legislative authority. Thus, it must be interpreted narrowly and strictly, as it permits departure from a statute’s general rule. Any extension must be based on a demonstrable force majeure.
2. Force Majeure Unproved for the Period in Question -The Court noted that by early 2022, both central and state administrative systems had resumed normal function. Thus, extensions for 2023 and 2024 were not justified as being due to a continuing force majeure. Thus, mere administrative backlog is not a force majeure.
3. GST Council’s Recommendation Was Procedurally Infirm–The Court found that key documents were not presented before the GST Council. Thus, the Council’s recommendation lacked informed application of mind, making the subsequent notifications vulnerable to judicial scrutiny.
4. GIC Recommendation Without Prior Council Approval held Invalid– The Court held that only the GST Council constituted under Article 279A, can recommend such extensions. A GIC recommendation which was followed by post-facto ratification is not a valid substitute. Therefore, Notification 56/2023 procedurally invalid.
5. Supreme Court’s Orders per Article 142 Remain Supreme –Finally, the Court affirmed that the Supreme Court’s exclusion orders remain supreme. They cannot be overridden, diminished, or altered by executive action under Section 168A. Any notification which is contrary to or less protective than the SC orders would be ultra vires.
Implications of the Judgement
This ruling now clearly sets down constitutional and procedural limits on how far the GST Council and Central Government can go when extending limitation periods:
1. Reaffirmation of taxpayer protection: from indefinite delay and ensuring that time limits must not be illusory; they ensure finality and fairness.
2. Restrains upon Misuse of Section 168A: The Executive cannot repeatedly or arbitrarily invoke force majeure without valid justification.
3. Strengthens Procedural Rigor in GST Council Operations: Recommendations must be evidence-based and contemporaneous and due process to be followed.
4. Preserves Judicial Primacy: Affirming that Article 142 orders from the Supreme Court cannot be undercut by any delegated legislation.
5. Gives Ground for Reopening Adverse Orders: Taxpayers served SCNs or adjudication orders relying on these invalid extensions may now challenge them for being time-barred i.e., within 8 weeks of the judgement.
Conclusion
This case thus marks an essential reaffirmation of constitutional discipline in tax governance. The Court clearly has refused to allow any administrative expedience to override the statutory precision. Though Section 168A remains valid law. The Court has emphasized its use must be exceptional and not routine.
The judgment is a timely reminder that even in complex tax frameworks like GST, the rule of law cannot yield to bureaucratic convenience despite circumstances. For the government, it’s a call to act with transparency and due diligence. For taxpayers, it’s a vindication of the legal system. The judgment is a timely reminder that even in complex tax frameworks like GST, rule of law cannot yield to bureaucratic convenience. For the government, it’s a call to act with transparency and diligence. For taxpayers, it’s a vindication of legal certainty.
Author: Apoorva Lamba (3rd Year Student Madhav Mahavidyalya,Jiwaji University,Gwalior)
Link to the complete judgement: https://indiankanoon.org/doc/196417143/
Link to similar articles: https://jpassociates.co.in/azure-hospitality-vs-phonographic-performance/
