Engineers INDIA Limited vs. Union Of INDIA & Ors.

Facts

The petitioner, Engineers India Limited, a Public Sector Undertaking, filed a writ petition challenging an Order-in-Original dated April 30, 2024, and two Show Cause Notices dated January 31, 2024, issued by Respondent No. 3. The impugned order held the petitioner liable for tax amounting to ₹1,50,81,034. The petitioner contended that the Show Cause Notice and the subsequent order were barred by limitation. They also challenged Notification No. 56/2023-Central Tax dated December 28, 2023, and Notification No. 09/2023-State Tax dated June 22, 2023, arguing they were ultra-vires Section 168A and Section 73 of the CGST Act/DGST Act. The petitioner further argued that the impugned order was unreasoned and lacked application of mind, merely stating the petitioner's reply was "examined and not found satisfactory."

Held

The Court noted that the respondents' counsel fairly conceded that the impugned order was not supported by any reasons and was liable to be set aside on that ground alone. The petitioner's counsel agreed to the setting aside of the impugned order and remand of the matter to the concerned officer without prejudice to the petitioner's rights and contentions, including the challenge to the validity of the impugned notification. Consequently, the Court set aside the impugned order dated April 30, 2024. The matter was remanded to the Adjudicating Authority for a fresh decision within a period of 08 weeks from the date of the order. The Adjudicating Authority was directed to examine the reply filed by the petitioner to the impugned Show Cause Notice and also to examine the question of whether the order under Section 73 of the CGST Act was barred by limitation. All rights and contentions of the parties were expressly reserved. The Court did not decide the validity of the impugned notifications or the limitation issue on merits.

Key Issues

1. Whether the impugned Show Cause Notice dated 31.01.2024 and the consequent Order-in-Original dated 30.04.2024 were issued beyond the period of limitation prescribed under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act) and Delhi Goods and Services Tax Act, 2017 (DGST Act)? 2. Whether Notification No. 56/2023-Central Tax dated 28.12.2023 and Notification No. 09/2023-State Tax dated 22.06.2023, extending the time limit for issuance of orders under Section 73(9) of the CGST Act, are ultra-vires Section 168A and Section 73 of the CGST Act/DGST Act, particularly as they were issued after the COVID-19 disruption period? 3. Whether the impugned Order-in-Original dated 30.04.2024 is liable to be set aside for being unreasoned and lacking application of mind, as it summarily rejected the petitioner's detailed reply? Petitioner's arguments: The petitioner argued that the SCN and order were time-barred, and that the extension notifications were invalid as they were issued post-COVID without a subsisting force majeure event, and not on the recommendation of the GST Council. They also contended the order was unreasoned. Revenue's arguments: The respondents, through their counsel, conceded that the impugned order was not supported by any reasons and was liable to be set aside on that ground alone. They proposed remanding the matter for fresh decision.