Mahabir Tiwari Vs The Union of India and 4 Ors.

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GAHC040016632024

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THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) (ITANAGAR BENCH)

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Case No. : WP(C)/567/2024

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Mahabir Tiwari

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Son of Late Jagdish Tiwari, resident of C/o Laxmi Centre, Lida Complex New Market, PO and PS Daporijo, Upper Subansiri District, Arunachal Pradesh. 791122

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VERSUS

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The Union of India and 4 Ors represented by the Secretary of Govt of India, Ministry of Finance, New Delhi 110001 2:The Central Board of Indirect Taxes and Customs Age: 0 Occupation : 1st Floor Tower NBCC Plaza 1 Sector 5 Pushp Vihar New Delhi 110017 represented by its Chairman. 3:The Goods and Services Tax Council Age: 0 Occupation : 5th Floor Tower-II Jeevan Bharati Building Janpath Road Connaught Palace New Delhi 110001 represented by its Chairman.

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4:The Commissioner of Central Goods and Services Tax and Central Excise Age: 0 Occupation : Sector A

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Naharlagun 791110 5:The Assistant Commissioner Age: 0 Occupation : Central Goods and Services Tax and Central Excise Sector A Naharlagun 79111

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Advocate for the Petitioner : Ravi Shankar Mishra, Manisha Nirola,Geli Taye,D Ado,Kemo Lollen Advocate for the Respondent : Marto Kato, DSGI

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BEFORE HONOURABLE MR. JUSTICE N. UNNI KRISHNAN NAIR

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ORDER

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Date : 02-06-2025

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Heard Mr. R. S. Mishra, learned counsel for the petitioner. Also heard Mr. M. Ete, learned counsel appearing on behalf of Mr. M. Kato, learned Dy. SGI for the respondents No.1 to 5.

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2. The petitioner by way of instituting the present proceeding has questioned the legality and validity of the Notification No.56/2023-Central Tax, dated 28.12.2023 and has also assailed the Demand-cum-Show Cause Notice, dated 30.05.2024 issued under C.No.IV(09)12/ADJ/GST/LC/ACI/2024-25/316-318, by the respondent No. 5 and also, the Order-in-Original No. 91/CGST/ADJ/AC/2024-25, dated 29.08.2024, passed by the respondent No. 5.

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3. Mr. Mishra, learned counsel for the petitioner submits that the petitioner, who is a business man has been served with a Show-Cause

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Notice dated 30.05.2024, by the respondent No. 5, under the provisions of Central Goods and Service Tax Act, 2017/Arunachal Goods & Service Tax Act, 2017. Mr. Mishra further submits that Section 168A of the CGST Act, 2017, vests power with the Government to extend time limit prescribed under CGST Act, 2017, in respect of the actions which cannot be completed or complied due to force majeure and in respect of financial year 2019-2020, the due date of issuance of order under Section 73 of the CGST Act, 2017 was 31.03.2024 However, the respondent No. 2, vide notification No. 09/2023 dated 31.03.2023, extended the time limit prescribed under Section 73 of the CGST Act, 2017 till 31.03.2024, without there being any force majeure as required under Section 168A of the CGST Act, 2017, which was further extended up to 31.08.2024, vide Notification No. 56/2023-Central Tax, dated 28.12.2023, without there being any recommendation of the GST Council. And on the strength of such extension, the respondent No. 5 passed the impugned order dated 29.08.2024.

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4. Mr. Mishra, learned counsel for the petitioner has submitted that the Notification No.56/2023-Central Tax, dated 28.12.2023 was assailed by similarly situated by the petitioner before the Coordinate Bench of this Court in the proceedings of WP(C) No.3585/2024, and the Coordinate Bench of this Court vide Judgment and Order dated 19.09.2024, was pleased to hold the said Notification to be ultra vires the Central Act, and accordingly, not to be legally sustainable in law. Accordingly, the said notification was set aside and quashed. Mr. Mishra, learned counsel for the petitioner submits that in view of the interference made by the Coordinate

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Bench of this Court with the notification No.56/2023-Central Tax, dated 29.08.2024, the extension of time limit prescribed under Section 73 of the GST Act for the purpose of issuance of the orders there under would not be maintainable, and accordingly, the order in original dated 29.08.2024, issued against the petitioner herein would mandate an interference by this Court.

