Allowed

M/s.Tirumala Constructions v. The Commercial Tax Officer

Telangana HC3 Aug 2022WP/5010/2021

Case brief

AI extract

What is this about?

The High Court held that the Telangana State Legislature lacked legislative competence to enact the Telangana Value Added Tax (Second Amendment) Act, 2017. Post the Constitution (101st Amendment) Act, 2016, the State's power to tax general goods was subsumed under the concurrent GST regime. The extension of limitation periods was deemed ultra vires the Constitution.

What did the court decide?

The Second Amendment Act is declared unconstitutional; notices issued and orders passed under Section 32(3) of the VAT Act relying on the extended limitation period are quashed.

M/s.Tirumala Constructions Vs The… — Constitutional and Fundamental Rights | Telangana HC (2022)

¶1

HIGH COURT FOR THE STATE.OF TELANGANA AT HYDERABAD (Special Originat J urisdiction)

¶2

WEDNESDAY ,THE THIRD DAY OF AUGUST TWO THOUSAND AND TWENTY TWO

¶3

PRESENT

¶4

THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE MRS JUSTICE SUREPALLI NANDA

¶5

WRIT P ETITION NOS: 7743 & 13520 0 F 2020 5010.876 6, 1 2512,12 546.23379 & 25570 0F 2021 2922. "t s97 1, 1 5988 16382 17381 & 18767 oF 2022

¶6

WP N O:7743 O F 2020

¶7

Between:

¶8

Secunderabad. M/s.Binjrajka Rep. by Steel ils Tuhcs Drrc,t:lr.ri Lrmjlcd. r,,,r,: n"rn"ii'b-ini"jtalOlZ/101 , West lViarredpally,

¶9

AND

¶10

...PETITIONER

¶11

The Deputy Commercial.Tax Officer,ll, [,4arredpally Circle, Begumpet Division, Hyderabad.

¶12

The Commercial Tax Officer, lv4arrcclpally Circle, Hyderabad.

¶13

The State of Telanoanr fep lty ifs prrrr(:rpal Secretary, Revenue (CT) Department, tetan[ana Scerera,,ar Hf,r,,ii;;""'''"

¶14

..RESPONDENTS

¶15

Petition under Articre 226 0f the constitLrtion of rndia praying that in the -circlrnnslaoces-stated^{in the affidavit} r1"cl ir,eiu;iih]: ,nrir.,I#"'J-if9-r?,^li ilffi^{tx5"",H#I.t4:;?r,qi,ir::i,n::r'#l'FJHJskffi} lfl;irtr Assessment -proceedinos ciated 03/03/202b r"i"inu tax period 2013_14 under TVAT Act, 2005, without granhrtrt_ suffrcrent nppo.trnity of being heard, and not even considerinq the ot)rections of thr: petitioner riiea on o3/o3r2o2o, disarowing the claim of input tax, with..rO , r.isi, lr,,,ro n,.,y gool and strfficient reasons, as arbitrary, contrary to raw. barcd iry timriati.ri rii^",u t period Aprir, 2013 to January, 2014. the sarne is rn vrolalion of pin"iptes of natural justice and consequentry set aside the Exp:rrle Ardit Assessment proceeding.';al;; ;s1 Respondent dated 03/03/2C20 as nUlt anrj void.

lA NO: 1 OFjl020

Petitiorr under^{Section 151 CPC prayingthat in the circumstancesstated in} the affidavit^{filed in suppod ot itte petltion'itre Hign..Courtmay be pleased to grant} stav of all^{funher pror:eeo i-"gt} '^{-i[ ;'o"nctof the. ExparteAuditAssessment} ;##.il;;:;ri"o"oi)os"raid'oi^{tL r} "t Respondent,^{for the tax period 2013-14,} pending disposal^{ot tfre aOo"veWrit Petition' otherwise'the Petitionerwill be put to} severe loss and^hardshiP'

¶20

Counsel for^{1l're['ctitione r: Sl{l SHA|KJEELANI BASHA}

¶21

counselforrheRespondentNos.l&2:SRl.K.RAJIR'EDDY,ScFoRcT

¶22

Counselfor':heRespondentNo'3:GPFORCOMIIERCIALTAXES

¶23

WP NO:^{1351100F 2020}

¶24

Between:

¶25

M/s.Steev.rrr^{c I-nterpnses'H' No 7-1.49-O'MankammaThota'Karimnagar-} sos 0(r1^{state r;f r.l;;G;;,n"p uv iti ptbprietor Mr'Govini Sathish Kumar}

¶26

...PETITIONER

¶27

AND

¶28

1 . The D:ptrty^{Conlrnissioner(CT) (FAC)' Karimnagar Division' Karimnagar'}

¶29

The Ccmr.nefcial^{Tax Officer-|, Karimnagar Clrde' 1(arimnagar'}

¶30

The State^{of I elangana,Rep by.itsPrincipal S,ecretau'Revenue (CT)}

¶31

Departrne lt. Te'arrgana secretariat, HyderaDao'

¶32

...RESPONDENTS

¶33

Petitir,rr^{L:ndcr Arlicle 226 of the Constitution} .of^{lndiapraying that in the} circumstatrr; )s^{state.l in tnt uifiJauitfiled therewith' the High Court maybe} ;b*;;^{,;i,: issue,wr,1 ot r./lrnorrr.or any other appropriate.rarril-:r:11,.,:,^"t} direction^{cle claring the actionof the 1'r Respond-entin passing theF<evlslon} Proceedings,^{rsateaz4.oti620-served on the' pet'itioneron 09'07'2020for the} Assessmenl^{Year 201rfZ-unOer the CentralSale-s Tax Act' 1956' as arbitrary'} contrary to^{law. without} i'iitai"tion,^{barred by limitationand the same is in} violation ot^{principlesot n"t'iatiustice and consequentlyset asidethe Revision} Proct;eding:^{rf :h€, l st respondent,dated'24'03'2020-asnull andvoid'}

¶34

lA NO: 1 Of²⁰²⁰

¶35

Petrti )rr uncler^{Sectlon 151 CPC playlng tla!} tl^{the circumstancesstated in} rho :rffirra' rited i suoDort ot^{if-.l" petition,itrJHigtiCourt may be pleased t9 Slant} stay of all^{llrlrlorl)roceecl'"gt,pt'""tto the bonsequentiai Orders of ttre 2ird} ,"-rir",,0,,, ,^{il;rc,rU3.0520'2-0 !t"0on the petitioner on 09 07'2020 for the} Assesstrett^{Yea' 2o'1 r r z} 'nJe'^{the CentrallSaks Tax Act' 1956' pending}

¶36

disposal of the above writ Petition, as otherwise, the petitioner would be put to severe loss and hardshiJr

¶37

Counsel for the l,cririoncr: SI . SHAIK JEELANI BASHA

¶38

Counsel for the Respondent Nos. 1 & 2: SRl. K. RAJI REDDY, SC FOR CT

¶39

Counsel for the Respondent No. 3: Gp FOR COMMERCIAL TAXES

¶40

WP NO: 5010 OF 2021

¶41

Between:

¶42

|,4is.Tirumala Constructions, 5/354, Deepthisri Nagar, Chandanagar, lVliyapur, Hyderabad - 500 049. Ranga Reddy District. Rep. byits partnerillr.b Bhar;; Kunrar

¶43

...PETITIONER

¶44

AND

¶45

'1 . Thc Conrrnercial T:rx Ol'ficer, I,4adhapur-.1 Circle, Hyderabad Rural Division, Hyderabad.

¶46

The Comnrcrcial Tax Officer, Madhapur Circle, Ranga Reddy District.

¶47

The State of Teiarrqrrna, Rep. by its principal Secretary, Revenue (CT) Depadment, Tel:rnr;ana Secretariat, Hyderabad.

¶48

...RESPONDENTS

¶49

Petition undr:r Arlte.tr, 226 of the Constitution of lndia praying that rn the circumstances stiite(i i, rhe affidavit filed therewith, the High court nray ire pleased to issue writ of rr4andamus or any other appropriate writ or order or direction declarinl; the .r, rlron of the 1st respondent in passing the Assessment Order, dated 31 .Oll 2O!l) passed Exparte, for the tax period 2013_14 under thc Telangana Valur-, Adci.ii Tax Act 2005, during the lock down period, without serving notices, levying tax @ 14.5 perientage-o?isdles irT Fla"ts, as againsl tax @ 1/1.25 percentage rrnder 'or.position scheme opted by the petitioner, without verifying the books of at.runts and returns, without providing an opporlunity of being heard to lhr-' Petrtr.nt:r and also without service of the Assessment order and notices, is contrary to thc provisions of the TVAT Act 2005, as arbitrary. contrary to the provisiors^, rf tlre TVAT Act 2005, without jurisdiction, barrccl by limitation and in vrol:rtiorr of principles of natural justice and set aside the Assessrncnt Ordr:r of thc l st resl)ondent, dated 31 .O3.2020 passed Expa,te. as null and vc.rid.

¶50

lA NO: 1 OF 2021

¶51

Petition un(lcr Sr:,-tr,r, r 5 i cPC praying that in the circumstances statlld in thr: affidavit filed in supl,rl o{ thc petition, the High Court may be pleascci to suspend the ope ration o{ llre Assessment order of the l st resp0ndent, dat.rci

¶52

¶53

31 .O3 .2O2(t^passed Exparte,^{for the tax period2013-14ttnder the Telangana} Value Adde d Tax Act 2005,^{pending disposal of the aboveWrit Petition,as} otherwise, the^petitioner will be^put to^{severe loss and hardship.}

¶54

Counsel fot the l'e titioncr: SftI. SHAIK^{JEELANI BASHA}

¶55

Counsel fot the Respondent Nos.^{1 & 2: SRl. K. RAJI REDDY, SC FOR CT}

¶56

Counsel fot the Respondent No. 3:^{GP FOR COMMERCIAL TAXES}

¶57

WP NO: 87(^,6 0F 2021

¶58

Betwee n:

¶59

M/s.Fam Tradtng C,empany,^{154-45411,f:eelkhana,} Begum Bazar.Hyderabad. Rep. by its Partner^{Mr.Ram Karan Ojlta}

¶60

AND

¶61

1^'f lre t)eputy Commissioner^(CT), Charminar^{Division. Hylerabaci}

¶62

2 lhe C.omrnercial Tax Officer,^{Audit. CharminarDivision,Hyderabad}

¶63

3 Ttre State of Teiangana, Rep. by its Principal^{Secretary, Rr:venue (CT)} Depa 1ment, Telangana Secretariat, Hyderabad.

¶64

RESPONDENTS

¶65

Petition under Article 226 of the Constitlltion of^{lndiapraying that in the} circurnstanc 3s stated in the affidavit^{filed therewith, the Hiqh Court may be} pleascd to issue Wirt of Mandamus or any other appropr^{att: writ or order or} direclron declaring the aetion of the 1st Respondent^{in passing the Revision} Proceedings, daled 261082O20 served^{personally on lhe petitroner on 0210312021} and by RPAD on O4lO3l2O21 in revising the^{Ordersof the 2nd respondent, dated} 14111t2O13 for the tax^period O1lO7l2O12^{to 31107120'13and for the tax period} 01/08/2013 lo 3010412014, dated 09/06120'14 under^{tlre Teltrngana ValueAdded} Tax Act 20tr5, by suo motu under Section 32(2)^{of the Telanqana Value Added} Tax Act 2( 05, without providing the information of^{RegionalVigilance and} Enforcernen: Olficer Report and without^{grantingsuff icicntopportunilyof being} heard to the Petitioner, as aoitrary, contrary to the^{provisions of the Act, barredby} limitation, without iwisdiction, bias and the same^{is in violationof principles of} naturrl lLrstir>e and contrary to AAiele^{14 and 19(iXg) of the Constitutionof lndia} and the sanre is in violation of^{principles of natural juslice andconseqLrently set} asicir: the R,)vision Proceedings of the^{'1st respondent, dalc'-j 26l08/2020 as null} and vo id

¶66

lA NO:^'l O F 2021

¶67

Petition under section.l sr cpc praying that in the circunrstances stated rn lhe affidavit filed in support of the petition, tf,."Ui,7n iorrt may be pleasec, to grant slay of all further proceedings, pursuant to the Revisron proceedings of the .1st respondent, dated 26108120:9.:9r*d on the petitionter on O2/O3'2O2i for rhe tax periods 01/07/2012 to 31/O712013 ana otrcaiiot:i ,o :oioarzol4 under the Telangana Vatue Added I1I. A"t ZOOS, penOing iisposat of the above Writ Petition, as otherwise, the petitioner wouti oe prt iJ ."r"r" Ioss and hardship.

¶68

lA NO: 2 OF 2021

¶69

Betwee n:

¶70

(CT), Charminar Division, HycleralrarJ. .1., ftoor, Gasan 7,?gy:tffilil,ssioner

¶71

...PETITIONER/1^ST RESPONDENT

¶72

AND

¶73

'1 . lt,4/s.Ram Trading , Company, 15.g_454r r Feutk,)inj ' Beoum Baza r. Hydera bad. Rep. by its iDartner Ui.Rori,,n,n U,tra -uyJ

¶74

...-RESPONDENTA/YRIT PETITIONER

¶75

2 The Commercial Tax Officer, Audit, Charminar Division. Hycir:rabad.

¶76

The State of Telanoana, Rep. by its principal Sccrclary. Ruvenue (Cl ) Department, retan[ana'Se-i"tr',.i]i'Uvj"IjIrii

¶77

...RESPONDENTS/RESPONDENTS

¶78

Petition under section 151 cpc praying that in the circumstances stated i, i" the affidavit filed in support.of the petitio;, i.o ftigf, Corrt ,ra,-rru r;;;; 08t04t2021.vacate inlerim orders passed in lA No: 1 of 2021^"Wp tto. 8766 ot )Oii'-irt"a

¶79

Counsel for the l,etitioner: SRI. SHAIK JEELANI BASHA

¶80

counsel for the Respondent Nos. 1 & 2: sRI. K. RAJ| REDDY, sc FoR cr

¶81

Counsel for the Respondent No. 3: Gp FOR COMMERCTAL TAXES

¶82

WP NO: 12512 0F 2021

¶83

Betwee n

¶84

fvlis.Cokl Care Services .private Limited, plot No.8,345. I Floor, Y,iii1l1]'Ryl,m,^{Hy*rabad - s00 070 Siit,, ,ii'r"ionqunu} Rclr i-ry its rvrrnaqrnU Llircctor Mr.p.Upender Rao

¶85

.,.PETITIONER

¶86

ANO

¶87

The Dtrputy^{Commissioner (CT)SaroornagerrDivision'Hyderabad'}

¶88

The As sistant^{Commissioner (CT),Audit' Saroornagar Division'Hyderabad'}

¶89

The State^{of Telangana,Rep- by.its PrincipalSecretary'Fievenue (CT)} Department.^{Telangana SecretariatHyderaDao'}

¶90

...RESPONDENTS

¶91

Petitio-l under^{Article 226 of the Constitutionof lndiapraying that in the} circumstances^{stated in tfre afiiJault fileC therewith' the High Court lnay be} wirt of Mandamus^{or any otherappropriatewrit or order or} ;L;;'il-t;r" Direction dectaring^{tnu ,"il"Li the 1st respondent in passing th9 ry^qly} Revision Proceedings'^{outJl alozlzo21} '^{servedon the petitioner on 09/0'32021 '} for the tax^{pe ,riod20't3-14,i",Ving ;n']ty @ 25 Percent under Section 53(1Xli)of} the Telangar^{a Value Adcted-ii, iJt zoos,r-evisingthe Penalty Proceedings of the} 2nd respondent,^{dated zotoztzoli,whereinlevied Penalty(@ '10 Percent under} Section 53(r)(i)^{of tf,e fetanglna VATAct 2005 as arbitrary'contrary to law'} without iuristliction.^{patentlf, U'ai'"d t'y titnit"'it)n' without authority of law' andin} violation of^{principlesof natural justiie ancl r;on-s^equently set aside the.Revision} Proceedings^{of ttre t st resionOtnt,tl"tutj18to212021wrth rcg3rdto Penalty}

¶92

IA :1OF 2021

¶93

Petitic'n under^{Section151 CPC prayinll thrat kr the circumstancesstated ih} the affidavit^{filed in support of tne petitron,ir," ui.qt court may be pleased-to grant} stav of all^{ftlrther proceedingt, p"t'unt to the Revisiorr Proceedings of the 1st} R:ilil;^i';; I^{lirczrzinll'withresaro ro penatry.for rhe tax period 2o13-14} under Telanlana^{Value noO? fax nci zoos, pcnding disposalof the above Writ} ;;ti;", ,;^{i;therwise, the Petitionerwoulclt)e put to sevcre loss and hardship'}

¶94

Counsel for^{the Pctitioncr:SRt' SHAIK JEELANI BASHA}

¶95

Counsel for^{the RespondentNos'1 & 2: SRt'K' RAJI REDDY'SC FOR CT}

¶96

Counsel for the^{RespondentNo' 3: GP FOR COMMERCIAL TAXES}

¶97

wP NO: 12ti46^{oF 2021}

¶98

Between:

¶99

lirnited.. Plot^No.B-345,ll Floor, M/s.C:old Care^{ServicesPrivate} 070. Stalc^{<rf Telangana. ReP} by its VinasthaliPurarn,^{HYderabad- 500} M-ina^ging birector^{lv'lr'P'Upender Rao}

¶100

...PETITIONER

¶101

AND

¶102

1 The l)eputy Comntissloncr^{(CT),SaroornatlarDtvistotr' Hyderabad}

¶103

The Assistant commissioner (cr), Audit. Saroornagar Divrsion, Hyderabad.

¶104

3 I1"^^Sl1g-..f Tetangana,Rep by irs princip:rl Ser:retary, Revenue (CT) Uepartment. I elangana SeCretaflat. Hyrler.ilr;_irl

¶105

...RESPONDENTS

¶106

Petition under Article 226 of the constitrtion of lndia praying that in the circumstances stated in the affidavit filed therewith, the High^'cJurt may be pleased to issue wirt of Mandamus or any ottrer appropriate writ or order or Direction declaring the action of the 1st respondent in passing the penalty Revision Proceedings, daled 18.o2.2021, served on the petitione, oin og.og.zo2t, for the tax period 2012-13. Ievying penarty @ 25 percentage under Section 53(1xii) of the Telangana Varue Added rax Act 2005, revising the penarty Proceedings of the 2nd respondent, dared 20 .o2.2o1 5, wherein levreo eenalty @ 10 percentage under Section s3(1)(i) of the Teta.gana vAT Act 200s, as arbitrar!, contrary to law, without juris(lictaon, patenfly trarrecl by limitation, without authoriiy of law, and in violation of principles of natural jLrsticc and consequenfly set aside the Revision Proceedings of the l st rcspondr:rrt. dated 18.o2.2021 with regard to Penalty

¶107

lA NO: 'l OF 2021

¶108

Petition under Section 151 cpc prayi.(l tlr.rt in the circumstances stated in the affidavit filed in support of re petirion. th. Hrr;h court may be pleased to grant stay of all further proceedrnqs. pursu.rnt to tltu Ruvrsron proceedings of tnE tst Respondent, dated 18.02.2021 with rcryanl t. pr:nrrrty, for the tax pelioa zon-ls under Telangana value AdcJeci rax A(:t. 2005. pending disposal of the above writ Petition, as otherwise, the Petitioner woulci br: put to severe loss and hardship.

¶109

Counsel for the l,ctitioner: St{1. SHAIK JEELANI BASHA

¶110

Counsel for the Respondent Nos. 1 & 2; SRI K. RAJI REDDY, SC FOR CT

¶111

Counsel for the Respondent No. 3 : GP FOR COMMERCIAL TAXES

¶112

WP NO: 23379 OF 2 021

¶113

Between:

¶114

fvtls.Cold Care Services Prrv:rte Lrrlitcci. plot No.B-345, ll Floor, Vanasthalipuram, Hyd_erabad - f,00 070 State of Telangana. Rep. by its Managing Director N4r.P Up:errrler Rao

¶115

..PETITIONER

¶116

AND

¶117

The Deputy Comnrissioner (CT). Saroornarrar Division, Hyderabad_

¶118

The Assistant Conrnrissiuner (CT). Audit. S;,rroornactar Divisiorr, Hyderabad

¶119

¶120

The Commercial Tax^{Officer, Vanasthalipuram-llcircle,saroornagarDivision,} Hyderabad.

¶121

The State of Telangana,^{Rep. by its PrincipalSecretary' Revenue (CT)} Department. Telangana^{Secretariat,Hyderabad.}

¶122

...RESPONDENTS

¶123

Petitic n under Article^{226 of the constitutionof lndiaprayingthat in the} circumstances stated in the^{affidavit filed therewith, the High courtmaybe} pleased to issue writ of lr,4andamus^{or any other appropriatewrit or order. or} birection d€claring^{the actionof the 1st respondentin passingthe Revision} proceedings, datei ZaIZ.ZO20, served on the petitioner on 09.03,2021,^{for the tax} period 2OlZ 13 under the^{Telangana Value Added Tax Act 2005,computing the} iax, taking^{gross receipts of Rs.1 1 ,7 5,54,823t-(ind@ngVAT) as against} ns.Z,Sq,OS",e ial^{(includingVAT),revising-{he -fievise4-.Audit .Aesessment} Proceedings of the^{2nd respondent,dated 20.01.2015,wherein the tax was levied} on^{purchaieturno'/erbasis,whichis also contraryto laW, levying tax on work-in-} progress tur nover of Rs.3,80,89,00O/-,^{which was subjectedto. tax for the tax} p"r[o zot: 14 unde r the TVAT^{Act, results in double taxation,as arbitrary,} contrary to I lw withorlt^{jurisdiction, ex faciebarredby-limitation, without authority} of law, anci^{n ,.,iolatiorrof prrrrciples of naturaljustice and consequently set aside} the Revisror^{Prr:cr:erirrrgsof the 1st respondent,dated 2a.12.2O20and both the} Audit Assessm€rnt^{Proceeciingsof the 2nd respondent,dated31 '12 2014 and} 20.o1.2015.

¶124

IA NO: 1 OF 2021

¶125

Petitrr,n under section^{151 CPC prayingthat in the cifcumstancesstatedin} the affidavit tiled^rn suppo(^{of lhe petition,the HiEh, courtmaybe pleasedto} suspend the^{i.rperattol,of the Revision Proceedingsof the 1st Respondent,dated} 28.iZ.2OZO irrctudrng^{the Proceedings of the 3rd respondent, dated15.07.2021} for the tax rcriotl 2012-^{1:J under the TelanganaValue Added Tax Acl, 2005,} pending drsp,osal of the above writ^{Petition, as othenrvise, the Fetitioner would be} put to severc loss;tnd hardshiP.

