Summary: This blog examines the ongoing judicial debate surrounding extensions of GST limitation periods in the wake of the pandemic and subsequent systemic challenges. It outlines the decision of the Hon’ble Madras High Court, which set aside Notification No. 56/2023 issued under Section 168A of the CGST Act, extending timelines for recovery orders for FY 2017-18, 2018-19, and 2019-20. The blog notes how this position differs from those adopted by the Hon’ble Guwahati, Telangana, and Bihar High Courts on the same matter, addresses the possible need for intervention by the Hon’ble Supreme Court, and outlines considerations for taxpayers.
When the COVID-19 pandemic struck, governments and Courts paused the clock on statutory deadlines, including those in tax laws. However, the implementation of Central Board of Indirect Taxes and Customs Notification No. 56/2023, dated December 28, 2023 (“Notification”), which sought to extend the deadline for issuing GST adjudication orders for the years 2017-18 to 2019-20, is at the heart of a growing legal storm. What began as an emergency response to the pandemic disruption has, over time, morphed into a contentious debate over statutory boundaries, taxpayer rights, and institutional accountability. Multiple High Courts across the country are examining whether the Government overstepped its authority while invoking pandemic-related powers under the GST framework. Although the Notification aimed to help revenue authorities address backlogs, many viewed it as an excessive and indefinite expansion of executive power, one that risked violating procedural safeguards under law.
This blog is a continuation of our previous blog titled Legal debate at tipping point over Notification extending GST deadline, published here. The current blog deals with recent Hon’ble Madras High Court (“HC”) decision, which has now added its voice to this growing debate with remarkable clarity. In a strongly reasoned verdict in Tata Play Ltd. v. Union of India,[1] the HC struck down the Notification as both procedurally ultra vires and substantively unjustified. However, while this finding offers procedural relief, the judgment stops short of holding that limitation has lapsed. Instead, it relies on the Supreme Court’s COVID-era exclusion order for “general and special laws”, dated March 23, 2020, read with order dated January 10, 2022, to hold that timelines remain open, not just for the reasons the Government had claimed, but for specific exclusion between March 15, 2020 and February 28, 2022 (“ SC Order”).
The HC’s verdict adds a vital layer to the ongoing legal discourse, reinforcing the foundational principles of legislative fidelity, procedural rigour, and taxpayer protection. This nuanced outcome appears to be pro-taxpayer in form, but not in substance and raises important questions on administrative overreach, judicial coherence, and the lingering ambiguity surrounding how the true scope of the SC Order during the pandemic would work. This comes amid a growing judicial divergence, with High Courts like Telangana[2] and Bihar[3] taking a more accommodating stance, and the Guwahati High Court[4] ruling against similar extensions.
Madras HC’s Reasoning
The decision hinges on two cardinal issues: procedural compliance and the scope of “force majeure” under Section 168A of the CGST Act. The HC held that the Notification was vitiated by procedural impropriety. The statutory mandate requires a GST Council “recommendation”, prior to the issuance of any notification under Section 168A of the CGST Act. In this case, the Notification was issued pursuant to a proposal by a Group of Ministers, a subcommittee of the GST Council, and ratified subsequently by the GST Council. The HC held this post-facto ratification insufficient, applying the administrative law principle delegatus non potest delegare, a delegate cannot further delegate its powers unless specifically authorised by the statute.
On the substantive aspect, the HC examined the justifiability of invoking “force majeure” as the basis for extension. The revenue argued that administrative delays, stemming from resource shortages and system inefficiencies, were exacerbated by the pandemic. However, the HC found these reasons unconvincing. Referring to communications from the Ministries of Home Affairs and Health, and to CAG’s findings, the Court concluded that COVID-19 restrictions were largely lifted by early 2022. The subsequent delays were found to be “self-inflicted” and not attributable to any uncontrollable external events, implying that the Notification lacked proximate justification under Section 168A.
Finally, the HC observed that the Notification reduced the limitation period for authorities to issue notices and orders under Section 73 of the CGST Act especially if the exclusion of the period from March 15, 2020 to February 28, 2022 as directed by the SC Order, was effectively considered taking away the GST authorities’ right to act during such period. Such a reduction in limitation could be struck down for violating Article 14 of the Constitution.
While the HC struck down the Notification, it did not declare all consequential notices and orders as void. Instead, it adopted a balanced approach, recognising that limitation may still be alive, not because of the Notification, but because of the SC Order on extension of limitation period.
