Section 168A GST Dispute: Four High Courts, Four Views on Limitation Extension

The Section 168A Limitation-Extension Fault Line Four High Courts, Four Views – The Tata Play-Mahabir Tiwari-Brunda Infra Divergence, the Supreme Court’s Pending Resolution, and the Fate of Thousands of GST Demands for FY 2017-18 to 2019-20

1. The Problem: A Procedural Question Holding Back Thousands of Demands

Section 168A of the Central Goods and Services Tax Act, 2017 empowers the Government, on the recommendation of the GST Council and in the presence of a force majeure event, to extend time limits prescribed under the Act. Inserted during the COVID-19 pandemic, the provision was invoked through three successive notifications — Notification No. 13/2022-Central Tax dated 5 July 2022, Notification No. 9/2023-Central Tax dated 31 March 2023, and Notification No. 56/2023-Central Tax dated 28 December 2023 — to extend the time limit under Section 73(10) for passing adjudication orders for the financial years 2017-18, 2018-19, and 2019-20.

These extensions are now at the centre of the single largest procedural controversy in GST administration. Four High Courts — Gauhati, Telangana, Patna and Madras — have taken divergent views on the validity of Notifications 9/2023 and 56/2023. The Gauhati High Court in M/st Barkataki Prin and Media Services v. Union of India [2024] 166 taxmann.com 586 (Gauhati) and, subsequently, the Madras High Court in Tata Play Ltd. v. Union of India [2025] 176 taxmann.com 357 (Madras) have struck down Notification 56/2023 as ultra vires Section 168A. The Telangana High Court in Brunda Infra Pvt. Ltd. (2025 SCC OnLine TS 145) and the Patna High Court in Barhonia Engicon Pvt. Ltd. v. State of Bihar have taken the opposite view, upholding the Notifications. The Supreme Court, through its bench of Justices J.B. Pardiwala and R. Mahadevan, has admitted the matter for final resolution — but pending adjudication, field officers across India continue to issue SCNs and pass orders under the extended limitation, each open to later challenge on the Gauhati-Madras reasoning.

The stakes are difficult to overstate. Orders aggregating to tens of thousands of crores of rupees rest on the validity of the three notifications. If the Supreme Court affirms the Gauhati-Madras view, a substantial stock of assessments for FY 2017-18 to 2019-20 becomes time-barred; if it affirms the Telangana-Patna view, the extended limitation stands, and taxpayers lose their single strongest procedural ground of challenge. This article analyses the four divergent judicial positions, identifies the doctrinal fault lines, and proposes a framework for taxpayers navigating the interregnum.

2. Statutory Architecture of Section 168A

Section 168A provides that the Government “may, on the recommendations of the Council, by notification, extend the time limit specified in, or prescribed or notified under, this Act in respect of actions which cannot be completed or complied with due to force majeure.” The Explanation defines “force majeure” as “a case of war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise affecting the implementation of any of the provisions of this Act.” Two distinct pre-conditions therefore operate: (a) a qualifying force majeure event, and (b) a prior recommendation of the GST Council.

The force majeure trigger originally deployed was, of course, COVID-19. But the three Notifications extended limitation well beyond the pandemic’s acute phase. By the time of Notification 56/2023, issued in December 2023, COVID-19 was no longer an extant emergency, and the Supreme Court’s suo motu order in In Re: Cognizance for Extension of Limitation [2022] 134 taxmann.com 307 (SC), excluding the period from 15 March 2020 to 28 February 2022 from computation of limitation, had already lapsed. The petitioners before the various High Courts contended that, by the date of Notification 56/2023, neither force majeure nor a valid GST Council recommendation existed — the Notification was instead issued pursuant to a GST Implementation Committee (GIC) decision, subsequently ratified by the Council.