¶126

Counsel for the I'erili()ltr:^{SRI. SHAIKJEELANI BASHA}

¶127

Counsel for the Respondent^{Nos.1 & 2: SRl. K. RAJI REDDY'SC FOR CT}

¶128

Counsel for the Respondent^{No. 3: GP FORCOMIIJiERCIALTAXES}

¶129

WP NO: 25570 OF^?021

¶130

Between:

¶131

M/s.S allron Tyrcs Lirnited,^{Plot No.9, lDA, Nacharam, HyderabadRep' by its} C E Cl ari,l nLrthorisctl Signatory^{ttrlr. M.N.Venkaatesh}

¶132

...PETITIONER

¶133

AND

¶134

1- Tlre commerciar rax.officer, (The Assistanl commissioner of state Tax) Nacharanr-ll Circle. Hyderabad.

¶135

The State of Telangana, Rep. by its princip:rl Secretary, Revenue (CT) Department, Telangana Secretariat, Hydeiabad.

¶136

...RESPONDENTS

¶137

Petition under Articre 226 of the constitution of lndia praying that in the circumstances stated in the aff idavit f iled therewith, the High - cdurt may be pleased ro rssuc u writ or I\4andamus or any other appropriate writ or order or Direction declaring the action of the 1st respondent in revying penarty of Rs.37,30,127l- equar to 100 percentage Entry Tax for the tax p"iioul 2olz-is to 2016-17 under Tclangana Tax on Entry of Goo<is Into Local Areas Act 2001, as illegal. arbitrary, barrecl l)y limitation, without authority of law and jurisdiction. in violation of principles of naturallustice.

¶138

lA NO: 1 OF 2A21

¶139

Petition ur'rd.ir seclron 151 cpc praying that in the circumstances stateci in the affidavit fired in su1;port of the petition, the High court may be pleased pleased to grant stay of alr further proceedings, in pursuance of the penarty Proceeciings of thc 1St R.spondent, dated 25.0B.2021, served on 03.0g.202.r tor the tax periods 2012 13 r. 2016-17 uncler Telangana Tax on Entry of Goods lnto Local Areas Act 2oo1. pe.ding disposal of the writ petition, as otherwise, the Petitioner will bc put lo severe loss and hardship.

¶140

Counsel for the t,cririoner: SlU. SHAIK JEELANI BASHA

¶141

counsel for the Respondent No. 1: sRl. K. RAJI REDDY, sc FoR cT

¶142

counsel for the Respondent No. 2: Gp FoR coMMERcIAL TAxEs

¶143

WP.NO:2S22OF 2022

¶144

Betwee n:

¶145

It4/s.Salora Inlernatio,al Limited,, D13/4, Okhla phasc-2, New Delhi - 110 020. Rep. by its l\rlanagirrq Drrector Mr.Tarun Jiwarajka

¶146

...PETITIONER

¶147

AND

¶148

Tlre Assistant Contrtrrssioncr (CT), Begumpet Division, Hyderabad

¶149

2 The Commercial Tax Officr:r. tvl.G.Road-S.D.Road Circle, Begumpet Divisron Hyderabad

¶150

j The St:rte of Telanqana, Rcp. by its Prrncipal Secretary, Revenue (CT) Deparlment, Telangar[r Ser:rtttariat, Hyderabad

¶151

¶152

...RESPONDENTS

¶153

Petiti,rn un<ler Article 226 of^{the constitutionof lndia prayingthat in the} circumstances stated in^{the affidavit filed therewith,thc High court maybe} pleased to issue any order or direction^{more particularly one in the nature of writ} of Mandamrrs or any other^{appropriatewrit or orderor direction declaring (a) the} Act No.26l2017 daled o2.12.2O17^{issued under the Telangana vAT Act. 2005 to} further Amend Telangana^{vAT Act, 2005 is in violationof Article 213. 246 and} 246A. Entry 54 of Listfsection^{19 of the Constitution 101 A.mendmentAct, 20'16} as ultra vires the^{tlonltitution of lndia and void ab intio and declare (b) the action} of the 1st respondent in^{passing the Audit Assessment Proceedings,dated} 25.03.2021 . served on the^{Petitioner cn 29.11.2021, for the tax period 2014-15} under the Telangana^{Value Addedfax Act, 2005, withoutconsideringthe} objections of the Petitioner,^{dated1'9.03:2021, levyingtax} @^{t4 5 percentag€on} tvlobile Pho res as unclassified^{goods, as aE'ainsl} &5^{percerdageunderEntry} 39(15) of th,: lV Schedule^{of theTVAfAct, 2005, and-asper G.O lvls No To dated} 29.09.2015, the Petitioner^{is liable to tax (EL-s percentag€r only and the Audit} Assessmenl Proceedings,^{dated25.03.2021, is ex facie barred by limitation for the} t.rx^period 2)14-15 and^{also the same is in violationof prinCilrlesof natural justice} and conserluently^{set-asidethe Audit Assessment Proceedings of the 1- st-} responclcnt. rjated 25.03.2021^{served on the Petitioneron 29.'1 1 2021 . as null and} voiti.

¶154

lA NO: 1 OF 2022

¶155

Petit()n under section 151 CPC^{prayingthat in the circumstances statedin} the affidavit filedⁱⁿ support^{of the petition,the High court may be pleasedto} suspend th,) operation of^{the Atidit Assessment Proceedings passedby the} respondent. dated 25.03.2021^{servedon the Petilioner on 29.11.2O21 for the tax} period 201,t-15 under the Telangana Value^{Added Tax Act, 2005,} ,encling disposal of lhe above^{writ petition,as otherwise, the Petitione'willbe put to severe} hardsh ip

¶156

Counsel fot the I'etitioner: SRI' SHAIK JEELANI^BASHA

¶157

Counsel for the Respondent^{Nos. 1 & 2: SRl. K. RAJI REDDY, SC FOR CT}

¶158

Counsel for the Respondent^No. 3:^{GP FOR COMMERCIAL TAXES}

¶159

WP NO: 1sl71OF 2022

¶160

Betweetr

¶161

lvlis^r.A.lnfra Projects Ltd, D.No.7-1-58,^{Flat No.10'1} 1 st F loor, Antrutha Busrness Complex, Ameerpet,^{Hyderabad- 500 0'16} Rep. trv its lvlanaging Drrecl or N4r. [4. lvl.Rehman.

rErlrr(JttEr\

AND

1 The Additional Commissioner of State Tax, Punjagutta Division, Hyderabad

¶166

The Commercial Tax Officer, Khairatabad Circle, Hyderabad.

¶167

The Assistant Commrssioner (ST), Sanalhnagar Circle, Punjagutta Division, Hyderabad.

¶168

The State of Telangana, Rep. by its Principal Secretary, Revenue (CT) Departmenl, Telangana Secretariat, Hyderabad.

¶169

...RESPONDENTS

¶170

Petition under Article 226 of lhe Constitr-rtion of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Courl may be ple;lsed to issue Wirt of Mandamus or any other appropriate Writ or Ordcr or directiorr declaring. (a) the Acl 2612O17 daled O2.12.2017 issucd undcr the Telanqana VAT Act 2005 to further Amend Telangana VAT Act, 2005 is in vrolation of Article 213, 246 and 2464, Entry 54 of List ll, Sectron 19 ol the Conslrtution 101 Amendment Act, 2016 as ultra vires thc Constitutron of lndia and vo^jri ;lb initio and declare, (b) the aclion of the 1St Respondent lr passinq the Revision Proceedings, dated 091O212022 served on the Petitioner on tOl03l2OZ2 undcr Section 32(2) of the VAT Act, for the tax periods 2011-12 to 2014,15 under the Telangana Value Added Tax Act, 2005, without considering the objections of the Petitioner and not considering the decisions relied upon by the Petitioner. as ate. era contrary to provisions of the TVAT Act 2005. and atso the Revision Proceedings, is contrary to the decision of the Honorable Sulrrr-,tne Courl in Itil/s Gannan Dunkerly and Company case and decision of lhe Honorablc Gularat Hiqh Court, and also the same is in violation of Principles of Natural Justice..rnd Rule of Law and consequently set aside the flevision Proceedings of thc 1St r esporrtlent, dated OQlO2l2022 as null and void.

¶171

lA NO:^'1 OF 2022

¶172

Petition under Section 151 CPC praying that^jn thc clrcurnstances stated in the affidavit filed in supfurt 6f thE paltitibii; the High Court may be plcased to Suspcnd the Operation of the Revision Proceedings, dated Oglo2l2022 passcil try the 1st respondent under Section 32(2) ot lhe VAT Act, for thc tax periods 20'1 1-12 lo 2014-15. daled 0910212022 and Effectual Orders of tho 3rd rcspondent. .j.rt{rd 2B/O212O22 passed under the Telangana Value Addecl Tax Act. 2005. pcnrlinq disposal of the above Writ Petition, as otherwise, the Petitioner r"vill bc lrur t0 severe loss and hardship-

¶173

Counsel for the Pctitioncr: SI(I. SHAIK JEELANI BASHA

¶174

Courrsel for tlre Respondent Nos. 1 to 3: SRl. K. RAJI REDDY, SC FOR CT

¶175

Counsel for the Respondent No.4: GP FOR COMMERCIAL TAXES

¶176

WP NO: 15()88 OF 2022

¶177

Between:

¶178

M/s.lr'larvel Hospitality Services^(P) Ltd, Chintal^{lrilainRc,ad,} R.R.District. State of Tetangana. Rep. by its [Vanaging Direclor Mr.P. Suryanarayana

¶179

...PETITIONER

¶180

AND

¶181

'1 . The tleputy Commissioner (CT), Secunderabad Division, Hyderabad

¶182

The [teputy Commercial Tax Officer-ll, Enforcement Wing, Hyderabad.

¶183

The P,ssistant Commissioner^(CT) LTU, Secunderabad t)ivision, Hyderabad.

¶184

The C;ommercial Tax Officer, Vidyanagar Circle, Hyderabad.

¶185

The S'tate of Telangana, Rep. by its Principal Secretary, Revenue^(CT) Depa'tment, Telangana Secretariat, Hyderabad

¶186

,..RESPONDENTS

¶187

Petititm under Article 226 of the Constrtution of lndi;l^praying that in the circumstancas stated in the affidavit filed therewith, the High Court may be pleased to.rssue Writ of Mandamus or any other appropriate Writ or OEder or directisn^.de.c{aring, (a) the Acl 2612017 dated 02.12.2017 issued under. the Telangana^'r'AT Act; 2005 to further Amend Tclangana /AT Act, 2005 is in violation^-of Article 213, 246 and 2464, Entry 54 of Lrst ll, Section 1g sf the Constitution^'tO1 Arnendment Act, 2016 as ultra vires the Constitution of lndia'and void ab initio and declare^(b ) the action of the¹ st Respondent in^passing the Revision Prtrceedings, dated 23.03.2021 served on the Petitioner on 27.O3.2O21 under Sectisn 32(2) of the VAT Act, for the tax^period 2013-'14 under the Telangana '/alue Added Tax Act, 2005, without consrdcrrng the documentary evidence fik:d by the Petitioner, as arbitrary, co,rtrary to^provisions of the TVAT Act, 2005, ald also the Revision Proceerlings is in violation ol Principles of Natural Justice and Rule of Law and consequently set aside the Rcvision^Proceedings of the 1st respondent, dated 23.O3.2021 as null and void.

¶188

lA NO: 1 F 2022

¶189

Petition under Section 151 CPC^praying that in the ciroumstances stated in the affidavlt filed in support of the^petition, the High Court may be^pleased to Suspend the Operation of the Revision Proceedings, datcd 23.03.2021^passed by the 1st resp,:ndent under Section 32(2 | oI the VAT Act, for t1e tax^periods 201314, passed,:nder the Telangana Value Added I'ax Act, 2005, including Demand Notice of th,: 4lh respondent, dated 25.02.2022,^pendinq drsposal of the above Writ Petition as otherwise, lhe Petitionei will be^put to sevcre loss and hardship.

¶190

¶191

Counsel for the Petitioncr: Sltl. SHAIK JEELANI BASHA

¶192

Counsel for the Respondent Nos.^.1 to 4: SRl. K. RAJI REDDY, SC FOR CT

¶193

Counsel for the Respondent No. 5: GP FOR CCTMMERCIAL TAXES

¶194

WP NO: 16382 OF 2022

¶195

Between:

¶196

lv1/s.Kanchan Films Private Linrited, Shop No.7, Jamuna Archade, Jambagh, Hyderabad. Rep. by its Director, It4r.Rajendra C Jain.

¶197

...PETITIONER

¶198

AND

¶199

The Joint Commissioner (CT), Abids Drvision, Hyderabad.

¶200

The Deputy Commercial Tax Officcr, Narnp;:lly Circle, Hyderabad.

¶201

The Assistant Commissioner (ST), Bn rkatprrra^-S u ltan Bazar Circle, (Formerly Commercial Tax Officer, Sultan Bazar Crrclc). Atrds Division, Hyderabad.

¶202

The Branch fvlanager, lndian Overseas Bank, Bank Street, Hyderabad.

¶203

The State of Telangana, Rep by its Princip:rl Secretary. Revenue (CT-ll) Department, Telangana Secrctariat. Hyderabad

¶204

..RESPONDENTS

¶205

Petition under Article 22tl of thc Constrtr-rtrr.ln of India praying that in the circumstances stated in the affrdavrt filc(j ttrerewith. the High Court may be pleased to issue Writ of lVlandanrLrs or irny othc:r appropriate writ or order or direction declaring(a)the Act 26/2017 dated 02 122O17 issued under the Telangana VAT Act, 2005 to further Anrend Telangana VAT Act, 2005 is in violation of Article 213, 246 and 2464, Entry 54 of List ll, Section 19 of the Constitution 101 Amendment Act. 2016 as ultra vrres lhe Constitution of lndia and void ab intio and declare (b)the actron of lhc 1s;t respondent in passing the Suo Motu Revision Proceedings, date(i 20.12 2()21 p.rsscd under Section 32(2) of the Telangana VAT Act, 2005, in revisrr.rq the ALrdit Assessment Proceedings passed by the 2nd respondent, dated 23.12.201 5. for the tax^period 2013-14 lo 2014-15 under the Telangarta Value Addr:rl Tar Ar1 2005. as arbitrary, contrary to law, bias, against weight of evidence :rnd prolr;rhilitics of thc case, ex-facie barred by limitation and consequently sct aside llrc I?{)visron Proceedings of the 1st respondent, daled 2O.12.2O21 ;rs null itnd voicl

¶206

lA NO:^'l OF 2022

¶207

Petition under Section 151 CIPC l-rr;ryinil ttrat in the circumstances statedⁱⁿ the affidavit filed in support of tlrt. rrr:litrort. llrr: Hir;lt Criutl 1113y be pleased to direct the 3rd respondent to return the Blnker's Chcqu,-: for tis.2,50,000/- collected from the account of the Petitioner fronr the '1th r.)spon(lcnt^t>ank and if the amount is en-

¶208

l,l

¶209

cashed to the State Excheqr-rer, return the amount of Rs.2,50,0001 to the Petitioner forthr.vith, in the interest of^justice and equity, pending disposal of the above Writ Petition. as otherwise. the Petitioner would be^put to severe loss and hardship.

¶210

lA NO: 2 Ot 2022

¶211

Petiti rn r,nder Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of thc^petition, the High Court may be pleased to suspend th<r operation of the Revision Proceedings of the 1st respondent, dated 20.12.2021 passed for the tax period 2013-14 to 2014-15 under the Telangana Value Added Tax Act 2005, including Effectual Ordeis of the 3rd respondent, dated 22.12.2021, pending disposal of the above Writ Petition, as otherwise, the Petitioner w,ruld be^put to severe loss and hardship.

¶212

Counsel fot the I'rtitioncr': sl{t. SHAIK JEELANI BASHA

¶213

Counsel for the Respondent Nos. 1 to 4: SRl. K. RAJI REDDY, SC FOR CT

¶214

Counsel for the Responder.rt No. 5: GP FOR COMMERCIAL TAXES

¶215

WP NO: 17381 OF 2022

¶216

Between:

¶217

M/s.PVV^;r)fr,l Linrited.^(Formerly ttll/s. Thirthankar lnfra LimitBd),4th Floor, My Home Tycocrr. Lifcstyle Building, Greenlands, Begumpet, Hyderabad. Rep. by its Dir?cto. [ir.Kott:rla Zaneer Ahamed

¶218

...PETITIONER

¶219

AND

¶220

'1 . The Comrrrercial Trx Of{icer J,ffi Begumpet Circle, Hyderabad

¶221

The Statc of Telaneana, Rep. by its Principal Secretary, Revenue (CT) Departrne,rt, Telanqana Secretariat, Hyderabad.

¶222

...RESPONDENTS

¶223

Fetitic n urrder Arlicle 22G of the Constitution of lndia praying that in the circumstanc{)s sta:ed in the affidavit filed therewith, the High Court may be pleased to issur: Wril of Nrandamus or any othqr appropriate Writ or Order or direction dec larrnq

¶224

(a) the Act 2ail2t)1 / daled O211212017 issued under the Telangana VAT Act. 2005 to further /rnren<l Tel3nqana VAT Act. 2005 is in violation of Article 213,246 and 246A, Entrv 5.1 of Lrst ll, Seclion 19 of the Constitution 101 Amendment Act. 20i6:rs uiir. vrrr,s irc C,rrsirtuti(rrr r.rf lr-rdia atrci voi,j ab intio and deciare.

¶225

(b) thr rclron i)f tlrci I st Respondent an passing the Best of Judgement Audit Assessment F'r;;,;c -;d^{jn,Js. (liltcd} 0.1./03/2022 in l'orm VAT 305 for the tax^period

¶226

¶227

20'l 5-16 under the Tclanr.]ana Value: Added Tax Act 2005, without considering the objections of the Petrtioncr, as arbitrary. contrary to the provisions of the Act, more particulady the Audit Assossmcnl Proceedings of the 1st respondent is ex-facic barred by limitation relyinc; upon Ordinance No.2l2O17, dated 17lOGl2O1 7, without jurisdiction and in violation of Principles of Natural Justice and consequently sel aside the Audit Assessnrent Proceedings of the 151 respondent, dated O4lO3l2O22, as null and vc.:rti.

¶228

lA NO: 1 OF 2022

¶229

Petition under Section 15.1 CPC praying that in the circumstances stated rn the affidavit frled in supfiort of the^petition, the High Court may be pleased to suspend the Operation of the Audit Assessment Proceedings of the l st respondent, daled 041O3i2O22. for lhe tax^period 2015-16, passed under the Telanqana Value Adderi Tax Act 2005,^pending disposal of the above Writ Petition, as otherwise. tlrc [){]trtioner will be^put to severe loss and hardship

¶230

Counsel for the l'ctitiorrcr: \lll, SHAIK JEELANI BASHA

¶231

counsel for the Responcient No. 1: SRl. K. RAJI REDDY, SC FOR CT

¶232

Counsel for the Respondent No. 2: GP FOR COMMERCIAL TAXES

¶233

WRIT PETITION NO: 18767 OF 2022

¶234

Between:

¶235

M/s.Binjralka ValLrr: Steels [)rivate Linrited., Binjrajka Bhavan, West lVlarredpally, Secu ntiora lrztci 500 026, State of Telangana, Rep. by its Director, h/r Rahul Binlralka.

¶236

...PETITIONER

¶237

AND

¶238

The Comnrercial Tax Offrcer, Begumpet Deputy Csmmissioner Office, Hyderabad.

¶239

The Conrmercial Tax Offici:r, lt4arredpally Circle, Begumpet Division, Hyderabad.

¶240

The State of Telangtan;r Ri:p by its Principal Secretary, Revenue (CT) Department. Telanganr S.icretari.rl, Hyderabad.

¶241

...RESPONDENTS

¶242

Petilion r-inder Artrr:lt: 22t.,^,,f th€r Constitution of lndia praying that in the circumstances stated in tlrr; :ffrri;rvit filed therewith, the High Court may^tre pleased to issue Wid of lvlantlalnLrs c)r arry other appropriate writ or order or direction declaring the irr:lrrrrr 1,l tlrr: 1st respondent in passing the Penally Proceedings, dated 29.01J 2o?: str,.'cri on tlre^p<ltitioner on 05.O4.2O22 for the^t.)x period 2O14-15 under Sectron 0:l( 1)(ii) of the Telangana Value Added Tax Act, 2005, levying penalty @ 25 pr:rr:entilqc of the disputed tax, without considerrrrrl

¶243

¶244

the objectrons of the Petitioner, as arbitrary, contrary to law, and in violation of Principles of Natural Justice, ex-facie barred by limitation and consequently set aside the F'enalty Proceedings passed by the 1St respondt:nt. daled 29.O3.2O22 as null and void.

¶245

lA NO: 1 Ot. 2022

¶246

Petit.on under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the^petition, the High Court tn;ry be^pleased to^grant stay of all further proceedings, pursuant to the Penalty Proceedtngs of the 1st Respondent, dated 29.03.2022 tot lhe tax period 2014-15 under the Telangana Value Addr;d Tax Act, 2005, pending disposal of the above Writ Petition, as otherwise. lhe Pelitioner would be put to severe loss and hardship.

¶247

Counsel fo'the Pctitioner: SRI. SllAtK JEEIANI BASIIA

¶248

Counsel fo'the Respondent Nos. 1 & 2: SRl. K. RAJI REDDY, SC FOR CT Counsel fo'the Respondent No. 3: GP FOR COMMERCIAL TAXES

¶249

The Court rnade the following:

¶250

¶251

¶252

THE HON'BLE THE CHIEF JUSTICE UJJAL BHTIYAN AND

¶253

THE HON'BLE MRS JUSTICE SUREPALLI NANDA

¶254

WRIT PETITION Nos.7743 & 13520 of 2O2O 5010,8766. t25 72 12546 23379 &,25570 of 2O2l 2922 1597 | 15988 L6342 17381 & 18767 of2022

¶255

COyIt{pITI OBDERi tpet tt..c rtotibte tLLe Ch,t1 .JLtsrt.:.: i.tlit Fii!i!,1.:,

¶256

IIearc,l Mr. Shaik Jeelani Basha, Iear-nr:rl corrrrscl iirr thc petitioners and Mr. K.Raji Redrlr,, lcirln(rrl St rrior- Stanclirrg Counsel lor the Conrru<:r-c ial^'l-ax L)('l)ill trncnt appearing for the respondent s

¶257

It is submitted that the present u/rit pelitrur)s ;.u c covc'rcd by the judgment delivered on 05.07.-202f in \''.1). No.7893 of 2O'2O and batch (M/s. Sri Sri

¶258

Engineering Wcrks v. Deputy Commissioner (CT))

¶259

..\ccordingly, the writ pctitions arc :rllos't.<l ir-r

¶260

l crrrrs of tl'rc alblcsaid judgmcnt.

