Can the Time Limit for Adjudicating a Show Cause Notice Be Extended via Notification Under Section 168A? Supreme Court to Examine



Case Name: M/S HCC-SEW-MEIL-AAG JV v. ASSISTANT COMMISSIONER OF STATE TAX & ORS., Petition for Special Leave to Appeal (C) No.4240/2025


The Supreme Court is deliberating on whether the time limit for adjudicating show cause notices and passing orders under Section 73 of the GST Act can be extended through notifications issued under Section 168-A. This provision allows the government to extend time limits due to force majeure, but its application has been contested in recent cases.

Major Arguments:

  1. Legal Challenge: A batch of petitions was filed challenging the validity of notifications (Nos. 13/2022, 9 and 56/2023, and 28.12.2023) that extended the time limits for adjudicating show cause notices. Petitioners argued that no force majeure conditions existed to justify these extensions.
  2. High Court Decisions:
    • The Allahabad High Court ruled in Graziano Transmissions v. Goods and Services Tax that Supreme Court orders relaxing limitations are inapplicable to GST Act proceedings.
    • The Gauhati High Court in the case of M/s. Barkataki Print and Media Services, Dhrubajyoti Barkotoku v. Union of India emphasized that the GST Council's recommendation is essential for invoking Section 168-A.
    • The Telangana High Court, however, held that the Council's recommendation is not a condition precedent for issuing notifications, rejecting the argument that the COVID-19 pandemic did not warrant extensions beyond February 28, 2022.
  3. Supreme Court's Stance: The Supreme Court has noted that limitations relaxed due to the COVID-19 pandemic apply to laws with stipulated time limits, including Section 73. It acknowledged that the pandemic created extraordinary difficulties justifying extensions under Section 168-A.

Critical Conclusions:

  • The Telangana High Court concluded that the validity of the notifications became academic since the period between March 15, 2020, and February 28, 2022, was excluded for limitation purposes by a binding Supreme Court order.
  • The Supreme Court has issued notice to the respondents, indicating that it will review the matter and clarify the application of Section 168-A.

Significance

This case highlights the ongoing debate over the interpretation and application of Section 168-A of the GST Act, particularly in the context of the COVID-19 pandemic. The Supreme Court's decision will have implications for future extensions of time limits under similar circumstances and will address the divergence of opinions among High Courts on this issue.

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