The Gauhati High Court has held that the recommendations to be made by the GST Council, if required as per the provisions of the Central Act or the State Act, has to be construed to be a sine qua non for exercise of power by the Union or the State Government.
According to the Court, wherever the provisions of the Central Act or the State Act stipulates that an act is required to be done on the recommendation of the GST Council, the act can be done only when there is a recommendation. Supreme Court’s decision in the case of V.M. Kurian on the meaning of the word ‘recommend’, was relied upon by the High Court here.
Revenue department’s submission that all recommendations of the GST Council are not binding and as such even without the recommendation, the Government could exercise the powers under Section 168A, was held to be misconceived. According to the Court, fact that the recommendation is not binding cannot be construed to mean that the Government can act without a recommendation if the Central/State Act so stipulates.
The High Court in its Judgement dated 19 September 2024 also observed that the Supreme Court decision in the case of Mohit Minerals does not lay down the proposition that as some of the recommendations are not binding, there is no requirement of a recommendation by the GST Council to exercise the power.
Adjudication – Notification No. 56/2023-CT, extending time-limit for issuing orders for FYs 2018-19 and 2019-20, is ultra vires to Section 168A
Accordingly, Notification No.56/2023-Central Tax, extending the period to pass the order under Section 73(9) of the CGST Act, 2017 for the Financial Year 2018-2019 up to the 30 April 2024 and for the Financial Year 2019-2020 up to 31 August 2024, was held as a colourable legislation. The Court in this regard noted that the notification mentioned that it was issued on the recommendations of the GST Council while there was no such recommendation.
Quashing the notification, the Court in Barkataki Print And Media Services v. Union of India also noted that GST Council had no occasion to consider existence of any force majeure inasmuch as the same was never placed before the GST Council before issuance. The notification was thus held to have been issued without the force majeure condition being considered in accordance with the law. The Court also in this regard noted that the State of Assam had not issued any pari materia notification for the purpose.