# M/S Graziano Trasmissioni v. Goods & Services Tax & Ors

- **Citation:** (2024) 5 ILRA 1670
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-05-31
- **Case number:** Writ Tax No. 1256 of 2023
- **Bench:** Saumitra Dayal Singh, Donadi Ramesh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-graziano-trasmissioni-v-goods-services-tax-ors-52015
- **Pages:** 48

## Headnote

A. Law of Taxation- Section 168A of the
Central Goods and Service Tax Act, 2017
and the U.P. Goods and Service Tax Act,
2017- Notification issued under these
provisions- extending the time granted to
Adjudicating
Authorities
to
pass
adjudication orders challenged - Sections
44, and 73 of the Act- Taxation and Other
Laws (Relaxation of Certain Provisions)
Ordinance, 2020 (hereinafter referred to as
'TOLO').

B. Section 168A of both Acts- conditional
legislation to arise at the hands of the
delegate of the principal legislature-
Central
Government
and/or
St.
Government- Power under Section 168A is
legislative
and
not
administrative
or
executive- Discretion to extend limitation
vested
in
the
Principal
Legislature-
Delegation
made
canalised-
Strict
conditions laid down for exercise of special
powers- Impugned notifications issued
after due deliberation on the material on
record-
existence
of
circumstance
validating the exercise of power cannot be
ruled out- All tests necessary for exercise
of power under Section 168A stood
satisfied.(Para 96, 97, 103. 111, 116, 117
and 119)

Held:
Coming to the submissions, we note, broadly the
submissions have been advanced as to the
validity of the action taken. Though worded
differently by two Senior counsel for the
petitioners, principally, it has been contended,
the Central Government and the St. Government
could not have acted independent to the
conditions of the delegation made under Section
168A of the Central Act and the St. Act. To the
extent the nature of power vested thereunder is
concerned, we find ourselves in agreement with
the principle that the said sections provide for
conditional legislation to arise at the hands of the
delegate of the principal legislature i.e. the
Central Government and/or the St. Government.
(para 96)

Also, as to the submission that the said provision
authorizes the delegate to act in special
circumstances and not by way of general power
to be exercised to remove difficulty, we find
ourselves in agreement with that submission
advanced by learned counsel for the petitioners.
Thus, in contrast to Section 172 of the Central Act
and the St. Act, powers under Section 168A of
the Act, may be exercised: (i) On the
recommendation made by the Council; (ii) By
issuance of notification to extend the time
limitation specified or prescribed or notified
under the Central Act and the St. Act; (iii) In
respect of actions which cannot be completed or
complied, (iv) Due to "force majeure". (Para 97)

In the first place, the powers under Section 168A
of the Act is legislative and not an administrative
power. While submissions have been advanced
by some of learned counsel for the petitioners
suggesting, the power under Section 168A of the
Act was an administrative or executive power, at
the same time, as submitted by Sri Mahajan,
there can be no doubt as to the true nature of
that power. Prescription of limitation to perform
an action is a p

## Text

_Characters 0–39,846 of 165,471. This is a partial read: ask again with offset=39846 for what follows._

1670 INDIAN LAW REPORTS ALLAHABAD SERIES
determine
its
jurisdiction
within
the
confines of the arbitration agreement and
applicable law. The authority of arbitral
tribunals to correct, interpret, or supplement
their awards does not extend to revisiting the
merits of the dispute or reconsidering
substantive issues that have already been
decided. Arbitral tribunals are bound by the
principle of functus officio, which holds that
once an award has been rendered, the
tribunal's jurisdiction over the dispute is
terminated, and it lacks authority to revisit
or modify its decision in absence of specific
statutory provisions to the contrary.

9. The Arbitrator in the instant case
erred in passing the awards dated December 27,
2019, May 19, 2020 and May 28, 2020 since no
statutory authority empowers the arbitral
tribunal to review/modify its award. Therefore,
the said orders are void ab initio and deserve to
be set aside.

10. Section 34 Court despite noting that
such recall and modification by the Arbitrator
was beyond the statutory confines and improper,
proceeded to dismiss the application:

 "From the above provisions, it is
amply clear that the learned Arbitrator has got
no power to review his award. The learned
Arbitrator/District Magistrate, Mau firstly
reviewed the award date 15.03.2018 by passing
the order dated 27.12.2019 without hearing the
opposite parties and on the application filed by
the
opposite
parties,
the
learned
Arbitrator/District
Magistrate,
Mau
has
recalled the order dated 27.12.2019 by his order
dated 28.05.2020, which is improper, but the net
result is that award dated 15.03.2018 is
revived."

11. This raises important questions
regarding the role of judiciary in overseeing
arbitral proceedings and ensuring compliance
with the principles of arbitration law. While
courts generally afford deference to arbitral
tribunals and uphold the finality of arbitral
awards, they also have a duty to intervene when
arbitrators exceed their authority or act
improperly. In this case, the Section 34 court's
decision to dismiss the application without
addressing the arbitrator's improper actions may
be seen as a missed opportunity to uphold the
integrity of the arbitral process.

12. For the reasons discussed above,
this Court, in exercise of its power under Section
37 of the Arbitration Act sets aside the order
dated November 5, 2020 passed by the District
Judge, Mau and the awards dated December 27,
2019, May 19, 2020 and May 28, 2020.

