Aays Exim Vs Union of India (Delhi High Court)
Delhi High Court has directed M/s Aays Exim to pursue its appellate remedy against a Show Cause Notice dated December 5, 2023, and a subsequent order dated March 10, 2024, issued under Section 73 of the Delhi Goods & Service Tax Act, 2017. The petitioner had also challenged the vires (legal validity) of Notification No. 09/2023-State Tax dated June 22, 2023, which extends tax deadlines.
Background of the Challenge to Notifications:
The challenge to Notification No. 09/2023-State Tax is part of a larger batch of petitions being heard by the Delhi High Court, with the lead matter being P.(C) 16499/2023 titled DJST Traders Pvt. Ltd. vs. Union of India and Ors. These petitions broadly contest the validity of various notifications (including Notification No. 56/2023-Central Tax and 09/2023-Central Tax) on the ground that the proper procedure, specifically the prior recommendation of the GST Council as mandated by Section 168A of the CGST Act, 2017, was not followed before their issuance. Concerns were raised that ratification, in some instances, occurred after the notification, and that some notifications incorrectly stated they were based on GST Council recommendations.
Judicial Precedents and Divergent Views:
The validity of Notification Nos. 09 and 56 of 2023 (Central Tax) has been subject to varied interpretations by different High Courts:
- The Allahabad High Courthas upheld the validity of Notification No. 09.
- The Patna High Courthas upheld the validity of Notification No. 56.
- Conversely, the Guwahati High Courthas quashed Notification No. 56 of 2023 (Central Tax).
- The Telangana High Court, without directly delving into the vires, made observations suggesting the invalidity of Notification No. 56 of 2023 (Central Tax). This judgment is currently under consideration by the Supreme Court of India in L.P No 4240/2025 titled M/s HCC-SEW-MEIL-AAG JV v. Assistant Commissioner of State Tax & Ors.
The Supreme Court, in its order dated February 21, 2025, in the HCC-SEW-MEIL-AAG JV case, acknowledged the “cleavage of opinion amongst different High Courts” regarding whether the time limits for adjudication of show cause notices and passing orders under Section 73 of the GST Act could have been extended by issuing these notifications under Section 168A. The Supreme Court has issued notice on the SLP and the prayer for interim relief.