¶261

Miscellaneous applications penciirig, if any, shail

¶262

stand closed. Hon ever-, there slrali blr rro ordc:r as to

¶263

cos ts

¶264

WP.Nos. 7743 & 13 0 of 2020 & 2379 ot 2021

¶265

That Fiule Nisi has been made absolute^{as abovewitnessthe Hon'bleSri} Ujjal Bhuyan, The Chief Justice on this^{Wednesday, The Tlrird day of August,} Two Thousand and Twenty two.

¶266

sd/- r. r{AGALAl€flMt DEPUTY REGISTRAR , 1 ,TRUE COPY/1 . _tl_tl

. _tl_tl

SECTION OFFICER

To,

The Deputy Commercial Tax Officer-ll,^{f,4arredpallyCirrilc. Begumpet} Division, Hyderabad.

¶272

The Commercial Tax Officer, lVtarredpatly^{Circle, Hyderirbad.}

¶273

The Principal Secrelary, Revenue^(CT) Department,^{Stat€ of Telangana'} Telangana Secretariat, Hyderabad.

¶274

The Deputy Commissioner^{(CT)(FAC), Karintnagar Diviston,} Karimrragar,

¶275

The C<mmercial Tax Officer-|, Karirnnagar^{Circle. Kartmnagar,}

¶276

The Commercial Tax Officer,^{tVladhapur-1Circle, Hyderah'ad Rural Division,} Hyderabad.

¶277

The Commercial Tax Officer, Ivladhapur^{Cir<;le,RangaRecdy District.}

¶278

The Dtputy Commissioner^(CT), Charminar^{Division. Hyderabad}

¶279

The Commercial Tax Officer, Audit. Charminar^{Division, l-lyderabad.}

¶280

The Dtputy Commissioner^(CT) Saroornagar^{Division, Hydembad.}

¶281

11.The A:;sistant Commissioner^(CT), Audit, Saroornagar^{Division, Hyderabad.}

¶282

¶283

12.The Commercial Tax Officer, Vanasthalipur;lm-ll^{Circle, Saroornagar Division,} Hyderabad.

¶284

1 3. The Commercial Tax Officer,^(The Assistant^{Conlmissiorrt-'r of State Tax)} Nacha am-ll Circle, Hyderabad.

¶285

14.The Afsistant Commissioner^{(CT),Begumpet Division, Hyderabad}

¶286

15.The &mmercial Tax Officer, lrF.G.Road-S.D.Road^{Circle, Begumpet Division,} Hydererbad

¶287

The Atlditional Commissioner of State^{Tax, Punlagutta Dt'riston, Hyderabad}

¶288

The Commercial Tax Officer, Khairatabad^{Circle. Hyderal.ad}

¶289

18.The Asrsistant Commtssioner^{(ST), SanathnagarCircle, Ptrniagutta Division,} Hyderzrbad.

¶290

¶291

'l9.The Deputy Commissioner (CT). Secunderabad Drvision, Hyderabad 20.The Deputy Commercial Tax Officer-ll, Enforcement Wing, Hyderabad.

¶292

21.The Assistant Commrssioner (CT) LTU, Secunderabad Division. Hyderabad.

¶293

The Commercial Tax Officer, Vidyanaqar Circle. Hydcrabad.

¶294

23.The Joint Commissioner (CT), Abids Divrsion, Hyderabad.

¶295

24.Ihe Deputy Commercial Tax Officer, Nampally Circle, Hyderabad.

¶296

25.Ihe Assistanl Commissioner (ST). Barkatpura Sultan Bazar Circle, (Formerly Commercial Tax Otficer, Sultan Bazar Circk:). Abids Division, Hyderabad.

¶297

26.The Branch Nilanager, lndian Overseas Bank. Bar.rk Street, Hyderabad.

¶298

27.The Commercial Tax Officer, Begumpet Circle. Hyderabad.

¶299

28- The Commercial Tax Officer, [t4arredpally Circle, Be gurnpet Division, Hyderabad.

¶300

29.One CC to SRl. SHAIK JEELANI BASHA Aclvor;atc [OPUC]

¶301

One CC to SRI K. RAJI REDDY, SC FOR CT IOPl.lCl

¶302

31.Two CCs to GP for Commercial T:rxes. Hiqh Court for tire State of Telangana. [OUT]

¶303

32.Two CD Copies.

¶304

33.One Spare Copy

¶305

(Along with a copy of the order dt O5iOl t22 in WP NO. 7B93|2O2O & batch)

PIV

l()

I \

HIGH COUtiT

DATED:03/0 8/202ti

COMMON OIiDER

WP Nos: 7743 & 13520 OF 2020, 5010, 8766, 12512, 12s46,23379 & 2s570 0F 2021, Nt2' 15971.1s988, 16382, 17381 & 18767 0F 2022

¶314

Allowing the WPs / without costs.

¶315

-/-'
kog" hE s x,.', 16
+
oJ
27. BII llu
1'
 -)2 (
t
1
^ _ 1--/
W

¶316

¶317

THE HON'BLE THE CHIEF JUSTICE UJJAL BHIryAN

¶318

AND

¶319

THE HON'BLE SMT. JUSTICE P.MADHA IrI DEVI

¶320

WRIT PETITION Nos.7893, 9550, L6527, L6a53, 16896, 169o3 0F 2o2o, 494. 7 12a, 705.4, 9622. tOO46. LL414. Lt996. L277q, -!s215, 15822. 15841. 17095, t7LO2, 1,7314, 17988 , 18258,20079 ,207LO, 2074a,2L542,226s1,22940,23336,233a6,242a2, 2556t. 27 294,275_33, 28797, 297 43, 32L29. 326s3 32697 and 34054 OF 2O2L

¶321

COMMON JUDGMENT & ORDER:

¶322

(PerIIon'ble the Clrit:l .Jusll((' L i-till IjlrLr,,,rrr)

¶323

Issue raised in :Lll the ri rit petitions being identical, those were heard togcthcr irncl ruc l;cit'rg disposed of by this common judgment ancl or-der

¶324

We har,e hearrl \lr'.S.Ravi, learned senior counsel, Mr.S.D.,varakanerth, lr,arnecl st.rrior counsel, Mr.S.R.R. Viswanath, Mr.V.Bhaskar Reclcl-r'. lVlr.Shrrik .Jeelzrni Basha, Mr.Karan Talu'ar, Mr.G.Narenclrir Cht'rtr. \1r'.../.A.Siva Kartikeya, Mr.P.Karthik Ramana, Mr.B.Srinivrrs. Ilr.Tr.j Prakash Toshniwal, Mr.Pasam Mohith ancl Mr. Vcnkarrarn Rc.rlrlv Mantur, learned counsel for the petitioners; ar-rd Nlr.ll.S.l)t-etsirtl. Ie:rrned Advocate General for the State of 1'clarrg:rnrr rrlong^,.r irlr \lr.li.Raji Reddy, learned senior standing corrnsel for Cornmcrc itrl l'axes.

¶325

{

¶326

Challenge made in this batch of writ^{petitionsis to the} constitutionality of Telangana Value^{Added Tax(Second} Amcndmcnt; fut,2017.

¶327

lt is the contention of the petitioners that Telalgana^Value Added Tax^(Second Amendment) Act, 2Ol7 is^{ultra uires the} Constitution of India and thus unconstitutional.^{As a corollary,} pra)-er ha:; been made that all notices and orders issued^{or passed} on the str':ngth of the extended period of limitation of^six Yeerrsⁱⁿ terms ol the aforesaid amendment ect should be declared^as illegai, nrr I and void and quashed accordingly.

¶328

Belirr, proceeding further and to understand the^pror,'isions in its prol't'r- pcr-spective, it would be apposite to first advt'rt^{to the} Telang:ur,, 'rillrc Added Tax Act, 2005, more^{particularl-r',thosc'} provisions n hrch have been either omitted or amc'nded^or substit Llte(l b-r virlue of the Telangana Value Added Tax^(Second Amendtttt t t1 {t t.^)017.

¶329

Tht'^'l'elarrgana Value Added Tax Act, 2005^s't'r s^initiall-i' enacted ;r; the ,Andhra Pradesh Value Added Tax Act. 2005.^After bifurcatjorr o: rire State, insofar State of Telalganzr is^cotrcerned. the abovl^{,'r).i('irncr"rt} has been renamed as^{"The Telatlgrlrla Value} Added Tir:; A,:t. f005 (briefly, 'the VAT Act", hereinafic'r).^{h is arrr}

¶330

Act to provide for and consolidate the law relating to lew of Value Added Ta-x (VAT) on the sale or purchase of goods in the State ol Tclangana and for matters connected therewith and incidental thereto.

¶331

Chapter V of the VAT Act deals with procedurc and administration of tax, returns and assessments. It comprises of Sectiorrs 20 to 1O. Section 2O deals ',vith returns and sell asscssments. As per Sub-Section (1), every dealer registereri r:rrclt-r Scction 17 of the VAT Act, shall submit such return or retLlrns along ri'ith proof ol payment of tax in such mannr'r. s itltir-r such tirne ancl to such authority as may- be prescribecl. Sr-rlt Scction (-1) savs that every dealer shall be deemed to h:rvc bccn assessed to ta-x based on the return filed by him, if no asscssment is marlc rlithin a period of four years from the date of filing of thc retLtrl)

¶332

Section 21 deals with assessments. Sub-sectiorr (1) of Scctiorr⁾ 1 s:rl s that u,here a VAT dealer or a Trlrrtor.'cr Tux (TOT) clealer i:rils to file a return in respect of an-y tax periocl u.ithin thc prcsc rilrt-cl pcriocl, thc authority prescribed shall zrssess tltc dealer Ior tlrt's:tid period lor such default in the manncr presr.rilrt'rl

¶333

¶334

8.1. As per Sub-section^(2]r, if a^{VAT dea.ler or TOTdealer} submits a. return along with evidence for fuil^{paymerltof tax,} subsequent to the prescribed time the^{assessmelltmade under} Sub-Section (1) shalt be withdrawn without^{prejudiceto arty} interest or penalty leviable.

¶335

8.2. Sub-Section (3) deals^r,r'ith a situali';n^u'herethe authority^prescribed is not satisfied '"vith^{the rettl rn filed by the} VAT dealer or TOT dealer or the return appears tt;^{lle incorrect or} incomplett:, in which event, he shall^{ma-ke the ass,:'ssmentto the} best of his^judgment within four^{years of due datc of the return or} within fou.r years of the date ol filing of thc^{retur-rr, u l'richever is} 1ater.

¶336

8.3. Power to conduct scrutinv of accounts is^providedin Sub-section (a) and making of assessment in the^{e vent} of^willful evasion of tax is dealt with in Sub-Section^{(5). In Sub Section (6)} the presr:ribed authority has been empos^t't cd to^make reassessment when the assessment was made under^{Sttb'Sections} (i) to (5) and such assessment understates the corrc:c--t tiL\ liability of the dealer, within a period of four years^{frornthc date of such} asse ssmerrt. As per Sub Section^{(7), s'here} aniisst'sslllctlthas been deferred by the Commissjottcr undcr^{Sr-rl-r St rtron (5) of}

¶337

¶338

Section 32 or as the case mav be, bv the Appellate Tribunal under the proviso to Sub-Section (4) of Scctiorr 33 on account of any stay granted by the Appellate Tribunal or- lrv thc llish Colrrt or b,r, the Supreme Court, or whereas appcirl or othcr proceedings 1S pending before the Appellate Tribunztl or the High Court or the Supreme Court involving a qnestion ol'lnu hrrving er rlirect bearing on the assessment in question, tl-re 1;t,riocl rlr-rr-ing rvhich the stay order was in force or such appeal or pr-occcriinrl s:rs 1;cnding shall bc excluded in computing the pcriod of four years or six years as the case may be for the purpose of rnal<ing th(, ilsscssntent.

¶339

8.4. Sub-Section (8) sa.vs thi t rr lrer-c irl .rssessment made has been set aside by an_v Court or ll tlte;\ppclktlr"l'ribunal, the period between the date of such irssrssrncrrr and tl-re date on rvhich it has been set aside shall bc t'rclurlt'cl in computing the period of four years or six years :rs rhc cfts(' nral bt, for making arrv fresh assessment.

¶340

Section 3l provides for appcal ro rrppcllate authoritv. As per Sub-Section (1), any VAT dealer or T()T rlealer or an-'other dealer objecting to any order passecl or ltroce,,rlirrg recorded by any ar-rthority under the provisions of r}-re \ A'l Act. r-rther t han an order passed or proceeding recorded lt-i :rrr .{clclitional Conrmissioner or

¶341

¶342

Joint Commissioner or Deputl, Commissioner, may within^{3O days} from the date on u'hich the order or^proceeding was^{served on} him, appeal to such authority in the manner prescribed. As^per the first proviso, the appellate authoriry- may admit an^appeal within a furthcr period of 3O days if he is satisfied that the appellant had sufficient cause for not^preferring the appeal^within the initial period ol 3O ciar-r's. Thc second^proviso says that unless the appellilnt produces proof of^payment of 12^YzVo of the^disputed tax, penal --v, intcrc'st or .url otircr amount, the appeal so^preferred shall not tre adrnitted b-r, the appellate authority. Sub-Sections⁽²⁾ to (6) lay dow'n the proi cclttrt' to be followed by the appellate authority; the relit'f therl ma, f 1:^granted and the finality attached to such appellate r,rrlt r.

¶343

Revil;ion b_r' Comnrissioner and other prescribed authorities is dealt "r'itl'r in Sectron 32. As per Sub-Section (1), the Commissi<lner ma' .suo rrrotrr call for and examine the record of any order passed or procceding recorded by any authority, officer or person suborclinirtc to hirn under the^provisions of the VAT^Act and if sur:ir or<lt'r. or' Proceecling recorded is prejudicial to the interest^(ri r-cvrrrrLrr'. l;rirr rniti<c sucil cnquirv or cause such enquiry to bc nrrr<lt' rrnci sr-rb-jcc't ro the^provisions of the^{VAT Act,}

¶344

()

¶345

may initiate proceediltgs to rcr-ise , modif_v or set aside such order or proceeding and ma-r pass such order in reference thereto as he thinks lit.

¶346

10.1 As per Sr-rb Scction (2), such power may also be exercised by the Adclitional Commissioner, Joint Commissioner, Deputy Commissioner' :rnd Assist:rnt Commissioner in the case of orders passed or proceedings rccor<led by the authorities, officers or persons subordinarte Lo llttrn. Ho'"r'ever, S per the proviso, such porr,'er sharll not be ercr-c'iscrl lt,r' the revisional authority in respect of an issue or qucstion ii ltit,-h lr,as decided on appeal by the Appellate Tribuna,rl under St'c riorr 33

¶347

1O.2. Sub-Section (3) sar s rlrat in relation to an order of assessment passcd uncler thc VA'l' Act, the powers conferred by Sub-Sections (1) ancl (2) shrrll bc exercisable only ryi!]rin a period of four years from the date on u itit.lr the order was seryed on the dealer. Hou,ever, as per Slrl: Sccrion (.1), no such order enhancing any assessment sh:rll be pzrsscri l i{ hout giving an opportunity to the dealer to shos'carrse agirirrst tlrr: proposed enhancement.

¶348

10.3 Unclcr Sul; Scctiorr iit llre rcvisional authoritv mav defer arrv sut:h procecciir-rgs il an rrppeul or other proceeding 1S pending beforc thr: Appcllatr.^{'l'r'ilrLrnrrl} r>r the High Court or the

¶349

¶350

Supreme^rlourt involving a question of law having a direct^bearing on the orcler or proceeding in question.

¶351

10.4. As pcr Sub-Section (6), where an order^{passed under} Section 311 is se:t asidc by any Court or other^{competent authority} under Lhc VAT Act for any reason, the^period betrveen^{the date of} such orcler irrrrl thc date on which it has been so set^asicle.shall bc exclrrci:c.l rrr conrputing the period of four^{years spt:cified} tn Sub St'ctror-l (.i1 lirr the purpose of making a fresh revisiott,^{if anr}

¶352

10.5. Urrrlcr Sub-Section (71, where any revisiot-t:rl proceeclinlls r rrr r,lei' Section 32 has been deferred, on accollnt^of an-' st.r- orclt'r^qrrurted b1, the Appeltate Tribunal or^{b5' the High} Court or b-r' tlrt Supreme Court in any case, or b1-reasorr^{of the} fact that an appe:a1 or other proceeding is pending bcfore^thc Appellate Tril;r,'nal or the High Court or the Supreme^Court involvir-rg ir qlrcstion of law having a direct bearing on the^orcleror proceedir-r1i irr rlur'stion, the period during which the sta-r' ordcr u'as in force or strch appeal or proceeding was pending shall be excludecl in r-onrprrting the period of four years specificci^{ir-r Stllr} Section (31 ftrr rhe purpose of exercising the revisional^poucr lrndcr Sec' iorr^.l l.

¶353

¶354

I 1 . Section 57 u'hich finds place in Chapter Vlll dealing n.ith oflences and penalties provides for penalty for unauthorized I excess coilection of ta-x. Sub-Section (i) prohibits an,v clealer from collecting an,v sum b,v way of tax in respect of sale or purchase of :tnv goocls s hich are r-rot liable to tax under the VAT Act

¶355

il.1 Srrb-Sections (2), (31 and (4) say that if an-r' per.sor.r collects tax in contravention of the above provision, the sum so c'ollccte-d shall be lorfeited either whollv or partl-r' to t hr: (lovernnrr:nt- lr-r addition, such a person shail be lial)le to l):i-' yrt'nall-r of an arnount equal to the amount of tax so collected

¶356

1 1.2. Sr-rb-Section (5) says that no order of forfeitr-rrc sherll be mlrrie alrer erpiraLion of three years from the date of collectiorr of I h(' ,rmollnt relerred to in Sub-Section (4). As per the proviso. in ('()nrpLlting thc s:rid period of three yeaIs, the period durir-rg u hiclr i:rll\ stit\ order rvas in force or ary appeal or other proceedinq in 1'('spcct llrereof u,as pending, shall be excluded.

¶357

I 2. Thc Coods ancl Services Tax (GST) regime came rc.r be

¶358

intr'oclrr< ecl in the coLlntry by way of the Constitution (101.r .'\nrcncinrcnt) Act. 2016. In this context lve mz1' ad,('rt to the r'('lr''.tn1 pror, rsions of the Constitution (10 I "1 Arnendntellt) Act. f O l(;. As per St'c:tion 2 of tlte aforesaid Cor-rstitution Arnendmc.nt

¶359

¶360

Act, after Article 246 of the Constitution of Inclia a nerv Article

¶361

246-A canre to l:e inserted. Article 246-A reads as^r.tndct'

¶362

"246A. Special Prouision u.tith respect to^goods attd serruices

¶363

ta):- - (1) Notu.tithstanding anything containcd ir arlitlcs )1(t ttnd 254, Parliament, and, subject to clause (2), the Legislature oJ cuery Stc,lc haue pouer to make lanus uith respect to^gootis 'tnd^{strr uicr:-s} tax ir.tposed bg the Union or bg such State.

¶364

(2) Parliament has exclusiue potr.)er to tnake lctttts utitlt respec to goods and seruices tax uthere tlle supplu ol .tloo</s. rtr rti seruices, or both takes place in the course of iTter-St'le tntrlc or comme rce.

¶365

Explanation.--The prouisions of this articlc, ut^r esstt c'l rtf ctoods and scrvices tax referred to in clause (5) cl tfu'^rLrli<-kt -l7t)A. take e..,-fect from the date recommentled bu thL'^{(ioods,'nti.{1'1;'16'-5} Tac Council.'

¶366

12.I. As per Section 7, Article 268-4 of thc Coustitr-ttion has

¶367

been omitr.ed.

¶368

1)') After Article 269, Articlc 269-A hars i'lt:t'r'r ttrscrted.

¶369

Article 26!)-A is as under:

¶370

"269A. Leuy and collectiort of goods cttr.l .sc'rt ir^('s t.r-'^u? course of inter-state trade or commerce -

¶371

(1) Goods and Seruices tax on supplies irr l/r(' cL,r{?\r' {,/ inter-;tqte trade or commerce shall be leuied urtd colltt'le<l ltrl ltte Gouernment of lndia and such tat shnll be apportiortt'u lrcltt:,',-:rt the Ii,ion and the Srafes in tlte ttrctnner o.s nr({t/ Ltt' ltr.r:itiL <l i"r Parliament bA lqtu on the recommend ution s oJ'the^{(j,ro./.s (,fr.l} Seruices Tox Council.

¶372

Explanation--For the purposes of thi.s clau-sc, ;tt!\ltt t,l qoods, or of seruices, or botlt irt tha course of intgtrl ir:lr.r lltt' teritor,l of hdia shall be deemed t<t be supl y of tlrx ds. or 'l senace.;, or both in the course of inter-State trede or contrnerr,'.

¶373

(2) 7'1rc amount appotlioned to c Sl(ilc uncl<:r i lLrti: , shall nrtt forn part of the Consolidate<l Funcl o.f lru)kt.

¶374

(3) Where an amoutlt collectetl as to-t leuied utttii'r t it.r'rst' l1) lrus lteen used for payment of th<' ltct leuiad by^{(l .ql(tlt'r/rr l,} '

¶375

¶376

article 246A, such amount shall not form pefi of the^{('ottsolidated} Fund of India.

¶377

(4) Where an amount colleckd cts la.': let,ierl bq u State under orticle 246A hcts been used Jor paqtncnt c;f tht- ta-r k:oied under clause (1 ), such amount sltcrll rtr l{r:,it !)et1 ol the Consolidated Fund of the StcLte.

¶378

(5) Parliament may, bA lou, Jbmtultttt: lhet pirtciples for determining the place of suppl1.1, and uhen a sttltp[t1 oJ qoods, or of seruices, or both takes place in the cours<: ol inler Stete treda or commerce."

¶379

I Z.J.

¶380

As per Section 10, altcr Clrrrrse (l) oi Article 270,

¶381

Clauses (lA) and (18) have been insertcrl Cllzrrrses (1A) ar-rd (l B)

¶382

ilre as under:

¶383

"(14) The tax collected by thc [irtiort undtr <kruse (l) ctf article 246A shall also be distiltuted ltt'trt't,trL lltt, Iirriott crnrl the States in the manner prouided irt clarrs,' 1-'7

¶384

(18) 'IfLe tax leuied and colli;t:trrl )tq tttt, I trion uruler clause (2) of article 246A and erti(1.' -)t)t)... u.lti( lt hu:; [)t'ctr used for payment of the tax leuiecl ltq tlt.: Lirti'rt lntd( r clau:;( (l) of article 246A, and the amount apponton.'(l to tlL(, I^inK:)n utlder clause (1) of article 269A, shall al.so 1x, r/istri/rr ttt'Ll lx,ttt't,tlt tlte Ilnion ond the States in the mantrcr ltroutlt rl ir c/rrrrsr, 12l.^"

¶385

12.4. Section 12 says that after Article 279 zr ncl Article

¶386

279-A shall be inserted. Article 279-4 rea<ls as rrrrder:

¶387

"279A. Goods and Seruices Ta-x Cottrtt:il

¶388

(1) The President shall, tu[thin.sr-ttr7 cftrr7.s itotL tllt tlute ctf cornmencement of the Constitutktn (()rrt' I !ruttlrt't,L rutrl Frrst Amendment) Act, 2O16, bg orcler, corr.\lrlr1I., ,r^('rriurr'r/ io lrc cttlle,d the Goods and Seruices Tax Council.

