NTT Data Business Solutions Pvt. Ltd. Vs Union of India (Bombay High Court)
Bombay High Court has granted interim relief to NTT Data Business Solutions Pvt. Ltd., staying a garnishee notice dated February 14, 2025, that sought recovery of Rs. 2.18 crore in alleged Goods and Services Tax (GST) dues for the Financial Year 2019-20. The notice, issued by the State Tax Officer, Thane, instructed the company’s bank to remit the amount. The court’s decision came in response to a writ petition filed by NTT Data challenging the garnishee notice, the underlying demand order dated August 13, 2024, and the preceding show cause notice dated May 31, 2024.
NTT Data raised several grounds in its petition. Firstly, it argued a violation of principles of natural justice, claiming the show cause notice was never served upon them, rendering the subsequent demand order invalid. Secondly, and more significantly, it challenged the timeliness of the demand order itself. The order pertained to FY 2019-20, for which the assessment deadline would typically have passed earlier. The order was issued based on time extensions granted via Notification No. 56/2023-Central Tax (dated Dec 28, 2023) and Notification No. 56/2023-State Tax (dated Jan 16, 2024), issued purportedly under Section 168A of the CGST and MGST Acts. NTT Data contended these notifications were invalid (ultra vires) as they were allegedly issued without the mandatory recommendation of the GST Council, a prerequisite under Section 168A. If the notifications were invalid, the demand order would be time-barred.
The state’s counsel argued that Section 168A was specifically enacted to deal with force majeure events like the Covid-19 pandemic, justifying the notifications. However, the counsel could not definitively state whether the specific challenged notifications (from Dec 2023/Jan 2024) had received the GST Council’s recommendation. The High Court noted that similar challenges questioning the validity of these notifications were pending before it and other courts. It specifically mentioned that the Gauhati High Court had already struck down these notifications. While the Telangana High Court had ruled differently, upholding an assessment’s validity based on a Supreme Court order extending limitations (Re-Cognizance for extension of limitation), that decision is currently under appeal before the Supreme Court.
Considering these factors – the arguable questions raised, the pending litigation, the conflicting High Court views (with Gauhati HC striking down the notifications), the respondent’s inability to confirm GST Council recommendation, and the fact that similar interim reliefs have been granted in other cases – the Bombay High Court found that NTT Data had established a strong prima facie case. The Court issued Rule, admitting the petition for final hearing, and granted interim relief. It stayed the operation of both the garnishee notice (DRC-13) and the underlying demand order, directing the bank not to act on the notice and restraining tax authorities from taking any coercive action against NTT Data pending the final disposal of the petition. The matter was tagged with similar pending writ petitions.
Mr. Bharat Raichandani (through VC), with Mr. Aman Mishra, Advocates for the Petitioner.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