13. Furthermore, this Court directs the
Arbitrator appointed by the Central Government
under the Act to decide the matter de novo within
a period of six months from the date of
production of a certified copy of this order before
him. The Arbitrator is directed to take into
account the order dated March 15, 2018 and the
report submitted pursuant to the same.

14. With the aforesaid direction, the
appeal is allowed.
----------
(2024) 5 ILRA 1670
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 31.05.2024

BEFORE

THE HON'BLE SAUMITRA DAYAL SINGH, J.
THE HON'BLE DONADI RAMESH, J.

Writ Tax No. 1256 of 2023
with other connected cases

M/S Graziano Trasmissioni ...Petitioner
Versus
Goods & Services Tax & Ors.
 ...Respondents
5 All. M/S Graziano Trasmissioni Vs. Goods & Services Tax & Ors.
1671
Counsel for the Petitioner:
Vinayak Mithal

Counsel for the Respondents:
A.S.G.I., C.S.C., Gaurav Mahajan, Naveen
Chandra Gupta

A. Law of Taxation- Section 168A of the
Central Goods and Service Tax Act, 2017
and the U.P. Goods and Service Tax Act,
2017- Notification issued under these
provisions- extending the time granted to
Adjudicating
Authorities
to
pass
adjudication orders challenged - Sections
44, and 73 of the Act- Taxation and Other
Laws (Relaxation of Certain Provisions)
Ordinance, 2020 (hereinafter referred to as
'TOLO').

B. Section 168A of both Acts- conditional
legislation to arise at the hands of the
delegate of the principal legislature-
Central
Government
and/or
St.
Government- Power under Section 168A is
legislative
and
not
administrative
or
executive- Discretion to extend limitation
vested
in
the
Principal
Legislature-
Delegation
made
canalised-
Strict
conditions laid down for exercise of special
powers- Impugned notifications issued
after due deliberation on the material on
record-
existence
of
circumstance
validating the exercise of power cannot be
ruled out- All tests necessary for exercise
of power under Section 168A stood
satisfied.(Para 96, 97, 103. 111, 116, 117
and 119)

Held:
Coming to the submissions, we note, broadly the
submissions have been advanced as to the
validity of the action taken. Though worded
differently by two Senior counsel for the
petitioners, principally, it has been contended,
the Central Government and the St. Government
could not have acted independent to the
conditions of the delegation made under Section
168A of the Central Act and the St. Act. To the
extent the nature of power vested thereunder is
concerned, we find ourselves in agreement with
the principle that the said sections provide for
conditional legislation to arise at the hands of the
delegate of the principal legislature i.e. the
Central Government and/or the St. Government.
(para 96)

Also, as to the submission that the said provision
authorizes the delegate to act in special
circumstances and not by way of general power
to be exercised to remove difficulty, we find
ourselves in agreement with that submission
advanced by learned counsel for the petitioners.
Thus, in contrast to Section 172 of the Central Act
and the St. Act, powers under Section 168A of
the Act, may be exercised: (i) On the
recommendation made by the Council; (ii) By
issuance of notification to extend the time
limitation specified or prescribed or notified
under the Central Act and the St. Act; (iii) In
respect of actions which cannot be completed or
complied, (iv) Due to "force majeure". (Para 97)

In the first place, the powers under Section 168A
of the Act is legislative and not an administrative
power. While submissions have been advanced
by some of learned counsel for the petitioners
suggesting, the power under Section 168A of the
Act was an administrative or executive power, at
the same time, as submitted by Sri Mahajan,
there can be no doubt as to the true nature of
that power. Prescription of limitation to perform
an action is a pure legislative function. In absence
of any doubt thereto, the extension of limitation
prescribed by law also remains legislative. The
power to condone delay may be granted both to
the executive and the judicial bodies, at the same
time, the prescription in law, as to limitation
remains exclusively, a legislative function. (Para
103)

Next, we have to examine, if that consideration
was enough and if it satisfied any further test laid
down in Section 168A of the Central Act and the
St. Act. Here, we are unable to accept the
submission advanced by learned counsel for the
petitioner that there were mere difficulties faced
by the revenue authorities in conducting scrutiny
and audit. The period 15.03.2020 to 28.02.2022
remains the darkest period of our recent past,
arising after the second World War. No calamity
of equal magnitude has disrupted human life
since then. In the context of a global village, that
our world has become, the pandemic COVID-19
disrupted
all
human
activities
across
all
continents and left no strata of the society,
1672 INDIAN LAW REPORTS ALLAHABAD SERIES
organisation or institution or other entity,
unaffected over a long duration of time. The full
impact of the COVID-19 is still to be assessed.
(Para 111)

It is equally admitted and undeniable to the
petitioners that the time kept ticking and hard as
the times were and despite continuance of the
extreme
circumstances
and
disablement
accompanying, caused by COVID-19, life moved
on. Economic activity was witnessed. Businesses
continued to exist, resulting in Monthly and
Annual Returns being filed both for the entire
duration of time through which COVID-19
pandemic spread (in waves), and continued to
disable human activity. Thus, Annual Returns
came to be filed for the subsequent F.Ys. 201819 and 2019-20 as well. All such returns
remained subject to scrutiny and audit. It is that
volume of work that has been taken note of and
considered in the 47th and 49th meetings of the
Council. With reference to that work, legislative
decisions have been made, in the backdrop of the
disruption caused by the pandemic COVID-19.
(Para 116)