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5. The learned counsel for the respondents has submitted that in view of the decision of the Coordinate Bench of this Court in WP(C) No.3585/2024, this Court would be pleased to pass appropriate directions in the matter.

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6. I have heard the Learned Council for the parties and also perused the materials available on record.

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7. The petitioner is a registered Assesee under the provisions of the Central Goods and Service Tax Act, 2017 and the Arunachal Goods and Service Tax Act, 2017 and bearing GST Registration No.12ANEPT8355Q2Z8. The Section 168A was inserted in the CGST Act, 2017 vide Section 7 of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The said provision deals with the power of the Government to extend time limits in special circumstances and provides that notwithstanding anything contained in the CGST Act, 2017, the Government may, on the recommendations of the GST council by notification, extend the time limits specified in or prescribed or notified under the aforesaid Act in respect of actions which cannot be completed or complied with on account of force

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majeure.

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8. The Central Board of Indirect Taxes and Customs vide Notification No. No.56/2023-Central Tax, dated 28.12.2023 in exercise of powers conferred under the provisions of Section 168A of the CGST Act, 2017, extended the limitation provided under Sub-section (10) of the Section 73 of the CGST Act for the financial year 2018-19 and 2019-20 in the following manner;

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“(i) for the Financial Year 2018-19, up to the 30^th day of April, 2024;

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(ii) for the Financial Year 2019-2020, up to the 31^st day of August, 2024.”

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9. In terms of the said extension of time so prescribed, proceedings came to be instituted against the petitioner’s firm herein and accordingly, on conclusion of the same, order in original dated 29.08.2024 was passed confirming the demand of Rs.1,20,01,973/-(Rupees one crore twenty lakhs one thousand nine hundred seventy three)only against the petitioner.

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10. Similar challenge to the Notification No.56/2023-Central Tax, dated 28.12.2023 was also presented before the Coordinate Bench of this Court in the proceedings of WP(C) No.3585/2024. The Coordinate Bench of this Court had taken up such challenge in WP(C) No.3585/2024 along with other analogous matters and was pleased to dispose of the said petitions by way of Judgment and order dated 19.09.2024, holding the said notification to be ultra vires of the Central Act and to be not sustainable. Accordingly, the said notification was set aside and quashed.

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11. Consequently, the orders in original, available in the said petitions

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having been held to have been passed beyond the time limit prescribed under the provisions of Sub-section (10) of Section 73 of both the Central Act and of the State Act, were also set aside and quashed. The conclusions drawn by the Coordinate Bench of this Court in the above noted judgment and order passed WP(C) No.3585/2024 being relevant is extracted herein below;

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“38. This Court has duly taken note of that the impugned Orders-in-Original which are challenged in the instant batch of writ petitions are orders passed in respect to the Financial Year 2018-19 and 2019-20. The impugned Order-inOriginal insofar as Financial Year 2018-19 are concerned have been passed on or after 01.04.2024. Insofar as WP(C) No.4990/2024 which relates to Financial Year 2019-20, the impugned Order-in-Original was passed on 30.08.2024. Under such circumstances, the challenge so made to the Notification No.9/2023CT as well as the pari materia notification issued by the State Government dated 06.09.2024 has no relevance for which this Court is not considering the challenge to the Notification No.09/2023-CT as well as the Notification dated 06.09.2024 issued by the State Government.

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The question which therefore arises is as to whether the Notification No.56/2023-CT dated 28.12.2023, is ultra vires the provisions of Section 168A of the Central Act?

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In the preceding segments of the instant judgment, this Court had dealt with Section 168A of both the Central Act and the State Act as well as its amplitude. From the said discussions, it is apparent that for the Government to exercise the powers under Section 168A to extend the time limit specified or prescribed or notified, it can be made on the recommendation of the GST

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Council by way of a notification in respect to acts which could not be completed or complied with due to force majeure. The challenge to the Notification No.56/2023-CT is on account of absence of recommendation by the GST Council and existence of force majeure as defined in the Explanation to Section 168A of the Central Act.

