The Central Board Of Indirect Taxes And Customs And Ors vs. M/S. Barkataki Print And Media Services And Ors

Facts

The petitioners, the Central Board of Indirect Taxes and Customs and others, filed a review application seeking to overturn a previous judgment dated September 19, 2024. In that judgment, the Gauhati High Court had declared Notification No. 56/2023-CT ultra vires the Central Goods and Service Tax Act, 2017, and consequently quashed it. The sole ground for the review was that the GST Council had subsequently ratified Notification No. 56/2023-CT in its meeting held on June 22, 2024, alleging an apparent error in the original judgment. The respondents are M/s. Barkataki Print and Media Services and its proprietor, along with state tax authorities.

Held

The Court held that a subsequent ratification by the GST Council cannot cure a defect where a prior recommendation was statutorily required. The Court distinguished between a 'recommendation', which initiates a process, and 'ratification', which implies approval. It found that these two terms are not interchangeable. The Court noted that the petitioners' counsel was unable to provide any satisfactory answer to the Court's query regarding whether ratification could substitute for the mandatory recommendation under Section 168A of the CGST Act, 2017. Consequently, the Court found no grounds to exercise its review jurisdiction. The original judgment, which declared Notification No. 56/2023-CT ultra vires and quashed it, was not disturbed. The ratio decidendi is that statutory procedural requirements, such as prior recommendations, cannot be retrospectively validated by subsequent approvals if the statute mandates the former.

Key Issues

1. Whether a subsequent ratification by the GST Council can cure a defect in a notification that was initially issued without the required recommendation as per Section 168A of the CGST Act, 2017? The petitioners argued that the subsequent ratification by the GST Council on June 22, 2024, rectified the earlier defect, rendering the original judgment erroneous. They contended that ratification effectively validates the notification. The respondents, in the original writ petition, had argued that the notification was ultra vires due to the lack of a prior recommendation. The Court, during the review hearing, specifically questioned the petitioners' counsel on whether ratification could substitute for the mandatory recommendation required by Section 168A, noting the distinct meanings of 'recommendation' and 'ratification'. The petitioners' counsel could not provide an answer to this query.