¶389

(2) The Goods and Seruices 7'a-r (irurrlil sliull r'irrrsi.sl ol thc Jbllowing^{members, namelg:}

¶390

(a) the Union Finance Ministt:r .......( lrrrrr7.,. rs,,rr

¶391

(b) the Union Minister of Sttttc in < irtrt1. o.f'Reuenue or Finance-..-.. ll, rn|t r

¶392

¶393

'l tut<rtion or ang other Minislar n{ )DrIl1r'r,r l

¶394

l.l

¶395

bg each Stclte Gouernment --...Members.

¶396

(3) Tlte Members of tlte Goods artcl Seruices Tox Cctuncil refened to in sub-clause ( c ) of tllc clousd (2) shatl, (rs soon os ntag be, chnos( one anTonllst thernselues to be the Vice-Chairperson of the Council for sucll period as thery ntay decide.

¶397

(4) lhe GoorJs ttttd -S-eruiccs Toi Council shall make recomt4end.aliotls to the [./nion ancl the State on -

¶398

(a) tL e taxes, cesses arrrJ surclutrges teuted bg the Union, the States and the local bodies tuhich maA be subsumed in the goods and seruices tax;

¶399

(b) thz goods and seruiccs tllet ntag l:e subjected to, or exempted from^{tl e g<tods artd.sr:ruir"r's lo,r:}

¶400

( c ) ntodel Goods cut<1 Senrices Tat Lau.ss, pintiples of leug, apport,onment ol'^()ctocls rrrrrl Scn,icc.s Tcu leuied on supplies in the course of intcr'stote tru(lt )r con)iterce under article 269-A and tle principles thctt 91ow:nt tlte y;ku:e oJ sttpply;

¶401

(d) tle threshold linit oJ' tuntouer belout uhich goods arld seruices rnag be cxernple(l liom goods and seruices tax;

¶402

(e) the rotes tt"cludig lloor rcltes utilh bands of goods and set-uices tr;'t;

¶403

(fl ar,g specictl r(tt(, t)t t-utcs lir o speaifed period. to roise a.dditional re-sorrr-cc-s tltutrttl urtl trrtturol calamitg or disa-ster;

¶404

@)^{sl'ecialpruntisictnri,ilh re'sPc'r'llo the Stetes of Arunachol} Pradesh, zlssnm. ,,Irrnrnr,.t ond Kashmir. Manipur, Meghalaga, Mizorain, Naqakurcl. .Srkkrrn. Thpurc, Himttchal Pradesh and Uttaral-huttd: attLl

¶405

(h) ang olher rn(rtl.r rr'l(rtrng to llrc goods and seruices tax, o.s *Le Councit maA decide.

¶406

(5) Tt e: Goorls and .sirr/,rce-s^'frtx {'ouncil shall recomtnend the date ol whiclt the goods ond .senrices tax be leuied on petroleum crude, 1iqh.s'/rcr-rl rJrrr-c,'/. rttotor slitit (cornntonlq knoLun as petrol), naturol <1tts ctlcl ttitittitctrt trlitir.-r lirel.

¶407

(6) Wile rli-schrrr,iilrT rlr('/ilrtcl-r,,rs cortrt:rred by this article, the Goods trtcl Se'rlir'.,s^'l cts' t'.rnutul sltttll lt<: glLided bA the need for a harmor ized r--lnr('lr{re ttl aoods rrrrd .senrices tox and for the deueloy'ntcrtt o/ rr lrrrr-rrr,rrr..;t'Ll tttttrortal ntarket for qoods and sentice,,;-

¶408

(7) Or t luL|l ol ll.' roinl 'tLunlter of ilfetrtbers oJ'tlte Goods and Seruice s Tif.t: i otUt il:irrrl/ r'on-slitrrle the quorunt at ils meetirlgs.

¶409

(8)^'|'he Gootls oncl Sr:ruice.s^'liu ( rntrtt:il shull determine the procedure in lh<, perlbnrtuncc o/ il.\ luttt.ttrtrrs.

¶410

(9) Iiue-ry r]ecisiort oJ'llt" (;oods rurrl .Slrr,,rr:e.s 'l'ru Council shctll be taken et a rntt,littl, Ltrl tt rttctjortltl of rrr.rl /r,s-s tht.tt't th.ree fourtls of the ueiqhted I rll€r)^ .)/- ahL, r)t(./,,b€,r:-- /rrc-senI and uoting, in accordctnce utith tl,te .lollouinq l)t inL'ipkts. ne Lelll:

¶411

(a) tht: ucttr: trl' th(⁽ ,rtlrcil ()orlernment shall be a Lueight1Lge of orte third^(tl tlk) f()lQl ry)tr.s (yr.sl, (.ind

¶412

(b) the rnte:s ol ctll tl.u: St?tc⁽ ;(ruantments taken together shall houe a u.,L'irlhtctgt, o/ tlL) ilttKls ol tlrc total uoles cast, tn that meeting.

¶413

(10) No act or proct t:rlitrls oi'IlLr Orr s rlrrl Sr:ruices Tax Counctl sholl lrc int ali,l^,,t, r,¹ , I t1 ', ,,' " ,'.

¶414

(a) arry uctcrtnctl irt. t)r (uttl tlt'li,t't irt. the constitution of the Council; or

¶415

(b) any defett in the ep!)ointtnertt of rt rr).,r-son a.s a Member of the Council; or

¶416

¶417

(11)^'lhe Cjorrr./-s rurrl St,r-r rrr,:. l,tt ( rturcil sllall establtsh a mechQ ni s m. k t u c I^jt t r I it' t Ll,' r ui-r7 r/i-s1'r r t,.

¶418

(a) betweerr tlt<^{()or;t:r'r'trrtt} nt ttJ lr\lttt tuitl ()ne or nlore States; or

¶419

(b) betueen the^{(loL,entrrrcnt} ol lldi.e rtnd nnu State or States on one side and onc or tnora olharr.'l(,ld-s on lhe other sicle; or

¶420

( c ) bctLl)een /ti,() r)/ rt/)ri, .Saa{l,^.i.

¶421

oisitlq out t,l' tltt' r^'r,(. r' ) I / I I /^I ( |rl(it.,',-j of lhc: CounctL or imPletnt ttltlt!"tI :1 '^,, ,!

¶422

12.5. Se ction 1 -1 srrr s rhrrl rrl-1r,r' (tlause (12) of Articie 366 a

¶423

new clause being Clar.rst. (12,A) shall lrc inserted. Likewise after

¶424

Clause 26, Clause's (26-A) and (2tr Bl slrall be inserted.

¶425

¶426

12.6. A crucial amendment made was in the VII Schedule^to

¶427

the Const tution. As per Section 17 (a) in List I^(Union List)^for

¶428

Entr1, 84, li-re foilor.vir.rg entry shall be substituted:

¶429

"84. Luties^.rf t:.rcise otl the following goods monufachtred^or ltroduccrl^{t lndu,rtamcly:-.} (a) Pelrolcurn crude; (b) High spet'cl diesel; (c) Motor spiit (commonly knoun a.s petrol); (d) Noturel t/1/-s: (e) Aliation turbine Juel; and (f) 'fobacco utrd tobacco products."; 12.7 Errtrils^ti2 and 92 C have been omitted. 12 8 l,ilic ,r isr'. zrs pcr Section 17 (b), in List II (State t,ist) Flntrr' 52 irir:s irccn on'ritted and for the existing Entrv 54^thc follou,ir-rg c rrtrr liirs bccn substituted:

¶430

.:i I 7,, ' r'., ;nt the sole of petroleum crude, high speed dic::' , nt,r,tr^-tlitlt (coutnTonlA knoun as petrol), natural^gos, et)tttit')]) ;.t1,;tt.' -lual and, alcoholic liquor for lturrcttt con: rtrttltt it,,t^]utt nol utcluding sale in tle course of inter-State trad . or.i)'nnr( rcc rtr sole in the course of intemational trad<: or Coit t|(rt:c^..,1 :;:tt it r1oodS."

¶431

l 2.c) Sccl orr 1.1 salis that notwithstanding an,'thi11g corrtainecl in tht⁽ ,-rrstitution (i01st Amendment) Act, 20 16.^:rrtr provision rf an'. liru relating to tax on goods and services or on both in tor-i'r' ir. .rn\ Stiltc immediately before commencem('nt^t.l1' tl'rc afores;ricl A('t \'hrch is inconsistent with the provisions ot^thc Constitr-rtirrn i'r,:'s1 :;Lrr'lr rrmendment shall continue to be itl^forcc until anrc' rcled ,,r r tpr.rlcd by il competent legislatttrc^{or ()tllcr}

¶432

¶433

competent authoritv or until expiration of one year from such com mcnccment \,hichc\rer is earlier.

¶434

Thr-rs,^,"r'hat the Constitution (101"t Amendment) Act, 2016 has done. amongst othcrs, is that it has introduced a neu :irticle called Article 246-A and has substituted the existing trntrv 54 in List II ol the Vll schedule to the Constitution. Clause (1) of Article 2-+6 A st.rrts u ith a non-obstante clause. It savs that notu itlrstrrrrtling iLn-r,thir-rg contained in Articles 246 :rnrl 25-1, Parliamcrrt and subject to Clause (2), Legislature of even' Statc hitve iro$ t'r to ntirkc la$,s u.ith respect to goods and se r\rlccs tax (CiST) irrrpost,.cl lrr the Union or by such State. This is clarified in Clirtrse (-2) ir-r saling that Parliament has the exclusive po\'cr to mal<e larr s ri ith respect to GST where the supply of goods or of scr-r'ices or bor h takes place in the course of inter-state tr.l(lc or cornmcr(c. F-ntn 5-l of List II i.e, the State List post amendment Il⁽ )\ prc;r,icles t hat State Legislature may make larvs on tz]-\es on thc s:rI.' of pctroleum crude, high speed diesel, rnotor spirit (r'r.urur-ronh knorr n as petrol), natural gas, aviatiolt turbine fuel :rn<l :,rlcolrolic 1i<1rror for human consumption but not ir-rcltrdir-rg sirlt' irr tht' <:oursc of inter'-State trade or commerce <lr salc irr tl-rc cor.lr-se of internationai trade or commerce of sucl-r goocls

¶435

¶436

As rer Central Government Notification I\Jo.SO.2986^(e) dated 16.06.2O19, the Central Government in txercise of the porers crnferred by Sub-Section (21 of Section (1) of the Constituti:n (101st Amendment) Act, 20 16, appoinlcd thc' 16'h day of September,2016 as the date on $,hich pro,isions of Sr:ctions¹ to 1 i and 13 to 2O of the said Amendment Act u'ou1d comc into lbrce

¶437

Follcrning the Constitution (1O1.-t Amendment) A('1. 2016, Parliamcn: enacted the Central Goods and Scn'iccs'las Act, 20i7 (briefly, 'ttLe CGST Act', hereinafter) to make provisicn for levv and collection rl tax on intra-State supply of goods or scrvicr':- or- both bv the Cc^-rtral Government and for mattcrs conttL ctc(l thcrcn'ith and incidr ntal thereto. As per Section I (3). thc^(-l(iS'f .\ct sl-rall cornc'into force on such date as the Central Govcrnmcrtt mar bt' nolificatiorl in the official gazette appoilrt. Set't-r-al^(lalcs \'ere notified b1 the Central Government as thc datc for conting into force of r,;r:ious sections of the CGST Act, such as, liecttotrs 1 to 5, 10, 22 to 30, 139, 146 and 164 came into lbrcc c,n l-2 06.)0 l7: solnc sections czrne into force on 01.07.2017 "r'hct:as St ctirrrl 52 ctrrnc inLo forcc on 0i.10.2O18. Likeu,ise. Irarii:rmcna t'n.rc'Lrci iitt: Intr-gratecl Goocls and Services Tax Act, 2017 (l(iST Act) for lcvr'

¶438

¶439

and collection of tax on inter-State suppl,r' ol goocls or sen,ices or both bv the Central Government and for m.rttcrs connected thcrcu,ith or incidenta-l thereto. Like the CCIST Act. Central Ciovernment notified various dates as thc clate lor coming into force of relevant provisions of the IGST Act, sr:ch trs, 22.06.2017 ttnd Ol.O7 .2017. Further, t'"vo more Acts ri erc' t'rracted bt. the Parliament post the Constitution (lOlst Arncnclrnr.'nt) .Act,⁾⁰¹⁶

¶440

Legislature of the State of Telangan:r t,nirr'1cri tlre Telangana Cloods and Services Tax Act, 20 17 (T(iS'l Act lrtrr'rrr:rl-tcr) to make provision for ievy and coliection of ta-r on irlr:r Stirle su1;1t1-r' ol soods or services or both by the Startc of^{'l-r'ltrnrlirnrr.} T(lST Act r-cct:ived the assent of the Governor olt 25.(.).,.10 1 i irrrci s as first pr-rblished in the Telangana Gazette on rl:.05.1017. Various pro|isions of the TGST Act came into f{)r('(' on r lrrious rlates While Sections l and 2 (definition clausc) r':,u.nc' into force on 2).06.2017, Section 174 which provides lirr rcpc,:r) :rnd silving ( .rnrc into force on 01.O7.2017.

¶441

lf As noticed above, Section 17.1 proviclcs flr-:r'ptrrl :rncl s:rving .'\ s pcr Sub-Section (1), save as othcr\'is(' 1;r olirlL:rl in thc TGST {ct. on and from the date of commenccrnclr r,1 rirc^'f(lS-l' Ac't. the /A"l'Act arnongst other Acts except irt respct i of qorirls ir-rclrr<led in

¶442

2t)

¶443

Entry 54^,rf the State List of thc Vll Schedule to the Constitution were repealed. Sub-Section (2) clarifies that such repeal would not revive an_vthing not in force or existing at the time of such repeal or eLffect the prcvior,rs opcration of the repealed Act etc.

¶444

Govr,rnment of TelangaLna in the Revenur:^(Commercial Taxes-II) Department issucd G.O.Ms.No.1O7 dated 24.06.20L7 directing rublication of a notification in tl-re gazette appointing 22.06.2017 as the date' on rr hrt'i'r provisions of Sections i to 5, 10, 22 to 3A, 139, 146 and I b.l ol thc TGST Act r,'ould come into force. Li<eu'ise, G.O.Ms.No l'r3 datcd 30.06.20 17 was issued whereby it. '*,as notifiecl tirat O1.07.2017 r.vould be the appointed date for coming into l-or-cc ', rrrir-rLrs provisions of the TGST Act including iiection I 7,{

¶445

Telangana Ordinancc No., of^'rO 1 7 s'as promulgated by the Governor on 17.06.'2O 17 to fr.rrther arnend thc VAT Act. Preamble to the Ordir-rance sals that^{(iotcrrrrncnt} of Ir-rdia hzrd enacted the CGST Act and Government of Telangana had enacted the TGST Act. Both the Acts hacl rrot l)ccr l:r or-rsht irlLo force. Though the VAT Act 'ur as repe;rlcd br tire T(;ST Act, the same was vet to be brought into lbrcc. [t u as mcntiorcd that sttch rcpeal rvould not affect anf irlve stieart it)n - irrr;r-rin.. r cr-ification incltrding scrutiny

¶446

¶447

and audit assessment proceedings ctc, ri'hich may be instituted, continued or enforce d, u hcreafte'r ta,r. strrcharge, penalty, fine, interest, forfeiturc or punishn-rent llirv be lcvied or imposed as if those Acts had not been so amcnclecl or repealed. That apart, such repeal would not aflcct :rn-r' Jrroceed ings, such as, appeal, revision, revien or rcferencc ri ]rich sl'rall bc continued under the amended Acts or repealed Acts. lt^r,r';rs also mentioned that it was considered necessarv to str'('ngthclr^('(:1-r iun provisions of the VAT Act to overcome .ln- linrit:rtion s to ht'lp elfective revenue realizatron besides prevenl ing It';rli;rs,rs. Accordingly, it was decided to amend the relcr':rnt plor isions of the VAT Act by undertaking legislation. Since it ri rs clccrrled to give effect to the above decision immccli:rtelv ancl slt)( t' tlrc' l.e gislature was not in session, and as tht'^(]or,ernor of^{'l'clrrrLqilna} r'r:as satisfied that circumstances exist u,hich renclererl i1 neeessary for hi.m to take immediate action; thcrcfbrt'. in crt'r i'isc ol lhe polvers conferred by Clause (1) oI Articlc 213 of tlrc^{(,'onstitution} of India, the Governor promulgat<'cl Tclangeur:r⁽ )r'rlin:rrrr:c No.2 of 2Ol7 called the Telangana Valr-re Adderl Ta,r (Arnc rrrl rnc r-r L) Ordinance, 2017, which came into I'or-<:e s'itl-r irnmccli.rtt: t'lii'c't i.e,17.06.2017. By the said amendment, certarin pror,.isiorrs o1' t lre VAT Act, such as, in Section 20 (.+). Scc'tion 2l (3), (4). ((r). r:| rrnd^(B), Section 32 (31,

¶448

¶449

(6) ancl (7 and in Section 57, the u'ords four years'or'four ycars or six years' or 'thrct' -.,,ears' stood substituted by the u,ords 'six years'.

¶450

Tela.rgiinar Legislzrture enacted the Telangana Va,lue Added Ta-x (Secorrcl Anrendmcnt) Act, 2017 . It received the assent of the Governor rn .29.1 1 .2O17. and was first published in the Telargana Gazctte orr 02.',2.)O17. Thc Telalgana Value Added Tax (Second Amendme rt) ,{('t. 2O I l' iras been enacted to further amend the VAT Act. {s pr:r' S{r('tion 1 (2), the Telarrgana Value Added Tax (Second Anrcndmcnl) Act. 2017 (briefly, 'the Second Amendment Act'. hcrei raft.er 1 h:rs t'orne into force with effect from 17.06.2OL7 Basic tlrnrs( oi- rrtl Scconcl Amendment Act is to extend the limitalron :r[ loLir \ rlr-s to six -vears. Accordingly, in Section 20 ('1) arr cl in Sec tion 2 I (3). (-+). (6), (7) and (8), the words 'four years' or 'foLrr .'ears or six lr.:rr-s' havc been substituted by the words 'six vears'; so rlso in Srrlr Sections (3), (6) and (7) of Section 32. The Secor-rd Anrendnrent Ar:t also provides for insertion of Sub-Section (1A) altcr liub Scctrorr (11 in Section 21; besides omitting the firsr proviso in Strb Secl ion (1) ol- Scction 31. In Section 57 (5) ar(l the pr'oviso tirr:r'c'to. Lirr' ',r,rr-cis 'titree years'has been substitute:ci b-r

¶451

thc s'ords 'six vcars'. The Second Amendment Act reads as

¶452

follou's

¶453

I (1)^'l'his Act may be called the Telangana Value ,,\clclt'cl'f:rx (Second Amendment) Act, 20 17.

¶454

(.2) It shall bc deemed to have come into lorce with c.lTcct from 17 .06.2OI7 .

¶455

l In tl-rc^'l'elangana Value Added Ta-x Act, 2005 tht'rcinafter^referred to as the Principal Act), in Ser:tion 20. in Sr-rb-Section (4), for the '*,orcls^'four vrars the rvords 'six ycars'shall be substituted.

¶456

li In the prir-rcipal Act in Section 21,-

¶457

ril irftcr sub section (1), the following sub-section shall be inserterl, namely,-

¶458

''{ I A) (a) Dvery VAT dealer shall within such tinrc irs ma_r. bc prescribed, furnish certihcates of '-{nnrral Cor-rsolidated Statement of Turnor.ers'. along uith other statcments as may be prescribccl, cLrrlv ct'rtified by a Charted Accountant urithin thc rncanirrg of thc Charted Accountants Act, I949 or Salcs^'l'ax Practitioner, enrolled with the L'onrmcrcial Taxes Department.

¶459

l'rovidcd that the VAT dealer. rvhosc lrlrnover is lcss than Rs.SO lakhs per anrlum! mav ol)t t() submit thc statements as r)ay be prt scribed, trv sclf certilication, or celtificrl lx' thc Sales Tas Practitioner, enrolled^-\iith the Conrnrercial'l':r,res Department.

¶460

1b) i\n.1.^{\rATdealer, who} fails to^furnishtl-rc cljrtificates along with other statements under filarrst (a) on or before the prescribed date in tht' nriurr)cr prescribed shall be liable to pay pcniilty:rs nrar lre prescribcd."

¶461

(ii) In sub-section (3), for the words "four years" occrrrring ert t$,o places, the words "six years" shall trc su bstit u ted.

¶462

iiii) in sub sections (4) and (6), for thc rvords 'for.rr l'cars' the words 'six years' shall bc s rr bsr itu ted.

¶463

¶464

(iv) in sub-sections(7) and (8). for t hc worrls 'four years or six years, as the case miry be. the rvord.s 'six years'shall be subsrituted.

¶465

.+ In the principal Act, in section 31, in sub-sectior.r (r ),-

¶466

(i) the hrst proviso shail be omittr:rl:

¶467

(ii) after omitting thc first protiso. in thc existing proviso, for the words "provirlrd furtlrr:r that" the words "provided that' shall be substituted.

¶468

In the principal Act, in scclion 32, in srrb-sectiorr (3), (60 and (7), for the u,ords^{'[ortr' ,.,t} ars' thc words 'six years'shall be substitute<I.

¶469

o In the principal Act, in Section.57. in srrb-section (5) and the proviso thereunder, ftrr thc uorrls 'three years', the words^isix t,e.rrs sh:rll be substituted.

¶470

Thc Telangana Value Added T:r-r {An'cndrr('n1) C)rdinance, 2O 17 is hereby rcpcalcrl.

¶471

I1. Follor'ving the Second Amendment Act, as c\tractcd ;rbovc.