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There is no denial to the fact that the Notification No.56/2023-CT was issued without the recommendation of the GST Council. The use of the phrase "on the recommendation of the Council" in Section 168A prima facie suggests that the power to be exercised under Section 168A by the Government is when a recommendation is made by the GST Council. The question therefore arises as to whether the recommendation of the GST Council is sine qua non for exercise of the power under Section 168A by the Government.

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In the Black's Law Dictionary, 11th Edition, the term "recommendation" is defined as –

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"A specific piece of advice about what to do, esp. when given officially.

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A suggestion that someone should choose a particular thing or person that one thinks particularly good or meritorious."

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In the case of V.M. Kurian Vs. State of Kerala reported in (2001) 4 SCC 215 , the Supreme Court was dealing with Rule 5 of Kerala Building Rules and the question which arose was whether without the recommendation of Greater Cochin Development Authority and the Chief Town Planner, the State Government could have granted exemption from the operation of the Kerala Building Rules for construction of an eight storey building. The Supreme Court in the said judgment observed that the word "recommendation" is "a statement expressing commendation or a message of this nature". However, taking into account that the word "recommendation" was not defined in the Kerala Building

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Rules, it was observed that the meaning of the word "recommendation" has to be understood in the context of the provisions of the Kerala Building Rules and the object behind the Rules. Paragraph No.7 of the said judgment being relevant is quoted herein below:

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"7. Learned counsel appearing for the appellant urged that the application submitted by the 5th respondent having not been processed in conformity with Rule 5 of the Rules and, therefore, the said application could not have been entertained by the State Government. It was also argued that in the absence of any recommendation by GCDA and the Chief Town Planner, the State Government could not have granted exemptions from operation of the Rules for construction of an eight-storeyed building by the 5th respondent. Whereas, learned counsel for the 5th respondent contended that the meaning of the word "recommendation" does not necessarily mean "a no-objection certificate" by GCDA and the Chief Town Planner, but it contemplates only their viewpoint. He further argued that even if GCDA and the Chief Town Planner had objected to grant of the application, the State Government, in exercise of its overriding power can permit dispensation of the Rules for construction of a high-rise building. In order to appreciate the argument of the parties, it is necessary to quote the relevant portion of Rule 5, which runs thus:

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"5. Power of Government to exempt buildings . The Government may in consultation with the Chief Town Planner exempt any building from the operation of all or any of the provisions of these Rules, subject to conditions if any, to be stipulated in the order, granting such exemptions: Provided that such exemption shall be considered on individual

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application forwarded to the Government through the authority and the Chief Town Planner with their specific recommendations: Provided further that such exemption shall be considered only if the individual application for exemption from Building Rules is forwarded to Government along with a challan receipt remitting the application fee in the Government Treasury as detailed below...”

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A perusal of Rule 5 shows that an application for exemption from the provisions of the Rules is required to be processed through GCDA and the Chief Town Planner. The Rule further requires that the application is to be forwarded to the State Government along with the specific recommendations of GCDA and the Chief Town Planner. The question, therefore, that arises for consideration is whether in the absence of any recommendation by GCDA and the Chief Town Planner the State Government was competent to grant exemption from the operation of the Rules for construction of a high-rise building. The dictionary meaning of the word "recommend" is "to advise", "to praise or commend". In P. Ramanatha Aiyar's Law Lexicon, the meaning of the word "recommendation" is "a statement expressing commendation or a message of this nature" or suggests fit. It is true that the word "recommendation" is not defined in the Rules. If we do not go by the meaning of the word "recommendation", as suggested by learned counsel for the 5th respondent, and found that there is no conclusive meaning of the word "recommendation" we are of the view that in such a situation the meaning of the word has to be understood in the context of the provisions of the Rules and the object behind such Rules. The Rules with which we are concerned here provide for regulation and construction of a building in an urban area. The object behind the Rules is maintenance of