Also, we are also unable to accept the submission
advanced by learned counsel for the petitioners
that the process of framing adjudication order is
independent of scrutiny and audit of Annual
Returns. To offer that construct to the language
of Section 73(1) would be over-simplistic. It is
true that Central Act and the St. Act specifically
do not contemplate existence of limitation for
prior scrutiny and audit, at the same time Section
61 of Central Act and the St. Act provides that a
Proper Officer may scrutinise the return, verify its
correctness and, inform the registered person of
the discrepancies noticed. If the explanation
thereto is found acceptable, no further action is
contemplated. (Para 117)

To us, the above discussion is enough to
persuade us to the conclusion that scrutiny and
audit of Annual Returns is inherently linked to and
is not independent of adjudication proceedings
under Section 73 of the Central Act and the St.
Act. Though the Proper Officer may remain
authorised to act under Section 73 of the Central
Act and the St. Act independent of an audit and
scrutiny at the same time that outcome would be
dictated by facts of an individual case but not by
way of a principle in law. In the entire scheme of
the Central Act and the St. Act, by way of
procedure, steps contemplated under Section 61
and 65 would remain a normal occurrence. By
very nature and by virtue of specific provisions of
the Central Act and the St. Act, those would have
to precede action under Section 73 of those
enactments. (Para 119)

C. Force majeure- as used in Section 168A
of the Act- depends on the subjective
satisfaction of the legislative body- no
judicial review possible-no illegality in the
impugned
notifications-
Petition
dismissed. (Paras 124, 129, 132 and 138)

HELD:
What then requires consideration is - if the words
due to "force majeure" would include the period
of time during which no lockdown may have been
declared or during which human/economic
activities may not have been specifically
disrupted, by issuance of appropriate orders
under the Disaster Management Act, 2005 etc.
First, in the context of a legislative function, the
writ Court sitting in judicial review may not look
to test the subjective satisfaction of the
legislative body or its delegate to see if the law
made had the exact/measurable fact justification,
for its enactment. The legislative wisdom must
remain insulated from that judicial query. Under
the Constitutional scheme of division of powers,
Courts may never be enthusiastic and may
remain disinclined
to test the subjective
satisfaction of legislatures in enacting laws. In
fact, the Courts are neither equipped nor they are
expected to undertake that exercise. (Para 124)

The submission that the issuance of the
impugned notifications are pre-judicial to the
rights and interest of the tax payers does not find
our acceptance in the context of the discussion
made above. A legislative action cannot be
complained of as being prejudicial on account of
extension of limitation. Limitation, though
statutory, is not a pre-existing vested right of any
party. It gets created and extinguished in
accordance with the statutory law. Insofar as the
statutory
law
prescribes
a
limitation,
no
argument may arise against such prescription
made. Further, in the case of conditional
legislation, the submission that it is not peripheral
but substantive also looses its relevance in face
of conditions seen fulfilled. (Para 129)
5 All. M/S Graziano Trasmissioni Vs. Goods & Services Tax & Ors.
1673
We also are not convinced that there was any
statutory mandate to provide for only short
extensions of time or limited extensions of times.
Suffice to note, if the COVID-19 pandemic had
continued beyond the third wave (as experienced
in our country), that argument would never arise.
To the extent that argument arises on hindsight
wisdom, and past actions were dictated by nature
as were beyond the control of human beings, it
would be erroneous to infer a legislative intent
based on the experience gained on the strength
of initial remedial actions taken by the executive
and the legislative bodies, in response to the
spread
of
the
pandemic
COVID-19.
The
argument is neither sustainable in law nor on the
facts. As to the submission of repeated
notifications being issued, again that fell within
the domain of legislative wisdom. How the
legislature perceived the situation at a given
time, and what response it offered may never be
a justiciable issue. Suffice to conclude, inherent
indication exists that initially the legislature
treated the COVID-19 pandemic circumstance to
be temporary as may pass in a short while. 64 of
70
However
on
its
continuance,
further
extensions may have been felt desirable. Insofar
as the power vested under Section 168A is not
shown to be a power that may be exercised once
as get exhausted upon that exercise made, the
legislative wisdom to issue a further notification,
would always survive. (Para 132)

Seen in that light the decisions cited by learned
counsel for the petitioners are found to be
distinguished. The writ petitions challenging the
issuance of the impugned notifications must fail.
Hearing
of
all
cases
where
adjudication
proceedings are pending may recommence and
be concluded, after excluding the duration of stay
of the extended limitation to frame the
adjudication order. Wherever adjudication orders
have been passed and recovery stayed by this
Court, the petitioners shall have 45 days from
today to file appropriate appeals. (Para 138)

Petition dismissed. (E-14)

List of Cases cited:

