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MANU/SC/0408/2017 SP,J & Dr.GRR,J Wp_1154_2024 & batch

9. It was common ground taken by learned counsel for the parties that Section 168A of the GST Act provides that extension notification can be issued on the recommendation of the GST Council. So far as notification No. 56/2023 is concerned, there was no prior notification of GST Council. The counter of the Department filed in these cases shows that the notification No. 56/2023 was issued on the basis of decision taken by GST Implementation Committee/Law Committee. Thus decision of Implementation/Law Committee was ratified by GST Council after six months from the date of issuance of notification No. 56/2023. The meaning of words 'recommendation' and 'ratification' were highlighted to show the difference between the two. The 'recommendation' is always prior in time which forms basis for taking a decision, whereas, 'ratification' is a subsequent exercise for a decision which has already been taken. In view of statutory mandate ingrained in Section 168A of the GST Act, subsequent 'ratification' cannot satisfy the requirement of statute i.e., 'on the recommendation of the GST Council'.

13. Sri S. Ravi, learned Senior Counsel, submits that the respondents may rely on certain judgments, including Bajaj Hindustan Limited v. State of Uttar Pradesh 5 and other judgments to support their stand that 'ratification' is permissible and 'ratification' relates back to the original date of the decision. However, it must be noticed that the said judgments are relating to 'ratification' in exercise of executive/administrative power. It does not deal with exercise of subordinate legislative power. Counter of State Government (para No. 33) filed in W.P. No. 21851 of 2024 was pointed out where State itself treated the power of issuing impugned notifications as 'legislative power'. The judgment of Allahabad High Court in Graziano Transmissions (supra) was also referred to support the same point. Since (2024) 25 Centax 55 (Pat.) 5 (2016) 12 SCC 613 SP,J & Dr.GRR,J Wp_1154_2024 & batch impugned notifications are issued in exercise of legislative power therefore, 'ratification' aspect dealt with in certain judgments of Supreme Court while exercising executive/administrative power cannot be pressed into service. Putting it differently, it is urged that subordinate legislative and administrative actions cannot be judged on the same parameters. Since statute envisages the requirement of recommendation of council before taking decision of extension of limitation, no other method can be adopted.

59. Noticing the words 'deemed ratification' used in GST Council Meeting, Sri Dominic Fernandes, learned Senior Standing Counsel for CBIC, fairly submits that there appears to be no statutory backing for recording any such 'deemed ratification'. The ratification is broadly referred as 'deemed ratification'. The learned Standing Counsel further urged that five High Courts have considered the impugned notifications. The Kerala High Court in Faizal Traders Private Limited v. Deputy Commissioner, considered the Notification Nos.9/2023 and 13/2022 and dismissed the petition. Likewise, the Division Bench of Allahabad High Court in M/s.Graziano Trasmissioni (supra) considered the challenge to Notification Nos.9/2023 and 13/2022 and did not interfere in the said notifications.

65. Learned Standing Counsel relied on the judgment of Supreme Court in National Institute of Technology v. Pannalal Choudhury 32 to submit that the ratification is permissible. The ratification could very well be retrospective in nature. For the same purpose, he relied on the judgment of Municipal Commissioner, Jamnagar v. R.M.Doshi 33. Clause 10(c) of Article 279A of the Constitution was referred to highlight that any procedural flaw or irregularity is immaterial and will not cause any dent on the decision of GST Council. To elaborate, it is 2015 (11) SCC 669 2023 SCC Online SC 550 SP,J & Dr.GRR,J Wp_1154_2024 & batch submitted that, although, before issuing Notification No.56/2023, there existed no prior recommendation of GST council, the fact remains that while undertaking the exercise of "ratification", the GST Council could have retrospectively recommended for the extension of limitation covering the same period, for which, ratification exercise was undertaken. In that event, no fault could have been found against such decision making and issuance of notification. Thus, it is a simple procedural infirmity/irregularity, which does not cause dent on the decision. Thus, in the teeth of Clause (10)(c) of Article 279A of the Constitution, said irregularity deserves to be ignored.