In a recent judgement, the Kerala High Court ( HC ) upheld the validity of GST notifications which extended the timelines for passing order under section 73 of Central Goods and Services Tax Act, 2017 (CGST Act) for financial year 2017-18.
As per the petitioner, the extension of time limit can only be notified under section 168A of CGST Act where the actions cannot be completed due to force majeure. The impugned notifications do not indicate any force majeure affecting the passing of order within the time stipulated by CGST Act.
It was observed by the high Court that the GST Council, in its 47th meeting, took note of the effect of the COVID-19 pandemic and agreed with the recommendation of the Law Committee. How much time could have been extended considering the pandemic is the discretion of the Executive, which has been taken based on the recommendation of the GST Council.
It was observed by the court that the Government is well within the power to extend the limitation for completing the proceedings and taking action under section 73 by issuing notification under Section 168A if there is force majeure.
Considering the situation with COVID-19, the time limit has been extended. In light of the circumstance the single bench of Justice Dinesh Kumar Singh held that the impugned notifications extending the time limit for passing orders under section 73 for FY 2017-18 are not ultra vires the provisions of Section 168A of the CGST Act.
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