1. Re: Cognizance for Extension of Limitation
(Miscellaneous Application No. 408 of 2022 and
connected matter)

2. S. Kasi Vs St. through Inspector of Police,
Samaynallur Police Station, Madurai District;
(2021) 12 SCC 1

3. M/s Rungta Mines Ltd. Vs St. of Jharkhand,
(2023)VIL-525-JHR

4. U.O.I. & anr. Vs Mohit Minerals Pvt. Ltd. (2022)
10 SCC 700

5. Energy Watchdog Vs Central Electricity
Regulatory Commission & ors., (2017) 14 SCC 80

6. Eastern Coalfields Limited Vs Sanjay Transport
Agency & anr., (2009) 7 SCC 345

7. Satyendra Kumar Mehra alias Satendera Kumar
Mehra Vs St. of Jharkhand, (2018) 15 SCC 139

8. St. of Uttar Pradesh Vs Sudhir Kumar Singh &
anr., AIR (2020) SC 5215

9. Independent Schools' Association, Chandigarh
(Regd.) & ors. Vs U.O.I. & ors., (2022) 14 SCC
387

10. Lachmi Narain & ors. Vs U.O.I. & ors., (1976)
2 SCC 953

11. Tata Housing Development Com. Ltd. Vs
Aalok Jagga & ors., (2020) 15 SCC 784

12. Hamdard Dawakhana (Wakf) Lal Kuan, Delhi
& anr. Vs U.O.I. & ors., AIR 1960 SC 554

13. St. of T. N. Vs K. Sabanayagam & anr., (1998)
1 SCC 318

14. S.R. Bommai Vs U.O.I., AIR 1994 SC 1918

15. Shayara Bano Vs U.O.I., (2017) 9 SCC

16. Geeta Vs St. of U.P. & ors., (2010) 13 SCC 678

17. Dhanrajamal Gobindram Vs Shamji Kalidas &
Co., AIR 1961 SC 1285

18. Dwarika Prasad Sahu Vs St. of Bihar & ors.,
AIR 1975 SC 134

19. St. of Mysore Vs P.R. Kulkarni & ors., AIR 1972
SC 2170
1674 INDIAN LAW REPORTS ALLAHABAD SERIES
20. D.C. Wadhwa & ors. Vs St. of Bihar & ors.,
(1987) 1 SCC 378

21. Krishna Kumar Singh & anr. Vs St. of Bihar &
ors., (2017) 3 SCC

22. Collector (District Magistrate), Allahabad Vs.
Raja Ram Jaiswal, AIR 1985 SC 1622

23. St. of Punjab Vs Gurdial Singh & others,
(1980) 2 SCC 471

24. Kalabharati Advertising Vs Hemant Vimalnath
Narichania & ors., AIR 2010 SC 3745

25. Writ-Tax No. 330 of 2024 (M/S Tata Projects
Limited Vs U.O.I. & ors.

26. St. of Tamil Nadu Vs P. Krishnamurthy & ors.,
(2006) 4 SCC 517

27. All India Bank Officers Configuration Vs
Regional Manager, C.B.I., Neutral Citation (2024)
INSC 389

28. Naresh Chand Agarwal Vs Institute of
Chartered Accountants of India, Neutral Citation
2024 INSC 94

29. Reckitt Benckiser India Pvt. Ltd. Vs U.O.I.
(2024) GSTL 113 (Del),

30.
Faizal
Traders
Pvt.
Ltd.
Vs
Deputy
Commissioner Central Tax & anr., Neutral
Citation: 2024 KER10314

31. Super Agrotech Ltd. Vs St. of U.P. & ors.,
(2006) 9 SCC 203

32. Vivek Narayan Sharma & ors. Vs U.O.I. & ors.
(2023) 3 SCC 1

(Delivered by Hon'ble Saumitra Dayal
Singh, J. & Hon'ble Donadi Ramesh, J.)

1. Heard Sri Rakesh Ranjan Agarwal
learned Senior Counsel assisted by Sri
Suyash Agarwal, Sri Divyanshu Agarwal
and Sri Vinayak Mittal, Sri Shambhu
Chopra learned Senior Counsel assisted by
Sri Rajnish Tripathi, Sri Praveen Kumar, Sri
Nishant Mishra, Sri Atul Gupta, Sri Abhinav
Mehrotra, Sri Venkat Prasad Pasupaleti
(through video conferencing) and Sri Ayush
Mishra, learned counsel for the petitioner,
Sri S.P. Singh, learned ASGI assisted by Sri
N.C. Gupta and Sri Gopal Verma, Sri Anant
Tiwari, Sri O.P. Mishra, Sri K.J. Shukla, Sri
Chandra Prakash Yadav and Sri Arvind
Kumar Goswami learned counsel for the
Union of India and Goods & Service Tax
Council, Sri Gaurav Mahajan learned Senior
Standing Counsel, Sri Amit Mahajan
learned Senior Standing Counsel, Sri
Krishna Agarwal learned Senior Standing
Counsel and Sri Parv Agarwal learned
Senior Standing Counsel for the Central
Board of Indirect Taxes and Customs, Sri
Nimai Das, learned Additional Chief
Standing Counsel and Sri Ankur Agarwal
learned Standing Counsel for the State-GST
authorities.