¶472

r-r'levant prt.rvrsions of the VAT Act would now rcad trs undt'r

¶473

Scctir 'n 20 (.1): Every dealer sha,ll be deemed to har c iri en asscsscil to ta-\ rased on the return filed by him, if no asscssmenr is nlrrlr. u,ithin r period of six yeats from the date of hling of rhe relunr

¶474

Sectit n 21 (3): Where the authority prcscribccl is not satishcil rr rtlr .r retur r filed by the VAT dealer or TOT dealc-r or tir(' r(:turn irl)l)('.tr s 1o be incorrcct or incomplete, he shall assess to llre l;r'st oi-lrr: -jrrclgnrrnt^{\vithin six years ofdue datc of the rcllrrnor s'ithirr six} years c f the date of filing of the return rvhichevclis Lrtc'I .

¶475

Secticn 21 (4): The authority prescribcd mar. b.rl;ecl orr arr inforrn;rtion :r,ailable or on any other basis. t:ortrluc :r <lcr.rrlc:l scrttLirtv of the aocounts of any VAT dealcr or TOT cle :rlcr and rr.lrcr. an' its iessmcrlt as a result of such scrulinl- Lrt'conre:; neccssitn . sLtch ;r;sessment shall be made within a periori of six years li'or:r t ltc' <:nri trf the period for which the assessment is to be nradr-.

¶476

Scclion 2I (fi): The authority prescriltcd lnar. rcilssr,ss. n hcr c lrr ilsst'ssr rcnt rvas already made under sub-sectiotrs (L) to (:i) ir!]11 suclt ri:;scssrnclrl understates the corrcct tix li:rlrilit! o: tlre rl,.'rrL r. rr itlrin .r periotl of six years from the datr of such asscssment.

¶477

¶478

Section 2 1 (7) : Where any assessment has been riclt rrcrl br, l he Commissioner under sub-section (5) of Section 32 or irs the c:lse rnav bc, the Appellate Tribunal under thc proviso to sul) scction {,+) of Scction 33 on account of any stay order grantcd b,r' thc Appellatc 'l'ribunal or as the casc may be, the High Court or thc Supreme Clourt respectively, or whereas appcal or other proctttiings is pcncling before the Appellate Tribunal or the High Corrr'l or Supreme Court involving a question of law having :r rlirer:t lrt rrring on the asscssment in question, the period during u,hich the stirl orclcr u as in force or such appeal or proceedings rvas penrlirrg shall ];c cxcluded in computing the period of six years as thc citsc mal be Iirr thc purpose of making the assessment.

¶479

Section 2 I (8): Where an assessment maclc ir:rs l)('r'r r s( t asidc bt, anv Court or as the case may be the Appel)ate Trii;ttnirl. th,' periocl l)ctu.een the date of such assessment and the dalc or) r',lrich it h:rs i)een set aside shall be excluded in computing tht' pt riocl cif six years as the case may be, for making an1' frt:sir iiss(-sstn( nr.

¶480

Scction 31 (1): Any VAT dealer or TC)T dcalcr or anv otlrcr cjcalcr olrjecting to any order passed or proceeding r.ccorrlt:ci bl un1, ;ruthority under the provisions of the VAT Act. ()tlicr tlrrrn lhc orcler passed or proceeding recorded by anv arrthoritr rrnrlr:r the Provisions^{of the VAT Act, other th:rn ttrc or(lr'r} l).rssc(l^or procceding recorded by an Additional Comrnissionlr^, rr .Ioirrt Commissioner or Deputy Commissioncr, mav u-ithirr .^jo <lir,, s iiorrr thc date on which the order or proceeding nas st:rrctl <rn hinr. :rppeal to such authority in the manner prcscribt'rl

¶481

Provided that an appeal so preferred shall not br' :rrlrniltcd lrv the ;rppellate authority concerned unless the cle:rler prorllrccs proof of I)avment^{of tax, penalty,interest or any oth('r arr()lrnr ,rrlnrittcclto} bc clue, or of such installments as have l:et'n gr:inlcrl. irrrrl lirrr prool' ,,I p,ayq€n!.ol_!l{g!gggd-}4lEfg.lt o[ the _clilIcrencc ()l thc ta, Pcnaltv,^{interest or any other arnount, ussrssccl I^ tlr, rrrrrhoritr'} prescribed and the tax, penalty, intercst or irn\ ()tll('r' irlnoLlnt ir(lmitted by the appellant, for the relevant t:rx periorl. r) n sl)e(:t^()f r,r hich the appeal is preferred.

¶482

Scction 32 (3): In relation to an ordcr o[:rsst ssnrt rr prrsst'tl under thc Act, the powers conferred by sub-set'tions II) .rnrl tJ) shall lx' ( .rcisable only within a period of six years fronr tlrc rl.rtc on rr hich l trc ordcr was served on the dealer.

¶483

Section 32 (6): Where an order passcri urrdrr tlris Sr'< tion has lrcen set-aside by any court or other coml)( tc1l1 .rLllll()r 11\ rrrrcler the .\r-t for any reason, the period between tlrc (lirl(r llf srrtlr ,rcler uncl tlrc dilte on which it has been so sct-ir:ii({c shrrll lrt' r'xt ltr<lcd in (()rllputing the period of six years spr.cil)t'rl in srtir sct'tion (3), tbr tlrc purpose of making a fresh revision, if irrrr-, rnrllcr rl)is S{ ('tion-

¶484

¶485

Section :12 (7): Whcrc anlr procccding under this Section has been deferrr d on account of any stay ordcr grantcd by the Appellate Tribunai or the High Court or Sttpreme Court in any case, or by reason of the fact that .ur appeal or othcr procecdinfi is pending before the Appellate Tribunal or the High Court of t)re Supreme Court invoh,ing a question of lag having a clirect bearing on the order or proceeding in question, thc period during which the stay order rvas in force or such appeal or proccctling rv:rs pencling shall be exc..uded in computing the pcriod of six years specrfied in subsectior (3), for thc purposes o[ cxcrcising the po*'er under this Section.

¶486

Section 57 (5): No ordcr for the fr;rfeiture under this section, shall be ma<le a{ter the expiration of six years fiom the date of collection of the irmount referred lo ir-r sul; scction^(.1).

¶487

According to the petitioners, Statc of Telangana was denuded of legislative cornl)('tencc (() enact the Second Amendmert Act after tl-ie Corrstitr-ltion (101.' Arnendment) Act, 2016 and after enactment of the CGST Act and TGST Act.

¶488

To appreciate thc challe:rgc. it mitv bc useftrl to place the factual context. Randomlr' falcts^()f t\ o cases are taken up for consideration. In W.P.No.705-l ol' 2O21 M/s. Rahul Trading Company is the petitioner. Pt'tit:r'rner is a proprietary concern ca-rrying on the business in paclclr'. For the t:ux penod 01.04.20 10 to 27.O3.'.2O 15, Comrner-cial T;r-r^()lficer had completed audit assessmerrt proceedllllls or-r 31.O3.^)015, r-ipon authorization made by the Deputy Commissioncr. Corn rnercial^'Ia-x undt:r the VAT Act. However, rnuch later. the Dcprrtl Commissioner, Commercial Tax in exercist of pou'ers Linclcr Srr'1i()n .32 (2) of the VAT Act suo nrotu proposed^r-o revise thr: orir{inlrl rruclrt asscssmcl-lt proceedings. In

¶489

¶490

this connection, shori^(';tLrse notice u'its issued on 30.11.2019 stating that on scrutin.r' of assessment records lt rvas found that petitioner had importe cl 7I rnctric tons ol llasmnthi Rice valued at Rs.60,35,000.00 rvhich u ars neithc-r rcportcd br, the petitioner in the returns nor subjected to asscssment. Therefore, the assessment order datcd 31 .03.2015 ri.as lirrrrtd to be^pre.iudicial to the interest of revenue. Accordinglr' :1 'i('\' \'i:ts taken that revision under Section 32 (21 of t ht' VAT Ar:t s as^u itrranted.

¶491

Petitioner filed explanu rtion on I7.11.20lc-). It^-"vas followed by subsequent letters scrl<irrg c:r'rttrilr irrirrlrrrir1iorr on the allegation made.

¶492

It is contended that^rr ithor-rt consi<lt'ring the explanation of the petitioner and without providing itn opl)ortunity of personal hearing,. Depgty Commissioner, Comrt'tt'r'r'ralTax passed.the order dated 14.09.202O conlirming the revision proposed in the show cause notice.

¶493

It is this order s'hich is impugr.rcd rrr \V.P No.7054 of 2021.

¶494

Amongst the varior-rs .qrounds Llr-g('(l l)' ti-re petitioner, it is contended that thr: :rss('sslncnt ol(l( r is^(latecl 31.03.20i5. Therefore, the revisional orclcr ought tri Ir.ivt' ireen passed within

¶495

¶496

four 1'ear':- i.t-., '.ln or br-'fore 30.03.2019, in terms ol Section 32 (2) of the VA'l' Act. Hou'evcr. the revisional order rvas passed on i4.09.2020 ri hich is bc1-oncl four years but within six years. In so far the Scconcl Amendrnc'nt Act is concerned, it is contended that the said amcndment is nor valid in the eye of law as it u,as made a-fter the GST rcgime had come into effect. Therefore, the extendecl ut:rioci of limitatior-r of six years instead of four yeal-s was not ar.ailurlrlc to thc Dcputl Commissioner.

¶497

AS 28. Dcprrt.r' Commissioncr, Commercial Tax, re-designated Joint Con n-rissroner (Statc Ta-x) has filed counter affidavit. After making lr,'cr'rrlrrlLs on rnt:r'it, it is contended that the Deputy Commiss:,rrcr rr,as.jrrst il'irrl nr passing the revisional order r-tnder Section 3 2 (ll oi thc \irYI' Act. Due notice was given to the petitioncr-. In lon'natiorr rt <lrrired by the petitioner were sor-tght lor from thc Fii'groral ,'igil:rnt r' :rnd Enforcement Officer but thc s:rme $:as not r':ct'ive'cl. As srrch those could not be furnished to tl-rc petitioncr. Nonetirelr-ss. petitioner also did not submit any details/<lo.-rrrncltts, bor,l<s Lrl:rccounts etc., in his defence

¶498

It is state,l th:it Sc(rrrorr 32 \'as amended and limitatior-r for revisiorr hrrs l.recn cxlcrrrir.,cl ll'orn four years to six years rvith cffcct from i7.() r.2017 bv tlrt'⁽ )r'(iurance dated 17.06.2O17 r'r,l-riclt ri,as

¶499

¶500

rcplerccd bv tl-re Seconcl Amendment Act r.r,hich is in force Thereforc, contelltion ol the petitioner that the amendment u'.rs carried out ciuring^()ST rcgime lacking legal sanctity has^bccn denied. The in'rpr-rgned notice and revisional order u,ere^passc'd ,"r,ithin tl're limitation periorl of six years. Therefore, those are legal ar-rd valicl.

¶501

ln its re'pl-r' afficlavir petitioner has stated that the^limitation per Section 3 ) of tl're VAT Act is only four years. Original assessment ordcr l-raving been passed on 31.03.20 15, tlrt revisional orcler oltsirt to havc been made on or before^30.03.20IC), whercas thc rmpuenccl order of revision is dated 14.09.2020; tht-ts, being barrcrl b-r' lin'ritatior-r. The Second Amendment Act extencling limitation fron'r tbur lcars to six years is contrary to thc Constitutron {1 01.' Amendment) Act,2016.

¶502

ln \i.l).\o.J',S93 oi 2020, petitioner is a partnership firn-r cngirgt:cl in tire biisincss ol nrilnufacturing dilferent kinds^{ol' plarlt} :rrrrl rntrt lrinrrr-\ r'tc. ['ctilionc'r u'as registered as a dealcr^ltn<lt'r tl.re tlrt'n .\nrllrrir ['r:rr]i'sh Cierreral Sales Tax Act, i957 arllrl tht'n'af1r'r' Lurcler- llrc .Anclhra Prirdcsh Value Added Tax Act.^)[)():r. r\i1t'r' iril',u-t'.rijLrir rrf llrt Strrtt. I)('tlti()ltet' continued as a reqistt'l^t'tl \i.Al' cicalt-'r- r-inclcr t]'ic '.-l' Act. I'-or tlre period from 0l .O-1.^)(l 1() trr

¶503

-r0

¶504

3I . 10.201 I , covering the entire financial year 2101 0-20 i 1 and partlv the financial year 2O11- 12 petitioner filed returns under the VAT Act. Altcr availing the input ta-x credit to rvhich lt rvas entitled, it paid the taxes due at the prescribed rate

¶505

?'2. Commcrcial Tax Officer conducted audit and on completion thereof passed the assessment order dated 24.03.2014.

¶506

Deputr- Commissioner, Commercial Tax issr-i,:d prc revision shorl causc notice dated 09.11.2017 proposing to rc'r'isc the ilssessmcr)t rnzrde by the Commercial Tax Offi<:r'r- ancl to levr' adrlitional tax of Rs. 1,03,26,998.0O on the grou;rcls rnentioncrl tlrcrein

¶507

.l+. Petitioncr filed detailed reply dated 06.03..2o 18 to the prc revrslon s ro\' cause notice. However, the Deputr'^{(lommissioner} ciicl not consider such reply of the petitioner a:rcl passcd thc' revisional orclcr on 05.O3.2020 le'vying aclclitional tax of Rs. 1,O3,2(r,9!t8.00 by imposing tax at a higher rate [rollou.ing the t'cvisiorral orcit'r, the assessing authority passecl tht' consecltrentiai or<ler datcd 07 .O3.2O2O giving effect to the revisioni-l order

¶508

Aqsri('('d. present Writ Petition has bee n lilcri

¶509

¶510

3(:. [t is contended that under Sub-section (3) ol Section 32 of thc VAT Act, limitation prescribed for passing rcr,isional orcicr ri as foLrr vears lrom the date of service of thc original orclcr sought to be rcvised. Referring to the Second Amendment Ac1, it is st:rted that bv the aforesaid amendment, the period four vears appezrrir-rg in Sr-rb section (3) of Section 32 amongst other provisions u as sLrl)stitLlted b-v the period six years. In other rvorcls, thc iimitation pcrio<1 to complete the revision was extended fronr ior-rr veetrs to sir^., ears. Since the original assessment orclt'r u irs passccl :rncl scr-r,cd on 24.O3.2014, as per the four years limitation preriod the l.rsl^(lzrtc for passing order of revision u'as 23.O3.^)01,3 btrt the irn1;trgncd order was passed on O5.03.2O20. Rt'icrling to the tunt rrcle-d provision extending limitation to six vcars. rt is st.rt('cl tliirt tl)c last date as per the amended provisiorr s rrs lll.03.f 010 Il the Second Amendment Act is held to be un-con stitrrt ional. the :rclclilional t\'o years of limitation lvould not be rtr trillil;ltr to tltc tcsporr{icnts and consequently the relision.rl ot-tlt't cllLtt'cl O.;.o.1.1020 uolrld be beyond limitation. It is in tllirt^('i)nte\1 thirt r,irr's of tl-rc Sccond Amendment Act has bcen pttt to t lr;rllctrqc

¶511

Therefore, petitioner seeks a declar:rtirrrr 1llir1 tlle St't'ortd Anrt'nclrrent Act is un-constitutional zrrrd consc'11u('nth to clt'clare

¶512

-12

¶513

the revisional order dated 05.03.2020 as being barred by limitation and thereafter to quash the same as n ell as the consequerrtial order dated 07 .O3.2O2O.

¶514

Likewise, in all the Writ Petitions lolrning parr. of the present batch, the challenge is either to the revisional order passed during the exten<led period of limitation or to the notices to shorv cause issued during the extended period of lirnitation of six yeerrs as to why the orders of assessment shouild rtot be i-evisc-d. Adclitionally, constitutionalitv of the Second Anrc'rrrlment Act has been questione(1.

¶515

Let us now briefll' higtrlight tht' snbmiss:ons made by learned ccunsel for the parties. Lc:rding thc argun-rents on behalf of the pettioners, Ms. S.Rar.i, lcar-nr:d scnior coLlnsel, has at the outset, relerred to rvhat hc termed as tl-rc^'list ol importar-rt dates' He pointe d oltt that on 08^()!).1r0 l(r llr'.' Constitution (1O1., Amendment) Act, 20 16 (rcfcrrecl to hcrcinirftc-r as 'tlle Constitution Amendme:rt Act') received the asscnt of th<' Presrdent and was published in the official gazette . 1(r.O9,2016 $'as the appointed date when various provisior.rs of the Co nstit r-rtior-r Anrcndment Act came intc, forcc. He then rcfcrrerl to 'r7.O5.20 I7 u,hen the Telangana State lx:gislatrlrc cn.r('ted tlrc T(]ST Act s,l-rile repealing

¶516

l-l

¶517

the VAT Act except for thc soods listccl in Entn 5-1 ol List II of the VII Schedule. Ordinancc No.2 of 20 1 7 ri:rs promulgated by the Governor of Telangana uncler Articlc 213 ol tl-rc Constitution of India on 17.06.2017 rvherebv limitation u'ns c'rtended from four years to six years. O1.O7.2O17 is tl-rc datc otr and from which TGST Act became enforceirble. Sccl iott l7-1 ol the TGST Act repealed the VAT Act in respecl o[ :rl1 goods except those mentioned in the substitLrtc(l Entrr' 5-1 of t lrt' State List. On 29.II.2017 the Second Amcnrlmcrtt Act^re cr-irt'<l the assent of the Governor whereafter it n'as pttblisherl ir-r ti'tc Tt'1itt'tgana Cazette on 02.12.2017 giving retrospective effect ll-onr^I 7.Lt(r.2017

¶518

Mr. S.Ravi, learncd scnior courrst'I. su1>rrrits that prior to the Constitution Amendment Act comir-tg inlo firrce, States had legislative competencc to lt'r'r' Valuc Atlrlccl^{-l:ix (VAT)} on sales of all goods except ne\'spapcrs in the collrsc^()l intra State trade pursuant to Article 246 rf tl)e Constit Lltiott rt';tcl rvith Entry 54 of List II of the VII Scl'recitrlt'. Con sl it^t-tti()r i \ir('rt(itnent Act has amended the Constitution of lndia tt-r rcdistrilrute tl-re legislative powers to give eflect to the rtcu^()ST rt'gimt lrlrst'rl on cooperative federalism-pooled sovt'reigntr'. The Seconcl .\rttctrclment Act was adopted on 02. 12.2017 s.ith rctrospective cflt'r't liom 17 .06.2017

¶519

¶520

enlarging the period of limitation more particularly under Sections 21 and 32 of the VAT Act from four vears to six years. He submits that after the Constitution Amendment Act, State oi Telangana did not havc Lhe legislative competence to enact the Second Amendmcnt Act li:r all goocls either on the basis of the erstwhile legislativt: scheme 1>rior to tl-rt: Constitution Amendment Act or on the basis o[ Articit 246 r'aci ri,ith Entry 54 of List II, as amended, or undei Arricic 246 A or in terms of Sectisn 19 of the Constitutrc,n Antt:rtdntenl Act or on the principle of poolecl sovereigntr or on rlle basis t-r f C.lrdinance No.2 of 2Ol7 or in terms of Section l 7J of tlrr: TCIS'l At r

¶521

Elal,or;rtin., on the abovc aspect, Mr. Ravi submits that the Second Anrenclrntnt Act sccks to retrospectively amend the VAT Act to ci larqc tlrc linritation pcriod with retrospective effect to assess tirx ill rcsllc('t o[ tltosc assessment years when it had legislalir',:^{('orlllltlcltce} [(.) irnpose VAT on all goods except newspap( rs. Ho$ cvcr, hc points out that tl.e Second Amendment Act rv:rs p:rssed rirr 02.12.).O17 .rfter the date of enforcement of thc Constitr.rt on Amc'ncimerl A(.t. Referring to a deeision of the Suprenr,^{( ()r} i1', nr A.Hajee Atrciul Shukoor Vs. State of Madrasr

¶522

i AIR 1964 )C 1729

¶523

.15

¶524

he submits that 1}-rorish the State Legislature IS competcnt to enact lau,s having r-ctrospective operation, its competence to make a lau, for a certarin l).rst period depends on its present legislative polver and not on rr h:it it possessed at the period of time r,",hen its enactment is to h:rve operation. On 02.12.2017 State of Telangana did not have thc le'gisl:rtive competence to enact the Second Amendment Act

¶525

Proceedin{ lirrt irer }re submits that there is no savings clause irr the Clonstitulion Amendment Act saving legislative compctelrc(] oI t]rt' Starc based on the erstwhile distribution of legislative po\ crs Ilt' submits that Section 6 of the General Clauses Act. lli()7 clocs not apply to the provisions of the Constitution of Irrrli;r since Constitution of India is not an enactme-nt. In this t'orrr-rcction, learned senior counsel has placed reliancc on :r rlivisrorr l;ench decision of the Gujarat High Court in Reliance Industries Limited Vs. State of Gujarat2. Therclore, the Stat.^('.umot rr'lv rrpon the erst"r,hile legislative scheme reflecterl in Jr-e rurrcndt'rl Flntn' 54 ol List II prior to 16.09.20 16 lor legrslativt'^{('olnl)('t('n(} r on thc grourrd that the Second Amendmcnt Act is retrospccti'(' rrnd rntcnded to deal rvith VAT demamds prior

¶526

2 2O2O 82 GSTR 32 (Guj.)

¶527

¶528

to the corrilrg into force of GST. Thus, Section 6 of the General Clauses Act, I897 cannot be pressed into service to save the^pre amended lntrv 54 of List II

¶529

-13. While on legislative competence, Mr. Ravi sul>rnits that after the Consl, lntion Amendment Act, Entry 54 ol List II is confir-red to onl-r' five petroleum products and alcohol for hum:rn consr.tmption Statcs ha.,c lost legislative competence after 16.09,.20 16 to make Ias's imp,rsing VAT on other goods i.e., goods ger-rerali_r. To supl)ort his above submission, learned senior coutrsel i'r a.s placed rcliancc c, r the follorving decisions:

¶530

Reliance Industties Limited Vs. State of Gujarat (2 supr a).

¶531

Hinrlalco Industries Limited Vs. State ot' Kerala3, and Jair Distillery Private Limited Vs. State of U.Pa.