3. The Four Judicial Positions — A Comparative Map

3.1 The Gauhati Position — Notification 56/2023 Ultra Vires

The Gauhati High Court in Barkataki Print and Media Services [2024] 166 taxmann.com 586 (Gauhati), decided 19 September 2024, struck down Notification 56/2023 on two principal grounds. First, the Notification was issued on the basis of a GIC decision rather than a GST Council recommendation — and subsequent ratification by the Council cannot cure this defect, as “recommendation” under Section 168A is a condition precedent. Second, the force majeure requirement was not satisfied: COVID-19 had effectively ceased by late 2023, and the Revenue’s reliance on administrative backlog was not a recognised force majeure. The Court quashed the Notification and consequential orders. The ratio was reaffirmed and extended in Mahabir Tiwari v. Union of India [2025] 175 taxmann.com 176 (Gauhati), where the Court emphasised that the GST Council recommendation is a sine qua non for Section 168A invocation — not a mere procedural formality.

3.2 The Madras Position — Both 9/2023 and 56/2023 Ultra Vires

The Madras High Court in Tata Play Ltd. v. Union of India [2025] 176 taxmann.com 357 (Madras), decided 12 June 2025 in a consolidated batch of writ petitions, took the analysis further. Applying the test of delegated legislation, the Court held: (a) Section 168A confers discretion that is legislative in nature, and notifications thereunder are a form of delegated legislation; (b) the force majeure trigger must be the proximate cause of the failure to act within limitation — administrative backlog is not a proximate force majeure consequence; (c) the GST Council recommendation is mandatory and cannot be substituted by the GIC or by post-facto ratification; (d) the Supreme Court’s order under Article 142 in [2022] 134 taxmann.com 307 (SC), excluding the pandemic period from limitation, is a doctrine of “exclusion” conceptually distinct from Section 168A “extension”, and the two operate independently and cumulatively. Crucially, the Madras High Court concluded that Notification 56/2023, by fixing outer dates rather than extending limitation, actually curtailed the limitation otherwise available under Section 73 read with the Supreme Court’s exclusion order — and this curtailment was itself unconstitutional as extinguishing a vested right of action of the authorities.

3.3 The Telangana Position — Cooperative Federalism Upholds Extension

The Telangana High Court in Brunda Infra Pvt. Ltd. & Ors. v. Additional Commissioner of Central Tax, Hyderabad, 2025 SCC OnLine TS 145, upheld the validity of Notification 56/2023. The Court interpreted the phrase “in respect of actions” in Section 168A broadly, to cover actions whose continued performance was affected by the pandemic even if the proximate period of COVID had passed. It held that requiring GST Council recommendations as a condition precedent reflected the Doctrine of Cooperative Federalism enunciated by the Supreme Court in Union of India v. Mohit Minerals (P.) Ltd. [2022] 138 taxmann.com 331 (SC) — but did not imply that subsequent ratification was per se invalid. On force majeure, the Court took a purposive approach: government’s response to an extraordinary crisis must be viewed in broad perspective, and hair-splitting on proximate causation was inappropriate.

3.4 The Patna Position — Extensions Sustained on the Exclusion Doctrine

The Patna High Court in Barhonia Engicon Pvt. Ltd. v. State of Bihar (2024 SCC OnLine Pat 8366) adopted a different analytical route to the same conclusion as Telangana. Rather than rigorously testing the Section 168A requirements, the Patna High Court reasoned that because the Supreme Court’s Article 142 exclusion order had already set aside the period 15 March 2020 to 28 February 2022, the challenge to the Notifications was largely academic — whether or not the Notifications were valid, the adjudication would fall within time when computed with the Supreme Court-mandated exclusion. The Patna position is thus formally a less searching analysis than the other three High Courts’.

4. The Doctrinal Fault Line — Four Questions Before the Supreme Court

The Supreme Court’s pending resolution in HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax [SLP (C) No. 4240/2025], with batch of connected matters, will need to address four analytically distinct questions, each with very different implications.