2. Challenge has arisen to Notification
No. 09/2023-Central Tax (CGST) dated
31.3.2023 issued by the Government of
India and Notification No. 515/XI-2-23-9
(47)/17-T.C.215-U.P.Act-1-2017-Order-
(273)-2023 dated 24.4.2023 issued by the
State Government under Section 168A of
the Central Goods and Service Tax Act,
2017 (hereinafter referred to as 'the Central
Act') and the U.P. Goods and Service Tax
Act, 2017 (hereinafter referred to as 'the
State Act') respectively, insofar those
Notifications seek to extend the time granted
to the Adjudicating Authorities to pass
adjudication orders with reference to
proceedings for the F.Y. 2017-18. That
challenge is involved in the following writ
petitions:

Sl.
No.
Writ
Tax
Number
Party
Name
Financi
al Year
5 All. M/S Graziano Trasmissioni Vs. Goods & Services Tax & Ors.
1675
1.
132 of 2024 Ms
MJ
Corporatio
n
Vs.
Goods And
Service
Tax
Council
And
4
Others
2017-18
2.
134 of 2024 Ms
Rki
India
Limited
And
Another
Vs. Union
Of
India
And
3
Others
2017-18
3.
1393 of 2023 U.P.
Ceramics
Potteries
Pvt Ltd Vs.
Good and
Service
Tax and 5
Others
2017-18
4.
1450 of 2023 M/s
Savi
Interiors
and
Another
Vs. Union
of
India
and
2
Others
2017-18
5.
177 of 2024 Devendra
Pratap
Singh Vs.
Goods And
Service
Tax And 4
Others

2017-18
6.
224 of 2024 Atul Tyre
House Vs.
Goods And
Service
Tax
Council
And
4
Others
2017-18
7.
375 of 2024 M/D New
Manish
Surgical K
61/115
Saptsagar
Vs. Goods
And
Service
Tax
Council
Through
The
Secretary
Gst
Council
And
4
Others
2017-18
8.
456 of 2024 M/S
Haji
Nabi
Bakash
Mohd
Saleem Vs.
Goods And
Service
Tax
Council
And
4
Others
2017-18
9.
46 of 2024
Civil Lines
E. K. Road
Meerut,
Meerut
Uttar
Pradesh
250001
2017-18
1676 INDIAN LAW REPORTS ALLAHABAD SERIES
Through Its
Finance
Controller
Mr Ramesh
Chandra
Vs. Goods
And
Service
Tax
Council
And
4
Others
10.
460 of 2024 M/S Vinod
Kumar Rai
Vs.
State
Of Up And
2 Others
2017-18
11.
80 of 2024
Ms
Lg
Electronic
India
Pvt
Ltd
Vs.
State Of Up
And
2
Others
2017-18
12.
825 of 2024 M/S
Yuvaan
Enterprises
Vs. Goods
And
Service
Tax
Council
And
4
Others
2017-18
13.
522 of 2024 M/S
Tara
Products
And
Services
Private
Limited
Vs. Goods
And
Service
2017-18
Tax
Council
And
4
Others
14.
548 of 2024 M/S
Vds
Contractor
Vs. Goods
And
Service
Tax
Council
And
5
Others
2017-18
15.
597 of 2024 M/S Mani
Electricals
Vs. Goods
And
Service
Tax
Council
And
4
Others
2017-18
16.
841 of 2024 M/S
Neptune
Suppliers
Private
Limited
Vs. Goods
And
Service
Tax
Council
And
4
Others
2017-18
17.
897 of 2024 M/S
Subhash
Infraengine
ers
Pvt.
Ltd.
Vs.
Union
Of
India And 4
Others

2017-18
5 All. M/S Graziano Trasmissioni Vs. Goods & Services Tax & Ors.
1677
18.
902 of 2024 M/S
Subhash
Infraengine
ers Pvt Ltd.
Vs.Union
Of
India
And
4
Others
2017-18

3. By earlier order, we had
consolidated the above described and other
petitions raising same and/or similar
challenge. Since, only legal issues are
involved, Counter Affidavits were required
to be filed by the respondents in the lead
case i.e. Writ Tax No. 1256 of 2023 (M/S
Graziano Trasmissioni India Pvt. Ltd. Vs.
Goods And Services Tax And 5 Others).
Copy of those Counter Affidavits were
directed to be circulated to all counsel for
the petitioners, in individual petitions. Also,
permission was granted to individual
counsel for the petitioners-to serve their
Rejoinder Affidavits, treating the Counter
Affidavit circulated in the lead case to be the
Counter Affidavit filed in their individual
cases. Thus, pleadings have been exchanged
between the parties, on deemed basis.

4. During the course of hearing, it was
pointed out that other challenges are also
involved in some of the other petitions. Thus
reference has been made to challenge raised
to adjudication proceedings/orders for F.Y.
2017-18, on other grounds including ground
as to adjudication order exceeding the show
cause notice; principles of natural justice
having
been
violated;
rectification/correction of GSTR-3B etc.
Yet other petitions have laid challenge to
similar Notifications issued for the F.Y.
2018-19. In those cases, legal grounds of
challenge have been described to be
different. Another petition has been filed
involving challenge to the validity of
Section 168A of the Central Act.

