SKT Swamy Auto Agency Vs Union of India
Date: July 27, 2025
Subject Matter
Notification 56/2023 - CT Invalidated, Cases Remanded for Fresh Adjudication
Summary
This common order addresses multiple writ petitions challenging the validity of Notification No. 56/2023 issued by the GST Council. Both the petitioners' and respondent's counsels agreed that the issue is identical to a prior ruling by the same court in a common order dated June 12, 2025, in W.P.Nos.17184 of 2024, etc., batch.
The precedent-setting order had found Notification Nos. 9 and 56 of 2023 to be vitiated and illegal for several reasons. These included:
The notifications curtailed the limitation period already extended by a Supreme Court order under Article 142, thereby being contrary to Section 168A of the CGST Act.
They were based on an erroneous assumption of law and constituted a misconception of the Supreme Court's order.
They extinguished the authorities' vested right of action by diminishing the limitation period, which was deemed arbitrary.
The recommendations leading to the notifications were made without examining relevant materials.
Specifically, Notification No. 56/2023 was issued prior to the GST Council's recommendation, and a recommendation by the GST Implementation Committee (GIC) cannot substitute the GST Council.
Following this precedent, the court concluded that the impugned notifications in the current petitions were also illegal.
The court ruled that Notification No. 56/2023 dated December 28, 2023, is vitiated and illegal. All impugned assessment/adjudication orders are set aside. The court remanded the matters back to the assessing authority for fresh consideration.
If the challenge is to an assessment/adjudication order, the petitioners must treat the impugned orders as a show cause notice and submit their objections within eight weeks.
If the challenge is to a notice, the petitioners are also given eight weeks to submit their objections.
In both scenarios, the authorities must pass fresh orders after providing the petitioners an opportunity for a personal hearing.
The court also addressed a submission from the Additional Government Pleader regarding imposing a pre-condition for cases where orders are set aside, but ultimately decided against it to maintain uniformity with the precedent order.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
These Writ petitions have been filed by the petitioners challenging the validity of Notification No.56/2023 issued by the GST Council.
2. As the issue involved in all these Writ Petitions, is identical in nature and the relief sought thereunder, is interconnected, these Writ Petitions are being disposed of vide this Common Order.
3. When this Writ Petition is taken up for hearing, the respective learned counsel for the petitioner and learned counsel for the respondent, would submit that the issue involved in the present Writ Petitions has already been decided vide the common order of this Court, dated 12.06.2025 passed in W.P.Nos.17184 of 2024, etc., batch, wherein, this Court has categorically held in paragraphs 9 to 12 as under:
“i) The authorities under the CGST Act shall have the benefit of exclusion of the period 15.03.2020 to 28.02.2022, while reckoning limitation under sub section (2) and (10) to Section 73 of CGST Act, in terms of the of the Supreme Court dated 10.01.2022 passed under Article 142 of the Constitution.
ii) Notification Nos. 9 and 56 of 2023 stands vitiated and illegal for the following reasons:
a) It results in diminishing / curtailing the limitation which was otherwise available in view of the order of the Hon’ble Supreme Court under Article 142 of Constitution, and thus contrary to the object of Section 168A of CGST Act.
b) It proceeds on an erroneous assumption of the limitation available and a misconception as to the scope and effect of the order of Hon’ble Supreme Court under Article 142 of Constitution. The impugned notification made on an erroneous assumption of the position in law is unsustainable on the ground of being arbitrary.
c) The impugned notification results in extinguishing vested right of action with the authorities under CGST Act by diminishing the limitation thus suffers from the vice of arbitrariness.
d) The impugned notification is issued on the basis of recommendation made without examining relevant materials discussed supra and thus stands vitiated.
e) In addition to the above reasons, impugned notification No.56/2023 is made even prior to the recommendations of the GST Council, failure to comply with the statutory mandate renders the notification illegal.
f) The impugned notification no.56/2023 is issued on the basis of the recommendations of GIC which cannot be a substitute for GST Council and thus stands vitiated.
11. There are issues relating to violation of principles of natural justice, lack of jurisdiction, errors apparent on the face of record etc. These are questions which will have to be re examined by the assessing authority inasmuch as the thrust of the petitioner’s submissions before this Court as well as before the authorities has been primarily on the jurisdiction in view of the challenge to the validity of the notification.
12. In light of the present order, this Court is inclined to remand all the matters back to the assessing authority for passing orders afresh:
i. In case challenge is to the order of assessment/adjudication, petitioners shall treat the impugned orders as show cause notice and submit their objections within a period of 8 weeks from the date of uploading of the Web Copy of this order and the authorities shall proceed to pass orders afresh after affording the petitioners an opportunity of hearing.
ii. In case the challenge is to the notice it is open to the petitioner to submit their objections within a period of 8 weeks from the date of uploading of the Web Copy of this order and the authorities shall proceed to pass orders afresh after affording the petitioners an opportunity of hearing.
13. Accordingly, the writ petitions stand disposed of. No costs. Consequently, connected miscellaneous petitions are closed. ”
4. Therefore, considering the submissions made by the learned counsel for the petitioner and by following the aforesaid order dated 12.06.2025 passed by this Court in W.P.Nos.17184 of 2024, etc., batch, this Court holds that the impugned Notification No.56/2023 stands vitiated and illegal. In such case, all the impugned orders are liable to be set aside.
5. Accordingly, this Court pass the following orders:
i) The impugned Notification No.56/2023 dated 28.12.2023 stands vitiated and illegal.
ii) In case challenge is to the order of assessment/adjudication, petitioners shall treat the impugned orders as show cause notice and submit their objections within a period of 8 weeks from the date of uploading of the Web Copy of this order and the authorities shall proceed to pass orders afresh after affording the petitioners an opportunity of hearing.
iii) In case the challenge is to the notice it is open to the petitioner to submit their objections within a period of 8 weeks from the date of uploading of the Web Copy of this order and the authorities shall proceed to pass orders afresh after affording the petitioners an opportunity of hearing.
6. With the above directions, the present Writ Petitions are disposed of. No costs. Consequently, connected Miscellaneous Petitions are closed.
7. At this juncture, the learned Additional Government Pleader (Taxes) appearing for the respondents would submit that as far as the aforesaid order dated 12.06.2025 is concerned, the said batch of writ petitions were filed 11/2years back and hence, the petitioners cannot apply similar yardsticks for the present cases, which are listed today. He further submitted that he had instructions to seek for pre-condition in cases, where the impugned orders are set aside.
8. As far as the above request is concerned, in the batch of petitions pertaining to similar issue, the Hon’ble Single Judge (MSQJ) has already passed the aforesaid order dated 12.06.2025 without imposing any condition. Thus, in order to follow the uniformity, this Court has remitted the matters without conditions. It is made clear that with respect to the cases which are going to be filed in future, the submissions with respect to the imposing of the condition will be considered.