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public safety and convenience. The Municipal Corporation, GCDA, and the Chief Town Planner are entrusted with the functions and duties for carrying out development and regulation of building in the urban area. These are the authorities on the spot who have special and technical knowledge to advise the Government whether public safety and convenience requires dispensing with the provisions of the Rules while permitting construction of an eight-storeyed building. Thus, the meaning of the word "recommend", when read in the context of the Rules shows that it means "giving of a favourable report opposed to an unfavourable one". We, therefore, find that recommendations by GCDA and the Chief Town Planner are sine qua non for granting exemption from operation of the Rules by the State Government. In the absence of such recommendations, the State Government was not legally justified in granting exemption from operation of the Rules for construction of a highrise building. However, the position would be different where GCDA and the Chief Town Planner give an unfavourable report on irrelevant or extraneous ground and in that case, the Government can call for a fresh report for meeting the viewpoint of GCDA and the Chief Town Planner. Here, what we find is that there were neither recommendations by GCDA and the Chief Town Planner, nor the State Government obtained any fresh report to contradict the viewpoint of GCDA and the Chief Town Planner while granting exemption from operation of the Rules for constructing a high-rise building. We are, therefore, of the view that the impugned orders suffer from serious legal infirmity."

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From the above quoted paragraph, it would be seen that the Supreme Court after taking into account the object behind the Kerala Building Rules observed that the recommendation from the Greater Cochin Development

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Authority and the Chief Town Planner were sine qua non for granting exemption from operation of the Rules by the State Government and as such held that the State Government was not legally justified in granting exemption.

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In the instant case, it would be seen that both the Central Act as well as the State Act do not define the term "recommendation". Under such circumstances, it would be necessary to understand the impact of the word "recommendation" in the context of the provisions of the Constitution as well as the Central Act and State Act. In the earlier segments of the instant Judgment, this Court had dealt with Article 246A as well as Article 279A of the Constitution, Article 246A of the Constitution confers both upon the Parliament and the State Legislature simultaneous power to legislate on Goods and Service Tax. The said power can be exercised notwithstanding anything contained in Article 246 and 254 of the Constitution. It is also pertinent to take note of that the said power conferred on the Parliament and the State Legislature is not subject to Article 279A except to the extent that in respect to the Goods and Service Tax to be levied on petroleum, crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel, the power can be exercised under Article 246A from the date recommended by the GST Council.

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This Court had also dealt with in detail as regards Article 279A of the Constitution. The power to make recommendation to the Union and the States is mentioned in Article 279A(4) of the Constitution. It is also apposite to observe that the recommendation to be made shall be guided by the need for a harmonized structure of Goods and Service Tax and for development of a harmonized national market for Goods and Service Tax in terms with Article 279A(6). Article 279A(9) stipulates the value of the votes of the Central Government vis-à-vis the State Government i.e. one third of the votes cast and

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two third of the votes cast respectively. The role of the GST Council is succinctly explained by the Supreme Court in the case of Mohit Minerals Pvt. Ltd. (supra) at paragraph No.50 and the same is quoted herein below:

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"50. Article 246-A vests Parliament and the State Legislatures with a unique, simultaneous law-making power on GST. It is in this context that the role of the GST Council gains significance. The recommendations of the GST Council are not based on a unanimous decision but on a threefourth majority of the members present and voting, where the Union's vole counts as one-third, while the States' votes have a weightage of twothirds of the total votes cast. There are two significant attributions of the voting system in the GST Council. First, the GST Council has an unequal voting structure, where the States collectively have a two-third voting share and the Union has a one-third voting share and second, since India has a multi-party system, it is possible that the party in power at the Centre may or may not be in power in various States. Therefore, the GST Council is not only an avenue for the exercise of cooperative federalism but also for political contestation across party lines. Thus, the discussions in the GST Council impact both federalism and democracy. The constitutional design of the Constitution Amendment Act, 2016 is sui generis since it introduces unique features of federalism. Article 246-A treats the Centre and States as equal units by conferring a simultaneous power of enacting law on GST. Article 279-A in constituting the GST Council envisions that neither the Centre nor the States can act independent of the other."

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Another very important aspect which is also required to be kept in mind insofar as to the role of the GST Council is that as Article 246A of the

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Constitution provides simultaneous power to both the Parliament and the State Legislatures and the said power so conferred overrides Article 254 of the Constitution, the GST Council is the only body to harmonize any inconsistency between the Union and the States to reach a workable fiscal model through cooperation and collaboration. This Court at this stage further finds it relevant to quote paragraph Nos. 55 and 56 of the judgment of the Supreme Court in Mohit Minerals Pvt. Ltd. (supra) .