5. In view of the varied challenge
raised in some individual petitions, at the
suggestion of the bar, we have confined the
hearing (at present), to writ petitions
involving challenge to Notification No. 09
of 2023 dated 31.03.2023 issued by the
Central Government and Notification No.
515 issued by the State Government on
24.04.2023
(hereinafter
collectively
described
as
the
time
extension
Notifications) issued for the F.Y. 2017-18.
Petition raising challenge to validity of
Section 168A has been segregated. Those
may be heard later. Also, petitions involving
challenge to the time extension Notifications
relevant to the F.Y. 2018-19, may be heard
separately.

6. Insofar as present batch of petitions
is concerned, earlier Section 44 (of the
Central Act and the State Act) prescribed
that the Annual Return may be filed by 31st
day of December following the end of the
relevant Financial Year. Thus, for the F.Y.
2017-18 the Annual Return could be filed
till 31 December 2018. By virtue of Section
73(10) of the Central Act and the State Act,
the Proper Officer could issue an order of
adjudication under sub-Section (9) of that
Section, within three years from the due date
of furnishing of Annual Return. For F.Y.
2017-18 such order order could be passed
upto 31 December 2021. Also, under
Section 73(3) of the Central Act and the
State Act, the mandatory notice preceding
an adjudication order [contemplated under
Section 73(10) of the Act], could be issued
not later than three months prior to the last
date on which the Adjudication Order may
be passed. Therefore, for the F.Y. 2017-18
such notice could be issued not later than 30
September 2021.
1678 INDIAN LAW REPORTS ALLAHABAD SERIES

7. It is a fact, F.Y. 2017-18 (July, 2017
to March, 2018) was the first year under the
GST regime. It is a matter of common
knowledge that the revenue authorities and
the tax payers alike, faced numerous
difficulties in complying the new law.
Therefore, the time for making compliances
was extended and relaxations were granted
by the Government, from time to time. It is
on record - vide Notification dated
03.2.2020 issued under Section 44 (as it then
existed) read with Rule 80 of the Rules
framed under the Central Act, the last date
for filing Annual Return for the F.Y. 201718 was extended - for the State of Uttar
Pradesh, till 07 February 2020. Similar
Notification No. 509 dated 05.02.2020 was
issued by the State Government under the
State Act. Correspondingly by operation of
law, the time limitation contemplated under
Section 73(10) of the Central Act and the
State Act stood extended upto 06 February
2023. Also, correspondingly the time period
for issuance of notice, by the Proper Officer
(for that F.Y.), stood extended upto 08
November 2022. It is also a fact, just after
the expiry of the last date for filing return for
F.Y. 2017-18 expired on 07.2.2020, the
country was hit by the first wave of the
pandemic COVID-19, resulting in complete
lockdown being declared, from 25 March
2020.

8. While the Parliament was not in
session,
the
President
promulgated
Taxation and Other Laws (Relaxation of
Certain Provisions) Ordinance, 2020
(hereinafter referred to as 'TOLO'). It was
published in the Gazette of India on
31.03.2020. In the first place, by virtue of
Section 3 of TOLO, the time limits
specified, prescribed or notified under
specified Acts (under that Section) were
relaxed. However, the Central Act and the
State Act were not included therein. Then,
by Section 8 of TOLO, a new Section
168A was introduced to the Central Act,
granting powers to the Central to issue
appropriate
notification,
on
the
recommendations of the Goods and
Service Tax Council (hereinafter referred
to as 'the Council'), to extend the time
limit specified, prescribed nor notified
under the Central Act (as the case may be)
in respect to 'actions' that 'cannot' be
'completed' or 'complied', 'due to force
majeure' circumstance. The Explanation
to the new section explained the meaning
of 'force majeure'. It is also a fact that
TOLO was replaced with Taxation and
Other Laws (Relaxation and Amendment
of
Certain
Provisions)
Act,
2020
(hereinafter referred to as 'the TOLA'),
enforced with effect from 31 March 2020.
It contained provisions similar to TOLO.
For our purpose, in material parts, TOLA
is the mirror image of TOLO. Similar
amendments were made to the State Act.

9. Acting under Section 168A of the
Central Act, first, Notification No. 35/2020
was issued by the Central Board of Indirect
Taxes and Customs (hereinafter referred to
as 'the CBIC'), dated 03 April 2020. In
short, it provided, amongst others, extension
of time upto 31.08.2020 with respect to
actions for which the time limit for
completion or compliance by any authority
fell during the period 20 March 2020 - 30
August 2020. A similar Notification was
issued by the State Government being
Notification No. 445 dated 11.05.2020.
Later, another Notification No. 14/2021Central Tax, dated 01 May 2021 was issued
under Section 168A of the Central Act
providing for similar extension of time, to
perform acts that were required to be
performed during 15 April 2021-29 June
2021
upto
30
June
2021.
It
was
complemented by similar Notification No.
5 All. M/S Graziano Trasmissioni Vs. Goods & Services Tax & Ors.
1679
496 dated 28.06.2021, issued by the State
Government, under the State Act.

10. Later, vide Notification No.
13/2022-Central Tax dated 05 July 2022,
issued by the Government of India, (acting
through the CBIC) under Section 168A of
the Central Act, extended the time limit
specified under Section 73(10) of the
Central Act for F.Y. 2017-18, upto 30
September 2023. Parallel notification was
issued by the State Government being
Notification No. 596, dated 21.7.20222
providing for similar extension of time.
These
notifications
have
not
been
challenged.