The HC held that since the very foundation for issuance of notices and assessment orders — the Notification — was invalid, any action pursuant thereto cannot be upheld in their current form. Accordingly, it remanded such matters to the proper officer for fresh adjudication. Where the assessment order or SCN is under challenge, the HC directed that the taxpayer may submit a response within eight weeks. In both situations, the authorities have been instructed to grant a personal hearing and then pass fresh orders in accordance with law. By doing so, the HC struck a careful balance by invalidating the flawed Notification, yet preserving the viability of pending proceedings. This approach avoids a procedural collapse while reiterating that executive action must comply strictly with statutory conditions.
Diverging Judicial Views: Supreme Court’s Clarification Needed
With the Hon’ble Guwahati, Madras, Telangana, and Bihar HCs taking conflicting stands on the same issue, the legal position is now riddled with inconsistencies. The Hon’ble Guwahati HC struck down the Notification, emphasising that a GST Council recommendation is a statutory prerequisite, whereas a post-facto ratification is insufficient. In contrast, the Hon’ble Telangana HC upheld the Notification, interpreting the phrase “in respect of actions” in Section 168A to include proceedings affected by delays due to force majeure. It concluded that the Notification was a legitimate exercise of power to protect the rights of both taxpayers and the revenue from premature closure of assessments. The Hon’ble Bihar HC did not assess the procedural validity of the Notification in depth, instead it reasoned that since the SC Order had already excluded the period from March 15, 2020, to February 28, 2022, the Notification was valid. However, it held that timelines were extended only till the time provided in the Notification, contrary to Madras HC’s conclusion.
Thus, while both the Bihar and Madras HCs invoked the SC Order, the former used it to uphold the Notification, the latter used it to strike down the Notification, but preserved the underlying timeline.
This judicial discord on the meaning of “recommendation” under Section 168A, the interpretation of “in respect of actions,” and the scope of the SC Order has created operational uncertainty for taxpayers, especially those with pan-India presence. For compliance officers and tax departments, the divergent rulings complicate risk assessments, particularly where show cause notices or orders have already been issued relying on the disputed Notification.
The situation now demands authoritative clarification from the Hon’ble SC. Only a conclusive verdict can harmonise the interpretation of Section 168A, define the boundaries of executive power in extending limitation, and settle whether the exclusion period under the SC Order was intended as a limited relief for expiring actions or a general suspension of limitation under tax laws.
Implications: A Wake-up Call for Compliance and Clarity
For tax administration, the decision is a stern reminder that extraordinary powers must be exercised within the bounds of statutory procedure. The attempt to conflate administrative constraints with force majeure dilutes legal clarity and undermines the taxpayer’s trust in the system. The approach adopted by the Notification also highlights systemic inefficiencies, as it incentivises officers to delay assessments until the brink of limitation.
For taxpayers, this ruling has immediate and far-reaching implications. The ruling only offers a pseudo reprieve to those served with notices or orders relying on the impugned Notification. The judgment illustrates the importance of reading judicial orders with precision. Businesses should not presume that an invalid notification automatically renders the assessment time-barred. Instead, they must carefully analyse whether the SC Order continues to apply to their case.
The Madras HC’s verdict is more than a judgment on a Notification. It’s a principled stand favouring statutory discipline and taxpayer rights. It asserts that the objective of revenue collection doesn’t justify any measures that would permit tax authorities to act ultra vires. Arbitrarily extending statutory timelines not only leads to adjudication delays, but also creates uncertainty for taxpayers. This ruling is a stark reminder that as India’s GST regime evolves, it must be grounded in predictability, fairness, and institutional accountability.
For taxpayers, while the Notification’s invalidation may be cited as persuasive precedent in contesting overreaching notices, the limitation argument is far from settled. Until the Hon’ble SC weighs in, tax strategies must be carefully calibrated. The case serves as a critical reminder that the rule of law remains paramount in balancing administrative needs with statutory compliance.
[1] Ms Tata Play Limited v. Union of India, State of Tamil Nadu, Commercial Taxes Department, And Others, 2025 (7) TMI 772 – Madras High Court.
[2] M/s. Brunda Infra Pvt. Limited and Others v. The Additional Commissioner of Central Tax and Others 2025 (1) TMI 299.
[3] M/s. Barhonia Engicon Pvt. Limited & Others v. The State of Bihar & Others, 2024 (12) TMI 440.
[4] M/s. Barkataki Print and Media Services and ors. v. Union of India and ors., 2024 (9) TMI 1398 -Gauhati High Court and CBIC v. M/s. Barkataki Print And Media Services, 2025 (1) TMI 588 HC.