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"55. Such form of contestation or as the authors term it, "uncooperative federalism" is valuable since "it is desirable to have some level of friction, some amount of State contestation, some deliberation-generating froth in our democratic system." [ Jessica Bulman-Pozen and Heather K. Gerken, "Uncooperative Federalism", Yale Law Journal, Vol. 118. No. 7 (May, 2009). p. 1284.] Therefore, the States can use various forms of contestation if they disagree with the decision of the Centre. Such forms of contestation are also within the framework of Indian federalism. The GST Council is not merely a constitutional body restricted to the indirect tax system in India but is also an important focal point to foster federalism and democracy.

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One of the important features of Indian federalism is "fiscal federalism". A reading of the Statement of Objects and Reasons of the 2014 Amendment Bill, the Parliamentary reports and speeches indicate that Articles 246-A and 279-A were introduced with the objective of enhancing cooperative federalism and harmony between the States and the Centre. However, the Centre has a one-third vote share in the GST Council. This coupled with the absence of the repugnancy provision in Article 246-A indicates that recommendations of the GST Council cannot

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be binding. Such an interpretation would be contrary to the objective of introducing the GST regime and would also dislodge the fine balance on which Indian federalism rests. Therefore, the argument that if the recommendations of the GST Council are not binding, then the entire structure of GST would crumble does not hold water. Such a reading of the provisions of the Constitution diminishes the role of the GST Council as a constitutional body formed to arrive at decisions by collaboration and contestation of ideas."

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Therefore, from the above analysis, it is apparent that the object behind the insertion of the Article 246A and Article 279A and overriding Article 254 is to promote fiscal federalism and cooperative federalism. Under such circumstances, 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. In other words, 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. As observed by the Supreme Court in V.M. Kurian (supra) , the meaning of the word "recommend" would also in the opinion of this Court be applicable to the interpretation of Section 168A to mean "giving of a favourable report opposed to an infavourable one" by the GST Council for exercise of power under Article 168A.

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At this stage, let this Court take into account the submission of the learned counsel for the CGST to the effect that all recommendation of the GST Council are not binding and as such even without the recommendation, the Government could exercise the powers under Section 168A of the Central Act. The said

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submission is misconceived for the following reasons:

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A) (i) There is a fundamental difference between no recommendation made and the effectiveness of the recommendations. A perusal of Section 168A stipulates that the power may be exercised on the recommendation of the GST Council meaning thereby taking into account the analysis made in the previous paragraphs that there is a favourable report by the GST Council for the Government to exercise the power under Section 168A. The existence of the recommendation is a sine qua non for exercising the power under Section 168A to extend the timelines and without the recommendations, the exercise of the power would be legally not sustainable. On the other hand, the effectiveness of the recommendation has to be judged on the principles of whether such recommendation is binding on the Union or the State. For example, the GST Council may have made a recommendation to carry out a particular exercise by the Government under the Central Act or the State Act. The said recommendation may be binding upon the Government or may not be depending upon the purpose of the enactment. But the fact that it is not binding cannot be construed to mean that the Government can act without a recommendation of the GST Council if the Central Act or the State Act stipulates that the Government can exercise on the recommendation of the GST Council.

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(ii) At this stage, this Court finds it pertinent to further deal with the judgment of the Supreme Court in the case of Mohit Minerals Pvt. Ltd. (supra) and under such circumstances, the said judgment was rendered. A perusal of the facts of the said judgment would show that two Notifications bearing No.8/2017 and 10/2017 were the subject matter of

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challenge. These notifications were issued on the recommendation of the GST Council. The Gujarat High Court set aside both the Notifications No.8/2017 and 10/2017 being unconstitutional for exceeding the powers conferred by the IGST Act and the Central Act. In the Appeal before the Supreme Court, the learned Attorney General amongst other contentions submitted that taking into account the constitutional scheme and that the Union and the States have agreed to go by the recommendations of the GST Council in every aspect of GST law wherever required, the recommendations so made by the GST Council were binding and must be respected in the spirit of collaborative federalism.

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(iii) The Supreme Court in the said judgment and more particularly at Paragraph No. 57 and its sub-paragraphs analyzed the five categories into which the phrase "recommendation" had been deployed in the Constitution i.e.

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(a) Recommendations by the President under Articles 3, 109, 111, 113, 117, 203, 207, 255 and 274 prior to laying before the Parliament for voting.