11. Last, vide Notification No. 9/2023
dated 31.03.2023 issued by the Government
of India through the CBIC, the time
limitation prescribed under Section 73(10)
of the Central Act for F.Y. 2017-18, was
extended upto 31.12.2023. A parallel
notification came to be issued by the State
Government Notification No. 515 of 2023
dated
24.04.2023,
granting
similar
extension of time under the State Act. These
notifications have also arisen under Section
168A of the Central Act and the State Act.
Challenge has been laid only to this last set
of Notifications dated 21.03.2023 (issued by
the Central Government) and 24.04.2023
(issued by the State Government).

12. In the context of the above, Sri Rakesh
Ranjan Agarwal, learned Senior Advocate has
first pointed out that all petitioners had filed
their Annual Returns before the last extended
date for filing annual returns for F.Y. 2017-18
i.e. 07.02.2020. The marginal note appended to
Section 168-A of the Act reads: "Power of
Government to extend time limit in special
circumstances." Thus, it has been pointed out
that blanket extension of time was not
contemplated to be granted. The legislature did
not intend to grant blanket power to the
Government to extend the limitation of time.
Contrasting the newly added provision with
Section 172 of the Central Act and the State
Act, it has been submitted, the general power to
grant such extension conferred in Section 172
is subject to the direct check of the legislature,
inasmuch as the Government seeking to
exercise that power would have to lay and thus
seek approval of its 'general order' by the
respective legislative body. Thus, it was neither
contemplated by the legislatures nor it could be
construed that there was any extension of time
contemplated or permitted to be granted to file
either the Annual Return for F.Y. 2017-18
beyond the date 07.02.2020, or to pass an
adjudication order beyond 06.02.2023.

13. Second, it has been pointed out,
Notification No. 14 of 2021 dated 01.05.2021
did not cause any effect on the limitation to pass
the adjudication order for F.Y. 2017-18,
inasmuch as the period of limitation that was
extended upto 30.06.2021 was only with
respect to acts that could not be completed or
complied during the period 15.03.2020 to
20.08.2020. Even the requirement of filing of eway bill was not relaxed. Benefits were
contemplated and granted with respect to
completion of other proceedings (by the
revenue authorities) and filing of appeals (by
the assessees).

14. Third, it has been pointed out that
Notification No. 13 of 2022 and 596 of 2022
have not been challenged as despite that
extension of time granted under Section
168-A of the Central Act and the State Act
qua adjudication proceedings for F.Y. 201718, no action was initiated against the
petitioners, during that extended period of
limitation.

15. Coming to the challenge raised to
Notification No. 9 of 2023 (issued by the
1680 INDIAN LAW REPORTS ALLAHABAD SERIES
Central Government) and Notification No.
515 of 2023 (issued by the State
Government)
hereinafter
collectively
referred to as the impugned notifications, it
has been submitted, first, the time extension
notifications have not arisen on an
independent exercise but only by way of
partial modification of the first time
extension granted.

16. Second, it has been asserted that on
31.03.2023, there did not exist any COVID19 circumstance at the time of issuance of
the impugned notifications. The staff
attendance
at
government
and
nongovernment offices stood regularised. Preexisting office working restrictions were
done away. Referring to the impugned time
extension clause in Section 168-A of the
Central Act and the State Act, it has been
submitted that there did not exist any 'force
majeure' circumstance. Referring to the
order of the Supreme Court passed in Re:
Cognizance for Extension of Limitation
(Miscellaneous Application No. 408 of
2022 and connected matter), the Supreme
Court itself granted exemption/relaxation of
limitation for a limited period 15.03.2020 to
28.02.2022 only. Thus, according to him, in
absence of any 'force majeure' circumstance
existing on 31.03.2023, the exercise of
power by the Central Government and the
State Government to extend the limitation to
frame the adjudication order for F.Y. 201718 upto 31.12.2023, did not exist. The
exercise of power is patently ultra vires the
Act.

17. Here, he has also referred to Clause 5
of Circular dated 20.07.2021 to submit that the
CBIC itself was cognizant of the order passed by
the Supreme Court dated 27.04.2021. Therefore,
it was the shared understanding of the executive
authorities that the COVID-19 circumstance had
come to an end on 28.02.2022. Referring to S.
Kasi Vs. State through Inspector of Police,
Samaynallur
Police
Station,
Madurai
District; (2021) 12 SCC 1, it has been asserted,
the Supreme Court itself clarified its order to
imply that - the order dated 23.03.2020 cannot be
read to mean that it ever intended to extend the
period of filing Charge-Sheet by police
authorities as contemplated under Section
167(2) Cr.P.C.