¶532

++. .rrccr rcling to him, there is no provision in the Cotrstrtution Au'r c'r'rcirnc n t Act which postpones or dilutes tl-rc effcct of .11'ncncinr.r'rt in Entry 54 List II of VII Schedule. On and frorn l().(.t.) .)(rl(r, ti:e State l,egislature is competellt tc, nral<e la\'s pror.rclinil for tax on sale of alcoholic licltr,t' lor hutn:rn colr:t.r-r-rrrl i,rrr erircl a ra-nge Of petroleum prorlr:r:t,r r-r:t1r br-tt ttcrt

¶533

3 2O2O 74 GSTR 1 16 (Ker) r 2o21 (10) ',rMI 583 (A )

¶534

¶535

goods t general. If this distinction is not ildhered to. rhe Constitr-rtion Amendment Act would become otiose. Tlrtrs. tl're Seconcl Amendment Act could not have been enactcd for all goocls lf thc cor-rstitutionality of the Second Amendment Acr is to be savcd, then it has to be read down as applving onh' to thc fivcpetrolt'um products and alcohol for human consumptiorr

¶536

.15. Arlverting to Article 246 A of the Constitution ol Inrlirr, tis instrtt'<1 bv the Constitution Amendment Act. he coltten(ls l ltrtt ur-rrler Article 246A simultaneous power is ervarilaltle to lloth Parliirnrt,'nt and State Legislatures to legislate regarrling rrt('s on sr-tpplr of goods and services. Elaborating on this .rspr-cl. ltc ltns plact'rl r'e liance on the decision of the Supreme Colrrt in Union of India Vs. VKC Footsteps India Pvt. Limiteds. llc also r'l'li'r's to thc r lt t ision ol the Gujarat High Court in Reliance Industries Limited (2 supra). According to him, Artic:le J-1('r..\ r't'iltrir-irrg sirntrltaneous legislation by both Parlitrment :mtl St.rtc [-egisirrt rrres is based on the principle of poolccl sovrn.ignt-r ,/ c<-ropCr':rtiVe fccicralism. Further, he subrnits that all sr-rch legislirl iolrs nrlrst be based on recommerr<ltrl ion s of tlrt'^(iS'l' Cot rncil. Thcrc,lore, he contends that legislirtivc conrpctt'rrc'e of

¶537

s 2O2 1 SCC Online SC 706

¶538

¶539

Telangana State Legislature for enactir-rg the Secortd Amendment Act cannot flow from Article 2464.

¶540

Mr. Ravi also highlighted the transitional^provisions contained in Section 19 of the Constitution Amendment Act ald points oul: that the said provision is in pari mateia to Article 243ZF of the Constitution which was brought in as a transitional provision regarding ttre law relating to municipalities inserted by Part IXA of the Constitution of India. Relving upon^{the decision of} the Supr erne Court in Bondu Ramaswamy Vs.^Baagalore Developmeat AuthoritlF, he submits that Section 19^only suspends constitutional invalidity or postpones sur:h invalidity^for a period of one year to enable the competetlt legislalllres^{to remove} the incon sistency by amending or repealing^suc h^{law to Lrring} them in consonance r.l,ith the post amended provisions.^{Object of} such tra:rsitional provision is to providc for a transition^by suspendirlg invaiidity of inconsistent icgislirtior-r lor^{a period of one} year to errable the competcnt legislatures to amend / repeal their laws to bring them in consonance u'itl-t posi atnc'uded^provision. Therefore, Section 19 of the Constitution Amettdme'nt^{Act does not} eciipse the amendment to Erltn' 54 oi Lisr ii or c'otlier^iegisiative

¶541

6 {2O10) 7 SCC 129

¶542

¶543

competence upon the State for makirrg amendments to the VAT Act qua goods other than alcol'rol for human cor-rsunrption and the five petroleum products.^'l'herefore, ri'hat Section 19 provides is that the State can continue to lcn- t:r.x unrler the \iAT Act lor the window period of one year or till the VAT r\ct is amended or repealed whichever is earlier. This transition:rl provision does not enable the States to make ermenrlrnents to the VAT Act in contravention of the amer-rclccl Llrrtn :,-1 o[ List IL Hc submits that Section 19 of the Constitution Anrcrrrlmcrrl Act cannot be understood as a source of lcgislative po\'cr'. nor as a saving provision in respect of legal coml)('len('(' to ilrnCrl(l tirt' VAT Act. To buttress this point he has 1:rcssccl ir-rto sr-n'icc tlre clivision bench decision of the Gujerrat IJigh Cor.u-t in Reliance Industries Limited (2 supraf. Accordir-rg to irinr, evcrr tlrc single bench of Kerala High Court in Sheen Golden Jewels (India| Pvt. Limited Vs. State Tax OIficerT }-ras t:r}<en sirnrlal'^r, rt '.r tlrotrgh the said decision is relied upon b,r, thc respcrnrlt-ut

¶544

Even assuming but no1 .rdrnil[ing theit S( ction l9 empowers the State Legislatures to mal(c atncnclmt:t-tts to tlrc VAT Act in respect of assessment limitation for :rll gorrrls irr g.'ncnl as if Entry

¶545

? 2019 SCC Online Ker 973

¶546

{(l

¶547

54 had lot Jret beetr a-mended, even then also the Second Amendment Act having been passed on O2.l2.2ol7 was beyond the one .cal period in terms of Section 19 of the Constitution Amendmc nt .Act and tltcreiorc invalid.

¶548

Mr. Ravi fur-tl-rer subrnits tl-rat iegislative competence cannot be derived on a^qeneral princ'iple of sovereignty without any constitutioniii provisior-r providing for such legislative competence He subm ts that \rtrcle 2.i(r read u'ith Entry 54 of List II, Article 246A an<l Sr-'ction 19 of tlrc Cor-rstitution Amendment Act have inbuilt restrictiorrs rcgerrding ti-rc subjects in respect of which the State Legislal ures can legislate

¶549

Turr-rirrg hi:s ;Lttcntion ro^()rclinzrnce No.2 of 2017, he submits that legislative coml)etelrcc rnust be traceable from the Constitution. [t cannr.rt flolr fi-orn a previous piece of legislation. Thus anr rclirirrct' pitrr:ccl ol) th(' Ordinance to support legislative competencc of t he Sccon<l Aincndment Act "vouid be wholly misplace 1. As a r-natter of l:rct. the f)rdinance was promulgamated on 17 .O(' .2O I 7 u'ithin the onc r c.rr uindow period permissible under St'ction 1!) of the Constitution Amendment Act. However, tirat bv rt seli r, ill not confer ('oml).'tcncc on the State Legislature to enact th,t Scr:,rrrrl Amcndmcnt i\e t \'l'rich r.l'as passed after expirv

¶550

¶551

of the one^year ri'indo\' pcriod. On the day ol enacting the Second Amendment Act, tl'rc State l-egislature had lost its competence for making lar.r,in respect of ollter goods barring the goods mentioned in the amended Entr-r' 5-l ol List II. State Legislature must have the competence both on the date of enactment i.e. 02.12.2O17 and also on the day n hen it u'as brought into force retrospectively i.e t7.06.2017

¶552

Referring to Article 2 13 (3) of the Constitution of india he submits that the Ordin:rncc s'ou1d be ultra uires for the verv same reason for rllrir:h lhe Scconcl Amendment Act is ultra uires. He further submits that lil'c oi tlrc Ordinance /as onlv six weeks from date of conr.ening oi tlrc State Legislature. This period, he submits, \'as tiii 08.12.2017. Even assuming that the State Legislature \'as compctcnt to enatct and apply the Ordinan ce qua the goocls not nrelttiolrecl in amended Entry 54, such operation could not have continrred bcvond 08.12.2O17 as per Article 213 of the Con stitr-rtior-r. Cllarilving the position, he submits that the Ordinance \:.1s not r:hallenged because the Ordinance u,as repealecl b.r' ti'rc Scconcl Amendmer-rt Act and is no longer i11 existence. Bcsicles. tht' Scconcl Amendment Act was brought into force rr-itl'r cllect from 17.06.2077 u.hich u.as the date of the

¶553

¶554

Ordinamct. Tirus, even for the period r,r'hen the Ordinalcc u,as in existence ii ri,as the Second Amendment Act^q,hich occtrpit:d thc legislativr, {letcl ald not the Ordinance. Therefore, an. reliance placed on tht Orclir'r.tl." would be misplaced and tne fact that the Ordinanct \irs not challenged would have no legal bear-ing.

¶555

Firrrrllv Mr. Ravi refers to Section 174 of the TGST Act. Section l'/ I of the TGST Act provides for repeal and savir-rgs. It cie:rrlv s:t,'s lhilt on and from the date of comme;lccmcnr of the 'l'CS-l' .Act thr ,'AT Act stood repealed except in rr:spc-cr o1- g<;ods inclucle d in Enlr y 54 of List II of the VII Schedule. To that (,xtcnt, Ser.:trrir r I 7 4 of the TGST Act vindicates the stand of the pctitirrnc'r ; Vlr-. Ravi submits that Section 174 oi tht-^'l'(iS'f Act rlas blolillrt inLo lorce with effect ftom Ol.O7.2Oi7. Thc e ftect of reireal rr t, rl<l l;,: that the VAT Act with respect to all goocls r-rther tl-r:rn llro:,t' inr:ntioned in amended Entry 54 oi Lisr II stoocl oblttcrltt'rl irnci rvas not in existence any more on tutcl frorrr 0l.O7.2oli frrom 01.07.2017 t}:re VAT Act was alive onlv in rcsp('ct oi- t lrr' goocls mentioned in the amended Errln- 5-l of l-ist Il Thc san'rt s'rrurid also apply to the date 02.12.2O17 s.hc'n the Sccon(l .\nl('r)dnlent Act u,as enacted. Therefore, thc Sccond

¶556

¶557

Amcr-rdmcnt Act can only be in respect of the VAT Act as existing on 02 .12 .2O 1 7, er''en if given retrospective eflect from 17 .06 .'2O 17

¶558

Summing up his arguments, Mr. Ravi submits that both the ()rclinance as r.r.ell as the Second Amendment Act arc un con stitutronal being devoid of iegisiative compctcncc. I Ic surbmits that division bench of the Gujarat High Cor-rrt r r-r Reliance Industries Limited {2 supra) and a later sir-rgle bench ciccrision of t hc licr:rla Hreh Court in Hindalco Industries Limited (3 supra) herve struck dou,n VAT legislations enacted post 16.09.201fr. He slrbmits l hat hc n,ould adopt the detailed reasonings sivcn bl t ircr l;cnch irr lhosc t\,o cases.

¶559

As a corollary to the above he submits that as thc Vr\T Act \'a1s repealeci on O 1.07.2017 except for five petroler.rnr prociricts ancl alcohc,l for- human congq4qplien,. no amcnclncnt Lo lilc repe:rlcri lan is permissible. Therefore, the Second Amendrnent Act m:rcle on l)2.12.2O 17 to amend the VAT Act u,lrich alrearlv stoocl rt--pcalcri ancl s'as non-existent as on 02.12.2O17 e.rccpt ior- lir r- petrolet:nr pr-orllrcts and alcohol for human consumpti{)n rlotrlrl bc im permi ssil;le in las'.

¶560

5.+ NIr. 'isr,ian:rth, learned counsel for some of tfie petitioners, u-hile acloptinq the arguments advanced bv N4r.S.R:rli, lerirned

¶561

¶562

senior counsel, submits that the State Legislature passed the Telangana Goods and Services Ta-x Bi1l, 2Ol7 on^{',.6.01.2017.} It received the assent of the Governor on 25-O5.2O 17 u'hereafter the Telangana Goods and Services Tax Act, 2017 (a1rc ach, referred to as 'the TCST Act') u,as published in the Telangana Extraordinar5r Gazette or 27 .O5.2017. He thereafter submits that t1're Ordirrance rvas promtrlgated on 17 .06.2017 rl,hereas thc Sccr-rncl Amendment Act was riade on 02.12.2017 giving retrospective effect from l7 .06.201 7 . He submits that the Second Amt:ncirnent Act is unconstitrrtional as the State Legislature hacl iost ts competence to make s rch amendments after thc Constil ution Arncndment Act came into force from 16.09.2016. On ar-r cl from l^(r.09.20l6 only concurrent jurisdiction could be exe rcrscd simulta:reouslv bv the Centra] G rvernment as u,eii as bt, the Statc Govct'nincnt insofar GST is concerned; that apart, exercise of pou cr un.ler Article 246 A can only be carried out on thc r<--conr mcnd:rtron of the GST Council.

¶563

Adverting to Section 19 of thc Const itlrtior-r Arnendment Act, he submil s that it is a transitional provision :rnd a transitional provision oannot be useci fbr ur-tir-rtcnclcrl or obiiqlre l)Lir-pose,

¶564

-15

¶565

Referring to Article 213 (3), Articlt'2+6 (3) reacl uith Entrv 54 of List II and placing reliance on State of Bombay Vs. R.M.D. Charmarbaugwalaa ancl Krishna Kumar Singh Vs. State of Bihare, he submits that both the Ordinirnce as u ell as lhe Second Amendment Act in their application to^gootls other than the five petroleum products and liquor for humzrn cotrsumption are void for want of power. While highligiiting thc drlTercrtce betu'een amendment to the Constitution iutd antctrdmcl't t to othcr la"l's,^he submits that post the Constitution Amcr-rdrr(.'rtt Act^{coming into} effect lrom 16.09.2016, legislative pou cr s hich flos s from Entry 54 of List II ceased to have eflect frorn 16.01).2016 irr respect of goods other than the petrolettrn procittcts ittrrl litlLtor for humar consumption. Being a constitutiontrl ittrtc'rrrltnt'trt, Stction 6 of the General Clauses Act, 1897 u'outld trol ltt' irpltlic:rlrlt-'. i{e also submlts -th-af flTe--Ord'inance ancl the Second Amcndment Act cannot be traced to Article 2.16A. Fr,rr-tlier, irt^r ic$^{ol Section174} of the TGST Act, amendment of zt repcalecl At'l is nol 1 ossible. He also places reliance on Hindalco Industries Limited (3 supraf ancl Reliance Industries Limited (2 supra)

¶566

3 AtR 1957 SC 699 e (2or7l 3 scc 1

¶567

,16

¶568

Mr. K.P. Arnamath Reddy, learned counsel for some of the petitioner i. submits th.rt extcnsion of limitation for making assessme rts. reassessments ard revision under the VAT Act from four yearr; to sr-x ycars b_y virtue of the Second Amendment Act is not valid as the parent VAT Act !:as repealed following the Constitutr onal Amendment Act. That apart, amendment to the VAT Act frr such extended limitation nas made by issuarrce of an Ordinanc,: under Article 2l3 in June. 2017, which was vdidated by the St.rte l,egisizrt rrre in December, 2017 , only after introductjon of the TGST Act ot'r Ol.O7.2Ol7. Therefore, the Second Anrendmc r.rt Act is not sust:rinable in law after repeal of the VAT Act on 30.06.2017. In addition to the judgments in Reliance Industries Limited (2 supra) and Hindalco Industries Limited (3 supra), he additior.ralll, places reliance on the decision of the Kerala lJigh Court in Baiju A.A. Vs. State Tax Offiicerro. Insofar Sr:ction 1l'-{ of thc TGST Act is concerned, he submits that the said :;ectiorr^{()t11. s.tvcsi opcration of the VAT Act with respect to the bur;ir-tcss triulsactrons mlrcit. prior to Ol.O7 .2017 ,}

¶569

5B Mr. B. S. Prasaci. lcarncd i\dr-ocirte General for the State of Telangan r. suitrnittcd tlttrt thc Starc Legisiature 1s competent to

¶570

ro 2020 (r I Kl-',t' 233

¶571

1'7

¶572

make lar:s for saving thc rcpcalecl Acts under Section 19 of the Constitution Amendment Act. Accordingly, Section 174 was included in the TGST t\ct :rs .1 mcaslrre to save the repealed Acts, including the VAT Act. He submits that Section 174 saves operation of the VAT Act rn rcspect of transactions made prior to Ol.O7.2Ol7. Insofar the VAT Act is concerned, the same uras amended b_y thc Sccor-rd Ar'l're ncimer-rt Act prior to the effective date of repeal b1. rval. of an C)rclinance dated 17.06.2017. Article 13 (3) of the Constitution oI lnciilr statcs that^I a'"r, includes Ordinance as well. Section 6 (b) of thc Lleneral Clauses Act, 1897 also makes it clear that repeal of a1r Act shall not cffect the previous operation of orany enactment so repetrlcd anvthing done thereunder. According to hinr, rt'li:rncc piaced by the petitioners on the decision of the Ker-irla High^(lor-rrt in Hindalco Industries Limited (3 siipiFa, and on thc^()ujerat High Court decision in Reliance Industries Limited (2 supra) rvould be of no assistance to the petitioners as in those cliscs thcrc'\:as no Ordinance or legislative enactment pertainirrg 1o tlr.r St.itc VAT Acts prior to introduction of GST

¶573

59 Elaborating further 'tr. Ll.S.Prasad submits that the Ordinancc s'as pr-r.rrn u iganratcd bv the Governor of Telangana on

¶574

.18

¶575

17.06.2017 \,hereb,' the time limit for assessments and revisions u'as exter decl iiom four years to six years before annulment of VAT Act. T1-re Ordinalce became an Act i.e. the Seconcl Amendmcr-rt Act on 02.12.2017. Prior to that, t.l.e Ordinance was approved bv tl-re legislative assembly of the State of Telangana rvithin six months from the date of the Ordina_nce. Referring to Article 21 3 (:2) of the Constitution of India, he sr"rbmits that an Orclinarrct prornulgated by the Goverrror would have the sarne forcc an cl eflec t as an Act of the legislature unless such an Orclinalrcr, is not placed before the legislative assembly or rejected bl the leqisli.rtir,e :rssembly when placed before it ri'ithir-r the stiplll.lted tirn( lnsofar the present case is r:oncerned, the L)rdinanci ri.rs piaced before the legislative assemblv atr.irl the asscmbl.r -rpprove<l the same. Therefore, in the light of rhe above constit utir nal provision, the limitation to make an asscssmerlt or reassess )ent ol rcvision is six years and not four lrears. According to him, tlrc C)r-ciinance issued and the subsequent legislative Act for prolorr,qinq^,.he limitation made such extension of limitirt.ior-r va1id. Tir''r-clor.-. the proceedings initiated under the VAT Act in rcspiict rrf Llrt, 1;ctitioners are valid, being within limitation. Insofar clccision ' l t;re licrala High Court in Baiju AA (1O supra| ]S corrccrnecl. thc: samc q'ould not be applicable to thc facts of the

¶576

¶577

present c.rse inasmuch as amendment to the I(erala VAT Act u'as made long after annulment of the Kerala VAT Act. [nsofar thc prcscnt case is concerned, the Ordinance was promr-rlgated prior to 0l .07.2O I 7 s'hen the VAT Act was still in force

¶578

60 Mr. Prasad, learned Advocate General, asserts^that Telang:rna Stalc u'as competent to promulgate the Ordinancc orI 17.0(r.f017lrnd thr:reafter to^pass the Second^{AmcntlnrentAct olt} 02.11.1017 irr respect of goods not covered by amendccl Entn^5-] of l-ist l[. [)ou er and competence of the State in tl-ris^{reg:rrcl is} lrzrc('.rl)lc to Article^'246 of the Constitution read r.r'ith Scction^{19 of} thc Constitr,rtion Arncndment Act; the savings^provision in St'ctiorr 17-l of thc TCST Act; Article 246A of the Constitr-ttion. irnd Sections B anri BA ol the Telangana General Clauses Act,^1BC) I

¶579

61 lvIr. I'rasad s ubrnit-s th,at.-SlaJe- -is onil' scculrng^urcl protecrtirlg (lrc revcnue due to it by enlarging the dltratiott br s,hiclr thc dt:rlrrs can be assessed etc., but not imposirrg iirr\ rle\ tax or len-. I-cgrsl:rtion being a sovereign function o[ tht' Slate, thus, the Sr'(',rr(.1 ;\rnendment Act cannot be^questiorrccl as^lrr'itrg \rithoLlt conr r)('1^(rrce

¶580

62 Statc hirs the p<x|er to enforce the Second Anrt'tttltnettl .'\ct u'ith retrosyrcr't^j', e cl'li'ct. State has the pos,er to t'r't'tt t.Lltt ,t\ir\

¶581

5{}

¶582

vested rigllts of the assessees i.e. even u'here asses:imcnts become barred bv time under the pre-amended provision. State can e nlarge the limitation even for such time barred assessments and Lake anva.z vested rights. Looked at from this perspective, the Second Amendment Act cannot be said to be arbitrau-r.,. not to speak of t,eing manifestly arbitran,

¶583

63 Prorisions for enlarging time limitation on asJcssrnents etc., are onlv tr,rocedura-l aspects of ler,1' and assessmcnt ol-t.rx. These are not strbstantive provisions. Assessing Officers irre competent to adjudic'ate on limitation since it is a mixecl question of fact and Iau,-

¶584

6+ Refe rring to Hindalco Industries Limited (3 supra), he submits that decision of the I(erala High Cor-rrt. :rs cxprcssed in the said case, is distinguishablc. In tl-rc said decisi.rr-r, Kerala High Cor-rrt did not cleal with the effect of Se'ction M of thc Constitution Arnendmt:nt Act and the savings provisron trncier Llrc State GST Act. As a matter of fact, State of Kerala had enilcted the irnpugnecl law after the permissible ri'rr-rdou pcriod of' olre year allorved trnder Section 19 of the Constitr.rtitrn Amencllnent Act. Lrkt:ri ise. Mr.Prasad submits that <lrc'rsr'on ol- th.: Gujnrat High

¶585

¶586

Court in Reliance Industries Limited (2 supra) t oltld irlso iravc no persuasive value for this Court.

¶587

65 Mr. Prasad, learned Advocate General, reliccl on a decision of the Supreme Court in Tirumalai Chemicals Limited Vs. Union of Indialr to contend that while right ol appeal mav be^a substantive right, the procedure lor filir-rg the appcal^{ir-rcluding the} period of iimitation cannot be called as sut)st antive right. An aggrieved person cannot claim any \reste(l^rigl-rt irt^proceclttre; that he should be governed by the old provision relating to the^period ol limitation. Procedural lar.r, is retrosl)ectivc,^{ttte:Ltringthereby,} that it may apply even to acts or transac tions^{tttl<[r-r thcre pealed} Act. Time and again it has been held and clariliecl br thc Supreme Court that every litigant has a vestcd right in sttl>stantivc^larv but no such right exists in procedural 1ar'. Accorclirlg to^{lr4r. Prasad,} law of limitation is generally regarded as^{proceduraland its object} is not to create any right but to prescribe^{perioclss itl-rin w'hich} legal proceedings be instituted for etrforcetnerlt of riqlrts^s'hich exists under the substantive larv. St.llutes of linritation^are retrospective insofar those appl,r' to all legal^{proc'ecrlirigs llrought} alter their operation for enforcing causc of actioll^{itccrLteclearlier,}

¶588

,, 12o11) 6 SCC 739

¶589

¶590

but they ;x-e prospectivc in the sensc that they neither have the effect of r,:viving the right of action nor do they have the effect of extinguistring a right of'action srrbsisting on that day.