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(b) Recommendations followed by consultation;

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(c) Recommendations with accountability;

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(d) Non-Qualifying recommendations;

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(e) Recommendations which are obligatory in nature.

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(iv) The observations of the Supreme Court in paragraph Nos. 58 and 59 are relevant and the same are quoted herein below:

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"58. A survey of the above provisions indicates that the nature and meaning of the term "recommendation" differs contextually. All the provisions qualify the nature of recommendation. For instance, in

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category one, the recommendation of the President is for the initiation of the discussion; in category two, a decision on the recommendation is arrived upon "consultation"; in category three, the decision-making authority has to submit an explanatory note on the action or inaction taken on the recommendations; in category four, the recommendations are not qualified. Article 263 only states that the inter-State Council has a duty to recommend. There is no further explanation on whether the recommendation ought to be mandatorily accepted, or deliberated upon; in category five, the recommendations of the authority are expressly stated to be "binding" on the decision-making authority.

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The GST Council which is a constitutional body is entrusted with the duty to make recommendations on a wide range of areas concerning GST, The GST Council has plenary powers under Article 279-A(4)(h) where it could make recommendations on "any other matter" related to GST as the Council may decide. The GST Council has to arrive at its recommendations through harmonised deliberation between the federal units as provided in clause (6) of Article 279-A. Unlike the other provisions of the Constitution which provide that recommendations shall be made to the President or the Governor, Article 279-A states that the recommendations shall be made to the "Union and the States". The recommendation of the GST Council made under Article 279-A is nonqualified. That is, there is no explanation on the value of such a recommendation. Yet the notion that the recommendations of the GST Council transform into legislation in and of themselves under Article 246-A would be far-fetched. If the GST Council was intended to be a decisionmaking authority whose recommendations transform to legislation, such a qualification would have been included in Articles 246-A or 279-A. Neither

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does Article 279-A begin with a non-obstante clause nor does Article 246A provide that the legislative power is "subject to" Article 279-A."

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(v) The above observations only go to show that the recommendations made by the GST council on its own would not result in a legislation.

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(vi) In the said judgment, the Supreme Court further dealt with the interpretation of the recommendation vis-à-vis the Central Act and IGST Act, 2017 and observed at paragraph No. 65 and 66 as follows:

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"65. The contention of the Union is that the recommendations the GST Council are binding since Parliament and the State Legislatures have agreed to align themselves with the recommendations as is evident from the provisions of the IGST Act and the CGST Act. Certain provisions of the IGST Act, the CGST Act and the SGST Acts expressly provide that the rule-making power delegated to the Government shall be exercised on the recommendations of the GST Council. For instance, Section 5 of the IGST Act provides that the taxable event, taxable rate and taxable value shall be notified by the Government on the "recommendations of the Council". Similarly, the power of the Central Government to exempt goods or services or both from levy of tax shall be exercised on the recommendations of the GST Council under Section 6 of the IGST Act. Section 22 provides that the Government may exercise its rule-making power on the recommendations of the GST Council. The CGST Act also provides for similar provisions in Sections 9, 11 and 164.

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The provisions of the IGST Act and the CGST Act which provide that the Union Government is to act on the recommendations of the GST Council must be interpreted with reference to the purpose of the

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enactment, which is to create a uniform taxation system. The GST was introduced since different States could earlier provide different tax slabs and different exemptions. The recommendations of the GST Council are made binding on the Government when it exercises its power to notify secondary legislation to give effect to the uniform taxation system. The Council under Article 279-A has wide recommendatory powers on matters related to GST where it has the power to make recommendations on subject-matters that fall outside the purview of the rule-making power under the provisions of the IGST and the CGST Act. Merely because a few of the recommendations of the GST Council are binding on the Government under the provisions of the CGST Act and the IGST Act, it cannot be argued that all of the GST Council's recommendations are binding. As a matter of first principle, the provisions of the Constitution, which is the grundnorm of the nation, cannot be interpreted based on the provisions of a primary legislation. It is only the provisions of a primary legislation that can be interpreted with reference to the Constitution. The legislature amends the Constitution by exercising its constituent power and legislates by exercising its legislative power. The constituent power of the legislature is of a higher constitutional order as compared to its legislative power. Even if it is Parliament that has enacted laws making the recommendations of the GST Council binding on the Central Government for the purpose of notifying secondary legislations, it would not mean that all the recommendations of the Council made by virtue of its power under Article 279-A have a binding force on the legislature.'