18. To elaborate his submission that no
general extension of time had been granted to
State authorities by the Supreme Court, he has
also referred to a decision of the Jharkhand High
Court in M/s Rungta Mines Ltd. Vs. State of
Jharkhand, (2023)VIL-525-JHR wherein that
Court had the occasion to consider whether
under the suo motu extension of limitation orders
passed by Supreme Court, the limitation to
initiate re-assessment proceedings also stood
extended. Referring to the Circular dated 20 July
2021 that reflects the own understanding of the
revenue authorities, it was noted that the actions
of scrutiny of returns, issuance of summons,
search, enquiry or investigations and even
consequential arrests (under the GST law), were
not covered by the order of the Supreme Court.
It was taken note that in the meeting of the Goods
and Service Tax Council (hereinafter referred to
as the 'Council') itself, that apex body under the
scheme of the Central Act and the State Act, was
cognizant that the order of the Supreme Court
would apply to other quasi judicial and judicial
proceedings but not to adjudication proceedings.
Applying that principle, it has been emphasised
that the process of scrutiny of returns, audit etc.,
was not covered. The fact that the revenue
authorities failed to perform those functions may
not be now protected by seeking extension of
limitation to pass adjudication order.

19. Third, it has been submitted, no
compliance has been made to the statutory
requirements of Section 168A of the Act.
Since the ingredients of 'force majeure'
5 All. M/S Graziano Trasmissioni Vs. Goods & Services Tax & Ors.
1681
circumstance did not exist on the relevant
date
i.e.
issuance
of
the
impugned
notifications, they are wholly ultra vires. By
way of another limb of this submission, it
has been further asserted that the Central
Government and the State Government
should have acted independent of the
opinion or advise of the Council. Power to
issue the time extension notifications being
delegated to the Government, no blind or
mute compliance may have been offered by
the delegate to the opinion of the Council.
Reference has been made to the impugned
notifications and also to the resolution of the
Law Committee considered by the Council,
to submit that both are silent to the existence
of 'force majeure' circumstance relevant to
the impugned notifications.

20. To clarify, he would submit, unless
such circumstance was shown to exist on the
date
of
issuance
of
time
extension
notifications and unless due application of
mind had been made by the Central
Government to that effect, inconceivable
situation may arise where the Council may
continue to resolve to extend the limitation
of time to frame adjudication orders,
indefinitely. The Central Government and
the State Government may continue to offer
blind compliance to such opinions and
resolutions of the Council as may remain
wholly contrary to the spirit of the Central
and the State Act. Reliance has been placed
on another decision of the Supreme Court in
Union of India and Another Vs. Mohit
Minerals Private Limited (2022) 10 SCC
700 to submit that the recommendations of
the Council are of persuasive value and that
they do not create the law. In any case, the
in context of delegated legislation arising
under Section 168A of the Act, the Central
Government and the State Government had
to offer independent application of mind to
the
existence
of
'force
majeure'
circumstance. In the present case, contrary
to that, both the Central Government and the
State Government have offered mechanical
compliance to the recommendation of the
Council.

21. Further, it has been submitted, in
face of the plain language of Section 168A
of the Central Act and the State Act, the
burden to establish the existence of 'force
majeure'
circumstance
remained
undischarged on the Central Government
and the State Government. Neither in the
impugned
notifications
nor
in
the
recommendation of the Council nor in the
report of the Law Committee nor through
the Counter Affidavit filed in these petitions,
any fact has been shown to exist as may have
allowed the delegated legislative body to act
under Section 168A of the Central Act or the
State Act. Mere, difficulties or existence of
onerous conditions would never survive the
test of Section 168A of the Act. The
legislature, in its own wisdom contemplated
absolute impossibility in performance of
certain actions as the only permissible
reason to exercise the power delegated
under Section 168A of the Central Act and
the State Act. Referring to the Energy
Watchdog
Vs.
Central
Electricity
Regulatory Commission & Ors., (2017)
14 SCC 80, it has been asserted, for any
event to describe as a 'force majeure', it must
have wholly or partly caused an unavoidable
delay on the affected party on the
performance of its obligations. Referring to
the circumstances that existed viz-a-viz the
challenge brought before us and referring to
the documents and pleadings, it has been
shown, inspections (on 25.2.2022); audit (on
3.2.2022); audit notice (on 14.10.2022);
audit order (on 13.12.2022) and various
other actions were performed. In such
circumstances, it has been submitted, there
were no 'force majeure' circumstance as may
1682 INDIAN LAW REPORTS ALLAHABAD SERIES
have prevented the revenue authorities from
initiating adjudication proceedings before
the cut-off date 30.6.2023. Merely because
there may have existed certain difficulties,
those may not have been cited as an
impossibility. Thus, it has been contended,
the issuance of the impugned notifications
falls foul with the power vested with the
Central
Government
and
the
State
Government under Section 168A of the
Central Act and the State Act.

22. Next, it has been submitted,
limitation is a substantive right. It impacts
the right of the tax-payers. Referring to the
marginal note to TOLA, emphasis has been
laid to the words "special circumstance"
appearing in the marginal note. Thus, it has
been emphasized, the power vested under
Section 168A of the Act is not a general
power to be exercised for completion of
certain actions but an exceptional power
vested in the delegate to be exercised, in
special circumstances.

23. Referring to Eastern Coalfields
Limited Vs. Sanjay Transport Agency &
Anr., (2009) 7 SCC 345 and Satyendra
Kumar Mehra alias Satendera Kumar
Mehra Vs. State of Jharkhand, (2018) 15
SCC 139, it has been submitted, any doubt
or ambiguity in the interpretation of the
legislative clause may always be cleared by
looking at the marginal note.