¶591

66 Learned Advocate Ceneral has also placed reliance on a Supreme Court decision in Fuerst Day Lawson Limited Vs. Jindal Exports Limitedr2 in support of the proposition that when there is a n Ordinance r.r'l-ricir is foliou,'ed by an Act on the sarne subject matter. thc Act u'iii comc into force in continuation of the Ordinanc,:. In that case. a gaT,ettc notification was issued on 22.O8.L9<-t6'"r'hich appointcd 22.,r da1- of August, 1996 as the date on which the Act in question u ould come into force. The said gazette notification u,as^jsstred in t-rercise of the powers conferred by Sectiorr 1 (3) oi thc Arbitration ;rncl Conciliation Act, 1996. In the facts <.rf rhat c:asc. il s as ht'lcl thi.rr u'hile the Act came into force on !|2.08.199o, for all pr-actical and legal purposes, it would be deemcd to h:rve bce n elfcctivc fr-orn 25.01.1996, when the Ordina-nc: rvas prornulgatecl, particularly,, u'hen the provisions of the Ordiranr:e ancl thc Ac1 are sirrrilar thcrc being nothing in the Act so a:; to rnake tl-re Ordinance incffective. The Act being a continual ion oi thc^{(-trciinancr'.} s orrl,:i irc cieemeci to have been

¶592

12 (2OO1) 6 SCC 3s6

¶593

5-l

¶594

effective from 25.01 .,]996 u hcn thc first Ordinance came into force

¶595

67 Mr. Prasad has also pl:rced heavy reliance on Manish Kumar Vs. Union of Indials s herein Sections 3, 4 and 1O of the Insolvency and Bankruptcv Code^(Amendment) Act, 202O^was challenged. He submits that \'hen a legislation is challenged, more particularl,r', a constitLrtional amendment on the ground of being manifestlv arbitrzrr--r', it uould be incumbent upon^the petitioners to shos' or clemonstrate th:rt something was done by the legislature capriciorrslr', rrurtionall-r and / or without adequate determining principle'. Hc sr-rbntits that^wide latitude is^allowedto the legislature in enni l irrg a lirs .^'l'ire free dom to experiment must be conceded to the legislertur^('. I)articularly in economic laws. If problems emcrgc in tlre rior-l<ittg of laws and which require legislative intcrvcntion. t Irr C()url cilnnot be oblivious of the^power of the legislerturc 1o rcsponcl b-r' stepping in with necessary amendments. Sinc't' tlr,.: lilr. in this r:asc', the Second Amendment Act has been er-ractecl to aLlqnrent the revenue of the State, the constitutional^(loLrrir" rll lr',rn lrcrl'ilv in favour of such a 1aw.^The law under scrUtin\ is rrn t'i,rrrrrlnl(' rncas(lre. In economic matters,

¶596

rt 12oztl s scc 1

¶597

¶598

\'ider latitLrd(' is; givcrl to the lavu makers, rvhich is based on sound principle. Mr. Prasad asserts that even a vested right can be the subjcct matt(,r of rctrospective lau,. No doubt, such a 1au, mr-rst pass nras er Article s 14, 19,2l and 3004, of the Constitutior-r of Indi:r. Thcrciirc, the issue really boils down to whethcr the implrgnecl en.1( tment is manifestly arbitrary or not. If it is not, qllcstion r,f ir rlt rfcrcncc b1, the Court would not arise

¶599

68 [,car ne <l :\rilocale General has referred to and relied upon the clecision ol rhc lierala High Court in Sheen Golden Jewels (India) Pvt. Limited {7 supra) in great detail.

¶600

b9 I,1r-. l'r',rsr:rl ]-rlrs also relerred to an article titled 'Ircrnsitional Proli.si,rr.: it,^{(-ornrnercial} Legislations: An Analysis' br. Pri-r-al P;rrilih ar: :,rr',iilg to ri hich the view taken by a majorit,r, of Clourts is that th( r(.'(-nLtL- ar.rthorities retain the power to lerry- appropriatc t:rsrs undt r tlt,.' erstuhile indirect tax laws for events prior to thc. introcl uc:ticut rrf CiST.

¶601

7{) NIr Si lt:rvi . it:arncd scnior counsel for the petitioners in repl-r subnrits rlr.r1 tltrr Stertc has not addressed the follon'ing crtrr:ial

¶602

I i :,,1 ,l ;un( n(llrclll o[ Entrv 54 by Section t7 oi tlr,' i, ..ir,, ,1 11|]1,.D.]incnt r('1.

¶603

ii. Ellcct ol repeal o[ VAT Act for a-11 other goods except the goods lncntionecl in thc amended Entry 54 of List II as per Scctiorr I7-1 of the TGST Act.

¶604

iii. Conrpete nce of the State as on O2.12.2017 to^{pass tlrc} Sccond Amenclment Act, given the requirements o[ the^prcser]t legisl:rtn'e competencc as on that date;

¶605

ir'. Reqrrircment of simultaneous levy by Parliament and^Stitte LcgisllltLlrc lor lcgislative competence under Article^2464,

¶606

'. Ollectivc and effect of Section 19 of the^{Constituti,.rrr} Amerrrlnrt-r'rl Act-

¶607

\ r. Stalc drcl not aL all make any endeavour to shos'^iiuv rlistrngrr ish in g li'ature in the^judgment rendered by^{the Guj:rrat} I {igli CoLrr-t irr Reliance Industries Limited⁽² supra)^allclrvhr' the sirrrrt shoLrlcl not be applied to the^presentcase.

¶608

71 Mr. I?avi contcnds that it is not the stand^{of the petitione rs}

¶609

thal the Stalc hirs no competence whatsoever to^{promulgate thtr}

¶610

()rciirancr or to ('nact the Second Amendment Act. Stilte does have tl.rc po\'er .rnd competence in respect of the^{goodsspecrific.rll- mentionerl in the :rmended trntry 54 but not^goods in^{general. It} is the r:ontcntion of the petitioners that other than^{tl-re goods} mentioned iu amended Entry 54, the State does not^possess legislativc conr l)c1encc. This crucia-l aspect^was not collntcre(l^{b th c St.lte.}}

¶611

72 Mr. Ravr submits that it is not the argument of^the petitionc-rs tlrat tlrt C)rciinance or the Second Amendmetlt^{A(ll :rre} manilestl-r' :rrlritr-ar., or that those cannot be^{given retrosp.ctivt-} eflbct. Thcrefirrc, thr' .rrgllment advanced by the^{learnedAdvoc:arc}

¶612

¶613

¶614

General t,ased on the principies of m anifest arbitrariness or retrospect.vitv ar-e not at all germane to adjudicate on the issues raise d by t.he petitioners.

¶615

73 Besirles reiterating reliance on Reliance Industries Limited (2 supra| and Hindalco Industries Limited {3 supra}, Mr'.Ravi has also^'rressed into service a decision of the Allahabad High Court in Jain Distillery Private Limited (4 supra).

¶616

71 hrsoiar extension of time limit in titx tr.rtrer,. is concerned, NIr-.Ravr strbmits that time limits are a fettcr on the jurisdiction of the departmental authorities. Enlargement of tirne under the Sccond Amendment Act in extending thc lirnitation period i:rmoLints o conferring jurisdiction o1t ciilpartmcnt.rl eruthorities I hat did not exist eerrlier. Therefore, such an :rmernc]rncnt is not rnerelv fo^- securing old liabilities but impacts the rights of assessees, thus being a fresh legislatiort s'Lich is der.oid of 1i'gi slirtive competence.

¶617

75 [nso{ar reliance placed by learnecl Advoca,.e (}eneral in Tirumalai Chemicals Limited {11 supra) it rs sr_rirrnrr,ted that thc s:Li,l c'lecision is of no application to the prcs.-'n1. b.r1{rh r-.f c;tses. He srrbmils t'rat the question for determirralion irt hat case $'as rt ht:l her tlrc: limitation to file appezrl agalnst or-der for r..iolzrtion of

¶618

¶619

provisions of Foreign Exchange Regulation Act, 1973^(FERA) u,ould be governed by the appellate mechatrism uncle r the^Foreign Exchange Regulation Act, 1973 or under the Fort:ign^Exchange Management Act, 1999. The above decision has tto^relevance insofar the present batch of writ petitions is^{concerned rvhere the} challenge is primarily to the competence^{of the State Legislatureto} enact the Second Amendment Act :rfter the^Constitution Amendment Act.

¶620

76 Regarding Fuerst Day Lawson (12^{supra) t't:lit'rl r-tpon Lr-r'the} lcarned Advocate General, Mr. Ravi submits thrrt^{irl rhe present} batch of cases petitioners are^primaril-1' cot-tccrrlt:cl^{ri tt h} lhc^vailidit-v of tl-re Second Amendment Act and not thc Orclirtart<^t .^{Er en} if it^is assumed that the State had the compcterrce to^{pt'ottlttleatethe} Ordinance in June, 2017 before ortse't of CIST^s itlr t'fllct lrom O\ .O7 .2017, by the time the Second Amett(lmcrtt A('t^{\ as passed,} the State had lost its competence for !egisltrtirrg, ()n good s I lt gcneral, except for petroleum prodLI(r1s :rnd lirlttot- Iirr httnlan consumption as mentioned in the atnclltlccl Etrtn .--t o1' l-ist Il. I{ou,ever, he submits that though tltt'^{()r'dinar-rct'} lt;ts Itoi^ltt't'tl spccificallv challenged, nonetheless. it is clcarr tilat^()rr .tntl^l-r-om 16.09.2016 u,hen the Constitution Att-ttttdmertt .'\ct^{c:1rll(r rllt()}

¶621

¶622

force, the Ordinance could not have been promulgated. Thus, both t]le Jrdinance and tl-ie Second Amendment Act cannot be sustained a-fter 16.09.201b. Again in this^judgment question of legislative competence of the State to promulgate an Ordinance followed by an Act on the samc subject matter was not in issue. He submit.s that an Ordinance as rvell as an Act are two pieces of legislation. Legislative competence of each has to be separately determineC in the ligl-rt of the Constitution and the point ef tirae when thor;e u,ere enacted. Insotar Manish Kumar: ( 13 supraf is concerned, he submits that it is not the case of the petitioners that the liecond Amcnclmr:nt Ar:r should be strucl< down on the ground of being manifestl,r, arbitran . That apart, rvhile there can be no dislrute to the p;-oposition that a n ider latitude should be allowed to the legislature u hile legislating cconomic laws, it is also equaliy cl,:ar that u'hile makir-rg such ii-ni', t he Legislature or the Parliament cannot transgress thc constitutional iimits. In the instant cirse. the challenge to tl-rc Seconcl Amendment Act is purely on the ground ol lcgislativc conrpctence; rather lack of legislative compe[ence . Petitioncrs arc llot questioning the legislative u,isclorn in extendir-rg tl'rc lir-nrtation for making assessments, rcasscrssrncrrts. revisions^('tr-.. from for-rr years to six years, bu, havc rllrt:stionccl the Scconcl Amendment Act on the

¶623

¶624

ground that the State did rrot havc tl.re le'gislative competence to enact the same.

¶625

77 Insofar Sheen Golden Jewels (India) Pvt. Limited (7 supra) IS concerned, lcarnecl senior counsel submits that a division bench of the^(iLrj:rrat Hiqlr Cr)rrrt in Reliance Industries Limited (2 supra) hars rlrstinrltrishccl tlrc said decision. in Sheen Golden Jewels (India) Pvt. Limited (7 supra) petitioners had challenged validit-r' ol Section^'l 7-l of the l(erala Goods and Services Ta-x Act,^')0 l 7 u'l'rich rs Trrr-i n'LcttL'ria to Section 174 of the TGST Act, on thc :rrrvil ot Sr'r'tion i 9 ol' the Constitution Amendment Act. Accorrlinq l() Nlr.li:rvi. petitioners herein are not questioning valiclin' ol Sct'lion I 7-1 ol' the TGST Act. Rather, according to the pctitioncrs. Sc<:t ion I 7-1 ol the TGST Act only supports what is being t onl<'r.rtlcd l;r' tl-rc petitioners.

¶626

7B The article, "l'rcLnsittctr:rtl /)r-ol,i.sion.s irt Contmercial Legislation: An Analysis'fo11os s tlrt' sirrn,' loqic rlrven lrv tl're Kerala High Court in Sheen Golden Jewels (India) Pvt. Limited (7 supraf. That apart, the article also rt'lit'rl r.ryron tlrc clc-cision of the Gauhati High Court in Lakshminarayan Sahu Vs. Union of Indiala u,hich dealt with validitv of shori^(:rLrsl r)(ltrc(:s tbr service ta-x after Section

¶627

14 2Ol8 SCC Online Gau I457

¶628

¶629

174 of the State CST Act was brought in. Mr. Ravi submits that according 1o the aforesaid article, Section 19 of the Constitution Amendrnc nt Act has clements of both transitional as w,eli as savings c ztuse. Holvcver, he contends that Section 19 of the Constitr-rtion Anrcndmcnt Act only suspends invalidity of the inconsistent Iegislation for a period of one yea-r or till the itrconsistc'nt. lesislations are amended or repealed. He asserts that Sectior-r 1(l is neitlrer a source of power nor a savings provision. It is onl.v a transilion: provision

¶630

79 NIr.li.ll.R.Vrsuanath, learned counsel for somc of thc petitroneri irlsrr rtadr: submissions replying to the argLtments adviur, t:rl l>r tl-r: lrarnecl Advocate General. While admitting that learrnt'rl .lrlr, oc:rtt'^(icncrarl rvas only partly correct in submitting that trnrr lirnitrLtior-rs are procedural and not substantive, he, hos'er cr , srrbr:r^jt:.; that in tax jurisprudence time limitatior-rs prest:r'i1.rt, l l()r rri,liing assessments, reassessments, revisions etc are^{juristlrctiorral} in nature and are thus fetters on the taxing ar-rthoritit s. In tltis c'onnection, he has placed reliance on a cir:ctsi,rlr r)l i lc Sul)l'entt' Cotrrt in S.S.Gadgil Vs. ITOts. Retbrring to Tirumalar Che micals Limited (l t supra) relied upon l;.r the

¶631

ts 53 ITR 2:l i

¶632

¶633

learned Advocatc General, he submits that in the said case Supreme Court u'as dealing u,ith the limitation prescribed for liiing appeals, rvhici-r is ol entirely diflerent nature.

¶634

B0 Mr. Visrranath submits that two dates are extremelv crucierl Firstl_y, 16-09.20 i 6 u'hen the Constitution Amendment Act came into forcr'. Se,'concllr', 27.O5.2O\7 when the TGST Act $,as enacrecl. The Orclinarnce as s eil as the Second Amendment Act u,ere made subseqLrent to thc cn.lctment of the TGST Act. Therefore, leanted Advocate Ciencral is not right in saying that the Ordinancc ii'as prornulgatccl pr-ior to coming into force of the TGST Act. Thus. lrc u'oulcl srrbrnrt ti'i.rt ncither the Governor nor the State Legislatr.rre hacl 1e gislartiYe c ontpClet-lce to promulgate the Ordinance or to m:rke the Sccorrri Anrctrdment Act after 76.O9.2O16 and also aft.rr 27.O5.2017 .

¶635

Bl Rcfcrrin.q tl St:ction 19 of the Constitution Amendmcnt ..\t.r, Mr. \1jst'anatlr sr rlrrrtrts titat the window provided by Section 19 ri zrs r-onrplclelv eslliuslt,rl ort 27.O5.2017 when the TGST Act^{., lrs cn:rcted and Se,.'rii.,n ll'-1 thereof partially repealed thc \rA'l' .\r'r. Tl-rcre is no rncrrt lr tiie :rr-glLment of the learned Advoczrtc Ct,nrlirl th:rt Section 1(l o: rirr, Constitulion Amendment A<:t r.oLrlrl l,t rnr.,oked even allet- .l ,'.()5.2017 and that the Ordinancc rrirri Llrc}

¶636

¶637

Second Amendment Act owe their genesis to Scctior-r 19. He further s -rbroits that neither the Ordinance n()r the Second Amendment Act can be traced to Article 246A of tl-rc Constitution.

¶638

82 insolarr decision of ttre Kerala High Court in Sheen Golden Jewels (I:rdial Pvt. Linited (7 supra) is conccrnr:cl, lre sr-ibmits that in thr: said case the challenge rvas made to ticction 17.1 of the Iierala Goods and Services Tax Act, 20 17 q,hich is pari rrruteria to Sect ion 7 4 of the TGST Act. Petitioners h,rrcin irrc not chzJler.rgirg validity of Section 174 of the TGST Act. IIe, therefore, submits t rat there is no merit in the arguments arlvancr€cl b,v the leerrned Arlvocate General.

¶639

83 Sub^-nissions made by learned counsel lirr tlrt' pitr-trcs have rcceived tl-rc clue consideration of the Court.

¶640

$'l We shall first deal with the issue rr-latinri to leuislatir.e cornpetcnrc'. Heading of Article 246 of the Cor-rstirr.rtiorr oI India is st-tb-icct nr:ltt('r of laws made by Parliamei-rt arrcl l;r' rltc I-cqislittures 1n ()f Stzitcs Clause (I) says that notrvithsr:,ut <lin g iurvthing clatr,scs (, ) zlI-rcl (3], Parliament has exclusir-e l)()''('r I(r :ntrke larrs lillr r-c-sp:ct tc. any of the matters enurnerari,rl i:t l-rst I (Union I-is1r of tlre VII Schedule to the Constitution oi I:tr] ia. As per (liztise l2l. not$,ithstanding anything in Cllar.rsr: {3). i)arliament

¶641

6-1

¶642

and subject to Clause (l), the Legislature of an.r' St:rtc rrlso I'rave [)o\rer^{to make laws with respect to anv of thc merttcrs enlrmerated} in List [[ (Concurrent List) in the VII Schedule. In terms ol Clause (3), sub.iect to Clauses (1) arrd (2) the Legislature of an,r' St:rte hzrs cxclusive power to make laws for such State or lurv pil rt thercol rvith respect to any of the matters enumerated in List II (State List) in the VII Schedule. Clause (4) clarifies that Parlianrent hrrs pou er to make laws with respect to any matter for an-r' p:,rr-t of thc lcrritor,y of India not included in any Statc notri ithstrurrling that such matter is a matter enumerated in the State' List.

¶643

Tl-rus, the power to make lar.r,s citl-rer l;_r'the Parlieirrt'nt or b;' tl're State Legislatures is traceable to Articlt' 2-ltr of the Constitution of India. The Lists in the VII Schecltrle dc1-ines :rnd limit the respective competence of the Union :rncl the Stzrtts. The variours entries in the three lists of the Vll Scht'clr,rlt ztrr' not soLrrces of legislative power. These iire leqislalir',' ht'acis clemarczrting the field of legislation; ol cotu se. irt'ing Llr, lrr:lrl of legislation, the entries should be given the s'iclest possil-rle amplitude.

¶644

86 Prior to the Constitution Arnendmcrlt Acl i.e.. 1;rioI tcr 16.O9.2O 16, Entry 54 of List II s'as as loilous

¶645

6,1

¶646

"54: Toxes on the sale or purchase of goods olher thatt netaspapers, srLbject to the prouisiotls of entry 92 A of List 1".

¶647

86.1 It nas on the strcngth of Entrt'54 of List II as it then existed, tt.at the VAT Act u'as enacted

¶648

87 Aftel the Co n stitr-rtior-r Amendment Act came into force with effect fronr 16.09.2016. Entrv 54 of List II nou'reads as follows:

¶649

"54. Trl,t-es on the salt: <tl' pelroleunt t'r-ude, ltitth speed dtesel, motor spiit (contmonlg krrorrrr crs petrol). neturel gas, auiation turbiru,- fuel aruI alcoholic liquor for hunturt <:ortsuntptiort, but not irtclud"ng sale it the course Dl inter-Slele tro.le or contmerce or sale in the :ourse of intentatictnal tntdc or ()n1.rlt,nr of stt<:lt ctoods".

¶650

88 Thus, on and from 16.09.2O1(r. thc r:r>rnpetence of the State Legislature got trrrncated, it I'rad competencc to enact law only on the fields mentioned in Entn 5.1 as srrbsLituted i.e., regarding taxes on salc of petrolcum crurcle , high slreed rliesel, motor spirit (petrol), n atural gas, aviation turbint- hrel and alcoholic liquor for human consumption. Hou'evcr. thcrc is :r fiirthcr restriction in as much as the ta-xe s sl-rould not be on salt' of such goods in the course of inter-State t rirde or conlmercc rrr s:lle irr the course of internatic,nal trade or commerce of such qoods

¶651

89 The Second Amt:nclrnent Act, as :rlrt:irrh' rroticed, enhances the limitzrtion |ef iod fr-oln four- r-ears t(t si\ ('jrT's rr-ith respect to assessm€nt, reassessnlclrt. rcvisi()n et('. ll cor ers all general goods arcl is not confinccl to the {lve I)r'troh'rlrl products and

¶652

¶653

a-lcoholic liquor for human consr-tmption as mentioned in the substituted Entn' 54 ol' List ll. Thcrc{brc, State Legislature of Telangana did not have tlrc cornpetence post 16.09.2O16 to legislate the Second Amcndmr:nt Act \'hich could be traceable to Article 246 read with Entn' .54 of List II ol thc VII Schedule to the Constitution.

¶654

90 The Constitution Arncn<lrnelrt Act illso inserted a new article immediately alter Articlc'^)-1tr u'ith t'l-lect I'rom 16.O9.2016. As^per the new Article 246 A, it provides lbr special provision with respect to goods and scrvic't's t:tx. Article 246 A is extracted hereunder:

¶655

"246A. Special prouision ttith respect to goods and seruices tax:

¶656

(1) Nottuithstondrnrl Lrtr4tlLutrl cottlttited h Arlicles 246 and 254, Parliament, antl. srrl,tt'r'l t.)⁽ 1(rrrs€r ()), th<: Legislature of euery State, haue pouer to D?(rkd 1rltr s t|irlt rt,'.s1.,rccl lo^qoods and seruices tax imposed by the I;nr n rrr /ll srrt lt .Slrr[r'.

¶657

(2) Parlirtrnt:lt^l' ;.;^r,il,:1",' t).)itt r tt) tttoke lcuus tuith respect to goocls r^,ti r ",i ,', ',r'r^,r'ri,-'r.,' iitt' :1il)Pl!l cl'g1oods, or of seraices, or ltollt lttl..t:; rrl,r,, t,i l/r,' t'otttsr' itl irtter Stclte trQde or commercc.

¶658

Exltlartctl iort. l). :,' ':.,,,,r'r/ llris rtrltr'1r:, slt,lll. in respect of goods and sr,rt tri jt ','rl'?-'i'(/^:,, tri llritts-t'⁽⁵¹ rtl t\tticle: 279A, take effe<:t -frorti I/tL'^(1(rl,' t, tt)D.t1t'Itied l)r/ llia'(;ooals rlnrl^Sert/ice.s Tax Council.''