4.1 Is Section 168A ‘Delegated Legislation’ or ‘Conditional Legislation’?

The Madras High Court held that Section 168A is delegated legislation — meaning it confers discretion exercisable by the executive to modify the limitation framework, and is subject to the full rigour of delegated-legislation review. The Telangana High Court implicitly treated it as conditional legislation — triggered by force majeure, with a broader deference owed to the executive’s assessment. The distinction matters: delegated legislation review requires strict scrutiny of the statutory pre-conditions; conditional legislation allows a more purposive reading. The Supreme Court’s resolution will turn in significant measure on this threshold characterisation.

4.2 Is GST Council ‘Recommendation’ a Condition Precedent or Advisory?

The Supreme Court in Mohit Minerals [2022] 138 taxmann.com 331 (SC) held that not all GST Council recommendations are binding. However, where a statute expressly requires action to be taken “on the recommendation of the Council”, the Gauhati-Madras view treats this as jurisdictional — the absence of a valid Council recommendation renders the Notification void. The Telangana view, by contrast, accepts post-facto ratification. The Supreme Court will need to resolve whether Mohit Minerals leaves open a space for post-facto ratification under Section 168A, or whether the statutory language of Section 168A is stricter than the general position in Mohit Minerals.

4.3 Is Administrative Backlog a ‘Force Majeure’?

The Explanation to Section 168A lists “war, epidemic, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature or otherwise” as force majeure. The Gauhati-Madras view applies ejusdem generis: “any other calamity” must be of the same genus as the enumerated events. Administrative backlog, shortage of personnel, or system inefficiencies do not qualify. The Telangana view is more permissive — the aftereffects of a pandemic can persist administratively long after the acute phase ends. The Supreme Court’s resolution will define the boundary of “force majeure” for all future invocations of Section 168A.

4.4 Does the SC’s Article 142 ‘Exclusion’ Order Overlap with Section 168A ‘Extension’?

The Supreme Court in [2022] 134 taxmann.com 307 (SC) excluded the period 15 March 2020 to 28 February 2022 from computation of limitation under general and special laws. The Madras High Court treated this “exclusion” as conceptually distinct from Section 168A “extension” — the former removes a period; the latter enlarges a period — and held that the two operate cumulatively rather than substitutively. The Patna High Court’s Barhonia Engicon reasoning implicitly equates them. The Supreme Court’s answer on this question will determine whether the 2022 suo motu order absorbs the extension Notifications or coexists with them — a decision with direct impact on the time-barring calculation for every affected SCN and order.

5. Practical Consequences Pending Supreme Court Resolution

5.1 For Taxpayers — The Stay and Appeal Strategy

Taxpayers served with SCNs or adjudication orders relying on the extended limitation have three available strategies. First, in jurisdictions where the Gauhati or Madras rulings apply directly (Assam, Arunachal Pradesh, Mizoram, Nagaland, Tamil Nadu, Puducherry), the notifications have been struck down and the orders can be challenged on that basis before the appellate authority or the High Court. Second, in other jurisdictions, taxpayers can file writ petitions relying on the Gauhati-Madras reasoning as persuasive authority, seeking interim stay pending the Supreme Court’s resolution. Third, taxpayers can proceed through the statutory appellate route, preserving the limitation challenge as a ground of appeal and awaiting the Supreme Court’s final decision.

A decisive tactical consideration is the pre-deposit requirement under Section 107 of the CGST Act — 10 per cent of the disputed tax, subject to a cap. The writ route avoids the pre-deposit; the statutory appeal route requires it. For demands of substantial quantum, the writ route has been preferred in the post-Barkataki Print era.

5.2 For the Revenue — Protective Action and Litigation Defence

The Revenue’s pending litigation stock is significant. Where orders under the extended limitation have been passed and are at risk of being vacated, the Revenue has taken two protective actions: (a) filing SLPs at the Supreme Court seeking to consolidate the divergent High Court views (the HCC-SEW-MEIL-AAG JV batch); and (b) continuing to press fresh SCNs and orders in the interim, relying on the Telangana-Patna view in non-Gauhati/Madras jurisdictions. The risk is that if the Supreme Court affirms the Gauhati-Madras view, a second round of litigation will ensue to vacate orders issued during the interregnum.

