In a recent landmark case, the Hon’ble Rajasthan High Court granted interim relief to the petitioner, challenging the validity of two crucial notifications issued under the CGST Act, 2017. The petitioner contended that the notifications, dated 31.03.2023 and 28.12.2023, issued under Section 168A of the CGST Act, 2017, were beyond the authority of the Central Government and constituted a “colourable exercise of power.” The case, argued by GMR Legal team, successfully secured interim protection for our client.
Case Background:
The petitioner challenged a demand order that was raised after a notice was issued to them on 29.12.2023. According to the petitioner, the notice was barred by limitation but was salvaged by the impugned notifications that extended the limitation period. The petitioner contended that these notifications were issued without proper jurisdiction, violating Section 168A of the CGST Act, 2017.
Key Arguments by Our Legal Team:
- Time-Barred Notice: Our team argued that the notice issued on 29.12.2023 was invalid as it was time-barred. The notifications dated 31.03.2023 and 28.12.2023 were the only basis for extending the limitation period, making the notice otherwise unenforceable.
- Exceeding Statutory Authority: The notifications were challenged on the ground that the Central Government exceeded its statutory authority in issuing them. Our argument emphasized that the government acted beyond its power under Section 168A of the CGST Act, 2017, which only grants limited scope for such notifications.
- Colourable Exercise of Power: One of the central contentions was that the notifications were issued “on the recommendations of the Council,” a phrase that suggested improper use of power. The vague nature of the reasoning behind these notifications was questioned, raising concerns about transparency and legality.
- Precedents from Other High Courts: We cited similar petitions that were pending in Allahabad, Gujarat, Punjab and Haryana, and Calcutta High Courts, all of which had granted interim relief in matters concerning similar CGST notifications. This strengthened our client’s position and underscored the broader judicial consensus. Court’s Observations:
In light of the substantial arguments presented by our team, the Court issued an interim order directing the respondents not to take coercive measures for enforcing the demand raised vide order dated 30.04.2024,until the final disposal of the petition.
This precedent bolstered our client’s position, reinforcing the claim that the Central Government lacked the statutory authority to issue the impugned notifications under Section 168A of the CGST Act.
Conclusion:
The interim relief secured in this case marks a significant victory, not only for our client but also for similar challenges pending across the country. By successfully arguing that the impugned notifications constituted a colourable exercise of power and exceeded the Central Government’s statutory authority, we set a strong precedent for future challenges to CGST notifications issued under Section 168A.
This case will be critical in shaping the legal landscape concerning the limits of government powers under the CGST Act, and we remain optimistic that the final decision will further underscore the importance of statutory limits and transparency in administrative actions.