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(vii) The above analysis by the Supreme Court would show when a recommendation would be binding and when not. The ratio which emerges from the above paragraphs only show that merely because of a

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few recommendation of GST Council are binding on the Government, it cannot be argued that all recommendations are binding. The ratio is based on the principle as stated that a Constitutional provision cannot be interpreted on the basis of a primary legislation rather a primary legislation is to be interpreted on the basis of the Constitution. However, the said judgment does not lay down the proposition that as some of the recommendations are not binding, there is no requirement of recommendation by the GST Council to exercise the power.

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(B) The power to be exercised under Section 168A by the Government is a delegated power to issue a Notification which can be termed as a delegated legislation or a secondary legislation. The primary legislation is the Central Act or the State Act. In the judgment of the Mohit Minerals Pvt. Ltd. (supra) , the Supreme Court at paragraph No.66 as quoted above had clearly observed that when the Government is exercising power to notify secondary legislations to give effect to the uniform taxation system, the recommendations are binding. Be that as it may, irrespective of the fact whether the recommendations are binding or not can it be said that without recommendations, the power under Section 168A could be exercised. The answer has to be in the negative.

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(C) It is also very important to note that the power conferred on the Government under Section 168A to extend the timelines is power conferred under both the Central Act and the State Act. This power is conferred on the basis of the exercise of the legislative powers of the Parliament and the State Legislature as the case may be. Under such circumstances, when such power is conferred on the Government to make delegated legislation, the said power has to confirm to the stipulations contained in the parent Act and in the instant case, the Notification No.56/2023-CT had to confirm to the stipulations

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prescribed in Section 168A of the Central Act which would include the requirement of the recommendations of the GST Council.

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(D) The Central Government knew that there was no recommendation from the GST Council and this aspect is clearly admitted. However, in the Notification No.56/2023-CT, the Central Government for reasons best known mentioned that "on the recommendations of the Council" which on the face of it shows that the exercise of power by the Central Government insofar as the Notification No.56/2023-CT is concerned is a colourable exercise of power for which the said Notification No.56/2023-CT is a colourable legislation.

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Another ground of challenge to the Notification No.56/2023-CT is that as there was no element of force majeure, the question of exercising the power under Section 168A did not arise. In the previous segment of this judgment, this Court had dealt with the Explanation to Section 168A. The Explanation to Section 168A deals with various types of natural calamities, war, epidemic to come within the ambit of force majeure. It is pertinent to mention that the recommendation to be made by the GST Council have also to be based upon the existence of force majeure conditions. In the 49th Meeting of the GST Council, it was clearly recorded that there shall be no further extension beyond the three months in the interest of the tax payers. The Notification No.56/2023CT was issued without the recommendation and that natural corollary thereof is that the GST Council had no occasion to consider existence of force majeure inasmuch as the same was never placed before the GST Council before issuance of the same. Therefore, the Notification No.56/2023-CT if construed from that angle also would be a notification issued without the force majeure condition being not considered in accordance with law.

¶107

Under such circumstances, this Court is of the opinion that the

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¶109

Notification No.56/20123-CT is ultra vires the Central Act and the same is not legally sustainable in law. Accordingly, the same is set aside and quashed.”

¶110

12. This Court is in respectful agreement with the conclusions drawn by the Coordinate Bench of this Court vide the Judgment and Order dated 19.09.2024 in WP(C) No. 3585/2024 and other analogous matters. Accordingly, the said conclusions would also squarely apply to the issues arising in the present proceedings.

¶111

13. In view of the above position, this Court is of the considered view that the Notification No.56/2023-Central Tax, dated 28.12.2023 would not be sustainable and accordingly, stands set aside and quashed. Consequently, the Demand-cum-Show Cause Notice, dated 30.05.2024 and the Order-in-Original dated 29.08.2024, shall also stand set aside and quashed.

¶112

14. With the above observations and directions, the present Petition stands disposed.

¶113

JUDGE

¶114

Comparing Assistant

Mahabir Tiwari v. The Union of India and 4 Ors.

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Mahabir Tiwari v. The Union of India and 4 Ors.

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