6. Comparative Position Before and After Supreme Court Resolution

7. A Four-Point CBIC Action Plan for the Interregnum

Until the Supreme Court delivers its final word, the CBIC can take the following four steps to minimise administrative disruption and protect revenue interests consistent with procedural fairness:

(i) Defer Fresh Coercive Recovery in Gauhati/Madras Jurisdictions: In jurisdictions where Barkataki Print and Tata Play operate as binding precedent, the CBIC should instruct field formations to defer coercive recovery actions (bank attachments, garnishee notices, registration cancellations) pending the Supreme Court’s resolution. The Section 112(9) pre-deposit mechanism provides adequate revenue protection while avoiding irreversible coercive action on orders that may be vacated.

(ii) Issue a Uniform Protocol for Supplementary Limitation Computation: Provide field officers with a uniform protocol for computing residual limitation under the Supreme Court’s [2022] 134 taxmann.com 307 (SC) exclusion order, independent of Notifications 9/2023 and 56/2023. This would allow orders to stand even if the Notifications are struck down, provided the adjudication falls within the exclusion-adjusted limitation.

(iii) Request Expedited Supreme Court Resolution: The Revenue should seek early listing of the HCC-SEW-MEIL-AAG JV batch and connected matters. Given the direct revenue implications and the near-paralysis of GST adjudication in multiple jurisdictions, this matter meets the threshold for expedited constitutional determination.

(iv) Consider a Fresh Notification Grounded in the Supreme Court Exclusion Order Alone: A cautious alternative is to issue a fresh notification expressly anchored in the Supreme Court Article 142 exclusion order and in recommendations of the GST Council made in 2022-23, without reliance on the GIC route. This would insulate the adjudication framework from the Gauhati-Madras reasoning for future proceedings, while the pending stock awaits the Supreme Court’s resolution.

8. Conclusion — A Procedural Controversy With Systemic Consequences

Section 168A was inserted to address an extraordinary situation. It has since produced an extraordinary controversy. Four High Courts, two diametrically opposite constructions, thousands of SCNs and orders hanging in procedural uncertainty — this is the current state of GST adjudication for the first three years of the GST regime. The Gauhati High Court in Barkataki Print [2024] 166 taxmann.com 586 (Gauhati) and Mahabir Tiwari [2025] 175 taxmann.com 176 (Gauhati), and the Madras High Court in Tata Play [2025] 176 taxmann.com 357 (Madras), have built a careful doctrinal edifice anchoring Section 168A in the discipline of delegated legislation, the strict requirement of a valid Council recommendation, and the ejusdem generis limit on force majeure.

The Telangana and Patna High Courts, by contrast, have read Section 168A purposively, deferring to the executive’s assessment of force majeure continuity and accepting post-facto Council ratification. The Supreme Court, in adjudicating the HCC-SEW-MEIL-AAG JV batch, will need to choose between these two approaches — or fashion a middle path that reconciles the strict textualism of the Gauhati-Madras view with the cooperative-federalism purposivism of the Telangana-Patna view.

For taxpayers, the interregnum demands tactical sophistication: preserving the Section 168A challenge as the central procedural ground, relying on [2024] 166 taxmann.com 586 (Gauhati) and [2025] 176 taxmann.com 357 (Madras) as persuasive authority in other jurisdictions, and calibrating the choice between writ and statutory appeal routes with care. For the Revenue, the interregnum demands restraint: avoiding coercive actions on orders that may be vacated, and pressing for Supreme Court resolution with the urgency the situation demands. For the Board, the interregnum demands strategic action — the four-point plan proposed in Section 7 represents a minimum consistent with procedural fairness and revenue protection. The Supreme Court’s forthcoming resolution will be among the most consequential GST rulings since Mohit Minerals [2022] 138 taxmann.com 331 (SC). Until then, the fault line runs through the statute book and the orders pending in every jurisdiction.