¶659

91 Clause (l) of Articli' l']{r A strrrts u'ith a rlon'obstot"Lte ciause. It says that notrvitl-rstrnrlrnq .l11\ 1lr11rg c-ot-ttirinecl in Article 246 (distribution of legislatit t prir,i.ersl artd r\rticle 25-+ (dealing rvith

¶660

¶661

inconsistcncl between larrvs made by Parliament and larvs made by Legislatr:res of State), Parliament and subject to clause (2), the Legislature oi evcrv State have power to make laws with respect to goods ar.rrl sen,ices ta-x (CST) imposed by the Union or by such State. As per r'lause (2) Parliament has exclusive power to make laws nith resp('ct to GST rvhere the supply of goods or of services or both takcs place in the course of inter-State tracle or commerc(. Tlrr Dxplanation clarilies that provisions of Article 246A in respecrr ol GST shall take effect from the date recomme ricled 1r.r' tl-re GST Council in terms of Clause (5) of Articie 279-A.

¶662

92 Thrrs s h.rt Article 2;t6A provides is that both Parliament and tl-re [."('qlslirt urc of every State have power to make la'*,s u,ith resl)ect 1(,^(;ST inrposed bv the Union or by such State except in the case rf^(iS-l' rvircrc the supply of goods or of services or both takc's pli: c t' in L1)e (:oursc of inter-State trade or commerce in which car;e l)arliament has the exclusive competence. Of course, such cr)a.'rnrr'rri $ill tarkc eflect from the date of recommendation bv the^{(l:;'l' ('oLrrtr:il.}

¶663

93 Ar-tr,-lr. .3tro of the Constitution of India defines various expr'('ssror s ri lric'h l'incls 1>lace in the Constitution. Clause {12)

¶664

¶665

defincs "goods" to inclucle al1 materials, commodities and articles Clause (124) uhicir las inserted b,v the Constitution Amendment Act rl'ith efft'r't fronr l6-09.2016 defines "goods and services^tax" (GST) to m.':lr) :ln-' t.ix olt supply of goods or services or^both except til\rs on tlre surpplv of alcoholic liquor for^human consumptior-r. Clar-rse^(26A), also inserted by the^{Constitutiotr} Amendment Aot \'ith cflt'ct from 16.O9.2016,^{defines "services"tcr} mean an.'thrn{ ot}-tcr tiran^goods

¶666

94 Article 24(r A^r-, f thc Constitution of India came up^for analv sis l)t l,rr-r' riri :.Lii)r-rrnc Court in VKC Footsteps India Private Limited (5 supra), Supreme Court has held as^follous:

¶667

''-l-l .\tlrL l' )7r'r' i,'1's brouqht about seueral changes i1 the ctort slilti lrr rrlr r I .r'i,, " r'

¶668

(i) Frrstllt. .-\rtult: 216A defines tLe source of power as ruell trs tlt? Ji<'hl ol' i.'(ttsintit)n lluith respect to good.s and seruices t&{) obuiatintl tlt( n<'t'd it] lteLel to the Seuenth Schedule;

¶669

/iil^{.sr'<r,ncl/rl.tlrt' proui.sions of Article 246A are auailable} botlt to l\rliorn crrt ,rricJ tl1(: Stale Legislatures, saue and except for lhe r:-rc/u-sruc pt)rr.'t t ol Porliurnent to enact on inter-State trade or coit me:rt'e: utrcl

¶670

Ititl^{'l'lrir,l ,,.l.ti;t lL: 2,16A} embodies^{thecottstittttiortal} Ttttrtctitk'^{r,,r ';irr"r ,'."r.1 i, t'tlrt.s distinct} from^{the pirtciltlert-l'} ( ( )r ( 'r ,-ri^,r ( 1, ( ,,r .,,.',,,'. rllrir'/r operated u,tithin the foltl tt.1' th.,:' (-ortrrrrr, nl l-r.rl, ir r- rr'.;rrlrlr'r/ ity Article 254".

¶671

q5 TIrus, ir< co:'clirril^',r, tlrt' Sr-tprcme Court, Article 246A clcfirtes the sor-rr-ce ol- pos t r rrs rltll rrs the field of legislation u ith respccl to CIST. olrvizrtinq tlrt-' iiL't'tl to tr-eivcl to the VII scl-rcclult'.^Tltis

¶672

¶673

power is avaiiabie both to Parliament as ',veil as to the State Lcgislatur:s except in the course of suppl), of goods oi' sen.ices oi' both ir-r the course of inter-State trade or commerce. What Article 2.16A crnl:odie s is the principle of simultaneous lev_r. b1, both the Parlitrment zu'rd by the concerned State Legislature, distinct from the principle ol concurrence.

¶674

96^'fht' nature of Article 246A of the Constitutio,r of Inclia u,'as examinr'<i b.r' the division bench of the Gujarat High Cor-rrt in Reliance Industries Limited (2 supra) r,hcreafitr it ras l;een helcl as loliou,s:

¶675

''u). 'l'he issue cc.n olso be looked into Jiont u Lh.l.ti.re,tll enqlc. .'\tlit !, -'46A oJ the Constitution of India has bt:en rns,,,rtrt? irr lh.' t r,,t.s;rl:rlirrrt of lndia to prouid.e for integrated potuer i(-) tlre i )irirrr o/jntlto rt,rtl the States to make a common Iaut to leuy lrlr .l: llit, "r/r.,rtls (.|, r,.i \1'ruices'. Article 246A is not okin to the 'con<-urr.nI 1-rsl^' t'rlut:t uled h List II in Schedule VII of the^(-'on-sl ilri tr o/t ol hrrlttt tt.'itiL lt trtpouers, either thLe Llnion or the State, to nrtkc klt,.s rr,,illr 11r.:^/)('(l lo leuq of tax on either the goods or seruices. 'l'h., Porlitrtnc,rtt ill rls u i,-^./om did not incorporate pouer to makc /olr,.s r|irh r?s/)('(.f lo lila^(/(/,)cl.s Qnd seruices tAx" in the "Conatrrettt list' t,rr;rnie,rirlr'r/ irr !.tst ll! n Schedule VII of the Cortitution of India ltut irts:rted u rtt tt, LLrlick: 2.16A in the Constitution of India to cort.fer or itte,qrutcrl rx)i{r'r'. ro lnth the Union and the State, ruhich i-s Io l.c ,,r,.r-r'rscrJ .:-r,f i/11,i/r(1)lr.srU by both, to make a common latu to l€ltl, lc.r orr lhc '.grotlt .u1d seruices". The putpose of this Cottstitutiortal arucrtrlrrrcrtl rutts tt :rhaps to hnue a uniform "goods and sen,,ict,s [a-' letr.t 'it,r titql tnrt tlrc country.

¶676

It pitna facie appears tltcLt the potuer cotrlerrt,d bt1 urliclc -'-it,.1^11t 1;,. Constitution of India is to be exercisecl Iry l;otit tht: t'rtiort ,trt<l tlt,'Stut<.s concurrentlg to ensure uniform "gyootls on<1 sL.rr)i(.(,^ '. t . !, ; r' rt![ t-'uer the country. The Un-ion oJ' lnrlic: ()r .si.]tr,i-. ( .l/rt()l \r 1),1r ll ( lt1 cxercise pou.ter giUen bg article 24ttA ol lirL (: r,,rstilirii()ri (, ttl,l:tt I t,lrl).,tldent of each other unlike llte lxttL'r r !liLttr, 7,r, ,r',r' '( ('t'( 1t 1t nt l,ist" enumerated in List 11I irr Scht',lrrlt \ill r,l tht, ( ,,f;slii i/i(,r ,tl'Irtdia".

¶677

¶678

97 In Baiju A.A. (10 supraf the challenge before a sinqic bcncl.r of the Kerala High Court was to the legalit_r, of the notice s and assessment orders issued in connectior-r u,ith thc alsscssrnents under the Kerala Value Added Tax Act, 2003 lor the asscssmct-tt vears 2010-2011 and 2Oll-2O12. The challenge nas^{madc on the} gror-Lnd that the concerned authorities did n(rt l'iavc tl-re jurisdiction to issue the notices and assessment orclers sincc the arnendments introduced to Section 25⁽¹ ) o1' tl-rc' Iiclalir Valltt: Adcled Ta,x Act, 2O03 through the Kerala Financc Acts of¹⁰¹ 7 anrl 2O18 notified on 19.06.2017 and 31.03.2018 resp€rctivch' clicl not contemplate a retrospective operation ol tl-re amenderl pror,rsions Section 25 of the Kerala Value Added Ta-x Act. 2003 dcais u itl-t assessment of escaped turnover. In case of escaped tr.lrnovci tbr .lnl reason the assessing authority could cleterminc to thc brst of hi s jurlgm ent- th e. turrrover-whi.ch-had escaped- asse ssm en t to tax al :tnY time u,ithin five years from the last clate of the veiLi" t cr rvhich the return relates. As per the last pror,,iso the periocl for c:rrmpletion of assessment was extended up to 3l .03.2016. Rr rlre Kcr:rlar Finance Act of 2017, the period of limit:ition under Scctron 25 (1 ) lor proceeding to determine escapecl tLirnover u'as cnh:rrtcccl Iiom five vears to six years and in the last proviso the extensiorr u'as madc up to 31.03.2018. Thereaftr:r. b.r' the Kerala Finiincc

¶679

¶680

Act, 20 18, in the iast proviso, the extension \ias macle up to 31.03.201l

¶681

98 One of the questions framed b1' the I{erala Figh Court was rvhether alter the Constitution Amcnd.menl- Act and repeal of t1.e Kerala Value Added Tax Act on 22.06.2O17, the State legislature retained ary residual power of legislation so as to amend the provisions of Section 25 (1) through t1-r c l(crala Finance Act, 2018. After due <:onsideration Kerala Hrgh court ircld as follows:

¶682

As already noticed above. the ilrrellduents effected to Section 25 (1) cfthe KVAT Act, through tire Kerala Finance Ar'r 20ll', u'ere before the rep{.-al of the KVAT Act with effect fron 22.06.201-7. The provision as it stood then, and in particular the third proviso therero. authorised the reopening of past assessrnents till 31.03.2O18. The ,urendrnent effected througt. the Kerzrla Financc Act, 2O18, \'itlt c1Lct irorl O1.04.2018, enlargerl the period for re'opening past assess!rcnts konr 31.O3.2018 to 31.O3.2019. Under ordinarl. circumstances. an<i based on my findings above aLs regards thc effect of the amendnrents lrr-oLrght i:rto the third proviso to Section 25 (1) b| the Kcrala Frnance Act. 2017. rhe legislative measurSs should have sufficed to justifl- a reopening ,)f past assessments up to 31.O3.2O19, noh,i-ithstanding that the amendrnent rtsell was effective only from 01.04.2018. Ho$ever, thc irltcnention of tlrr: CAA 1016, and the conseqrtent repeal of the KVAT Act with cffcct lr-om 22.0(>.2017, has a bearing on the^'legality of thc 2018 amcndmcnt. i\ distinction does exist betweerr the saving of rights, prl ilcges, i rmunitirs irnd li.rbilitrcs under a repealerl enactment, through a savings r:Jirtrse irisr:rtcrl in the new enactm'rnt traceable to the sa re legisltfti\ e 1:ou cr, arrcl an amendment broughl in to a repealed cnactnrent .tIter thc iegisl:rtire poq,er itself is taken away. White tl.re legislativc porrer -jtrstil\ ing botir actious, prior to the CAA 2016, could have beerr traced to Articlc 2-1b ol ortr C()rrstitLltion, read wltfi thr: ralevant entry in the Vlltlr Schedule thereto. the position changed lvhen there rvas a fuldarnental shift in the natrrrc f tlrc ta-r levv and a fresh ct nferment of legislative porl cr to le€iisl.r1c irr r.slt,ct o[ the nerv levy. After the CAA 201 6, the State l,egisl.rtr-lres stoori rlcrrirrltri ol thcir power to legislatt: in respect of tatxcs oll sale crr purch;rst: ot llt,orl:;. fllait \'as covered under llntr v- 54 of List It of the VIItil Schedulc to thc Constitution, and they w:re instead coriferred rr,ith legislative i)o\(rs, to be exercised simultaneouslv with the Parliarncnt. in respect of t;u,:s c,n sr.ppl-r, of goocls or services or both. While tlre nclr. legisiative lxru ei coLrlrl -iustity thc inclusicn of a savings clause in thc nc1- legislation enil( lc(l irl rcspcct of the ner., lery of to<, to save ircc.lle(l rights, pririietcs. irnmrtrritir:s etc. under the erst\tile enacllDcrlt, the deletioir oi ll:rtrr .;.+ of I-ist II automaticallv dcnrrded thc Stal(' Legislaturcs o[ the 1).J',r -'r to furtl]cr

¶683

¶684

legislate on the subject ol-tax('s on sale or^purchase ol^qoods. except to the limited extent retained Llnd(:r' the Constilulion.^'l he por|er to amend a statute being a facet of thc' lesrsl;rti\1' lxrut'r rtsel[, tl']c State Legislature could not have exerciscri a po\1'r to amen(l tlte KVAT Act, save to the extent permitted, !'hen it rlirl rrot retain anr resiclual right to further legislate on the subject of ltrxes on sale or I)urcltase of^goods.

¶685

99 According to the Kerala High Court, after the Constitution Amendment Act, the State Legislaturcs stood denuded of their power to legislate in respect of ta-res on sale or purchase of goods covered under Entry 54 ol List II ol the VII Schedule; rather they were conferred u,ith legislative po\'ers to be exercised simultaneously with the Parliament irl respect of taxes on supply of goods or services or both. While the ncri' legislative^power could justify the inclusion of a savings clartse in the ne'*' legislation enacted in respect of the ne\'^le '"r' o[ t?1.\ to save accrued rights etc., under the erstwhile enilctmcnt, thc trtlncation of Bntry 54 of List II automatically denucled tl-rc State Lcgislatures of the power to further legislate on thc srtl>ject o[ til\es orr sa]e or purchase of goods, except to thc lirnitr'cl estr'nt retained under the Constitution. It has becn ltt'ltl tltrrt tht' I)o\'cI- to amend a statute being a facet of the legislatrvc l)o\'i r itst'll-. the State Legislature could not have exercisct t,r thr' txtclrt pt'rrnissible u'hen it did not retain any residuzrl rirlirt to titltlrt'r lcgisl:rtc on the subject of taxes on sale or purchzrst'oi^qtto<is

¶686

¶687

100 An identical issue came up before another single bench of the Kerrla High Court in HINDALCO ilIDUSTRIES LIMI?ED (3 supraf . Frllou ing the same line of reasoning adopted by the previous lrcnr:h in BAIJU A.A. (fO supral it has been held that after the Consl itutior-r Amendment Act, State Legislatures stood denuded of their pourer to legislate in respect of taxes on sa-le or purchase rl qoocls that r,as covered under Entry 54 of List II of the VII Sched rilt.. t irr,.v have instead been conferred with legislative powers 1o l>t' t,xercisecl simultaneousiy with the Parliament in respect of l erxes on supply of goods or serrrices or both. It has been held as lbl,o\ s.

¶688

.. . . . ........Afier the CAA 2016, the State Leqislotrrr,.: ::tor,cl darrucled ol'thetr poluer to legislate in respect of tan-e-s , ,r -\a/( ,), 1)i{rcrr(r-se oJ'goocls, tllet was couered un<Ler Entry 54 of Lisr II .)/ 1/r(, s(,r,tlrlh Scherlule to the Constitution, and they uere irrstr:rrc. r'. trr_i rr,:cl u'tth le:qlslatiue powers, to be exerctsed sinrultr. rrco,isir/ tt'ith the Parlioment, in resped. of taxes on supplg of gloods tr .j{'r i,r..'. ot I )olla. ll.4tilc tht: netu legislatiue potuer could justi-t-il ti,, ;r, /risir,rr o/- .r sauings clause in the neut legislatiot-t errcu:l(tl r,i r( -:,)r ( 1 pl lht, ncut leuy of tox, to soue accrued ights, priuileqt.. rrr rrrurirtir.s. .ttc., Ltn(Ler the erstuhile enactment, the delelit)r ,tl l:t;!r'tt :t1 of l-ist II o.utomattcally denuded the State Legisltt trt, t',: il1r [)t)tt)t:t lct further legislate on the subject of taxes on solt i't /rrrrcira-s,, of goods, except to the limited exte.nt retained under the⁽ i),t:rrlrulion.^'l'he pouer to amend a statute being a facet of Lhe e tli: ltt'r't' l)t.rrl:t r itself, tlrc State Legislature could not haue excr-cis, ,l t t ; ,L tu r't tt t urrr,-:rul lhc: KVAT Act, saue to the ertent penntl: (i. irr/rL,,r rt titd rutL retein attg residual ight to further ler\islot^. o'r tlr,' .lbti,r'l ol-lo-r<,s ott sale or purchase of goods".

¶689

7.1

¶690

101 A clivision bo'rch of the Aliahabad High Court in M/s. Pankaj Advertising Vs. State of U.P16 u,as examining challenge to the legislativc cornpctcnce to the imposition, collection and realization ol tr d vcrtisc'rnen t tzlx r:nder the U.P. Municipalities Act, 1916 on the grolrrrd th:rt rvhen there is no provision to impose such ta-x therc can be no pou'er to frame any by-laws in that regard. The pou cr to levv advertisement tax was traceable to Entn' 5.5 o1' I-ist ii. .,\llah:rbad High Court noted that the Constitution i\mclrdrrcnt Acl came into effect from 16.09.20 16. U.P. Goocls ur.rd Sc'n iccs Trr,r Act, 2Ol7 canne into operation v'ith effcct frorn O I .07.201 ; 'f Irt' l;.r' lau.s by which the municipalitie s intendecl to lcr,,r, ancl c'ollecl rir.\cs on advertisement were framccl on 12.01.2017 br-rt irtr[-tlis]rt'cl on 19.08.2017 i.e., alter 07.O7.2017 ',r,hen^{thc U.P.GoocisanrlScrvicesTax Act, 2Ol7 came into effect} Allahabacl High Corrrt also noted that by virlue^-of-the Constitution Amendment A<'1, [in1n 55 ol [.ist r,l'as omitted. It was in that contcxt tlr:.rt Allarhalr:rrl Iiielr Court held that after omission of Entn' 55 ol List II ol tht' 'll Schedule to the Constitution of India bv thc Constitr-rtion Anr.rr(1rn('nt Act \'ith effect from 16.09.2016. e/en the State Legrsl:rturtr rlicl nr>t have the legislative competence to levv or collcct talscs .n lrrlvcrtisement which u,as earlirr

¶691

tlLrlL,)^-r r,S lli : li^(.\ll)

¶692

¶693

available rncter Entry 55. Further, the bench rroted that the po\rer io ia-\ earlier vested with the municipalities uirder Section 128 (2) (VII) of the U.P. Municipalities Act, 1916. Har.rng been omitted b'.' r'irtue of Section 173 of the U.P.Good:; and Services Tax Acr, 20I 7, the municipalities did not havc the stertlltorv competen( e to lev,, impose or collect advertisemenl ta-. Further clarrif-rir-rg ihe position Allahabad High Court hcld ti-rat tl-rc State krgislatur,r u,as invested with the p6wer to make [l.rw,s rn respect of lrxes r'n advertisement vide Entry 55 of List II to the Vll Scheclrrlt: brit the said entry was deleted by thr. Llorlstltution ,,\rnenclrnc..rL r\ct u'ith effect from 16.O9.2O16. TItc Llrrrrstir r-rti<.rrr Amctrclnri':rt Act r"'ide Section 17 amended the VII St l'rerlrrlt' and ortrittccl Irr)tr, 55 of List II, thus deleting the powcr- {)[ th{] St,rte to Ini,rkc lan -. rn respect of taxes on advertisement.^'lhe r-clor-c, s'her-r 1he Statt ,r as clenuded of the power to make lau s, rt r csl)rct of t.,r-\e s⁽⁾ⁿ rdvertisement, obviously the municipalir rt,s rr e:-e also divt'stt:rl⁽⁾¹ thc pou'er to impose any tax on advertist.rt rr n r

¶694

to'2 'lhis line of reasoning has also been follou t-rl lrr' :: laler division ir,:nr:h of the Allahabad High Court ir.r Jain Distillery Private L mited (4 supraf . In this case, the .\ll, ih;rrr,r11 Higl'r Cot,u I cr, rnrnerl the position as to the comp(,ti'ltc(' oi the

¶695

¶696

Parliame nt and State Legislatures to enact 1au's to impose duties on excise and to lew tax on sale of alcoholic liquor not for human consumption post the Constitution Amendment Act . It rvas notcrl that the express intent of the constitutional change madc vicle tl-tc Constitution Amendment Act was to tax alcohol under tl-rc GS'[ regimc except alcoholic liquor for human consurtption. Thus. alcol-rolic liquor not for human consumption or industrial :rlcohol or non potable alcohol would be subject to CST las s onlr r\ccording to the Allahabad High Court this uttcrtt h:rs^l-ree'tr cxpresscd through Section 174 (ll (i) of the U.P.(ioods :rncl Services Ta-x Act, 2O 17. Section 174 (11 (i) ol thc U. P.Good s :,ind Sen'ices Ta-r Act, 2O 17 reads as foilou.s:

¶697

" 174. (1) Soue as othenuise prouided in this^Act,r.trt urtd lrctnt tLrc dule oJ' cornmencement of this Act

¶698

lrl 'lhe Uttar Pradesh Value Added ?.Lr Acl. J0oli. t',rc r1rl ur respect of goods included in-Ertrg S-4- of the State l-ist ot th( se('en!h S clt t: <l t t lt: to t h e Constitution,

¶699

ttre lrcrehry repealed."

¶700

102.1 It u,as in that context Allahabarcl Hilih Cor-rrt lrt:lcl

¶701

lrs lollori's:

¶702

"61. Since the Stote Legislature did not cttlentltl lo -sot,c' Ih(' {^iVA'l'Act' to tax alcoholic liquor not for hurnrtn tun stt tttptiotl.^tLt'(' direcl conseqltences arise. First, a consequence orisc's ol^{ra<-<;qrtrtiort} of the clnrtqe in tlte Constitutional scherne , notetl r toLtt'. .Secottr/. llel tnore tlirectht, the State Legislaturc': did rtot sttt.,r'^{{ !!'',0','} O",^,,,, rrrrl;rrst, lrr-r⁽ⁿ¹ etTLl commoditg ex<x:1:t "a[cctltolk: li]ttot .l()r^ltLtnlon

¶703

¶704

conslunption". Hence, itt onA case, after the enac:lrncttt of the UPGfiT Act, 2017 and in absence of cutg amendment to Section 174 (l) (i) of tl1-clt Act, there neither suruiues nor e.rists cuiy delegoted power u.titlt the Slate Couenutrcnt, to issuc tltt' inpugned Notifi.aation, to impas€ UPIrAT on ENA.

¶705

We cannot help ouer emphasLse the .la1ct that the impugned NotiJication seeks to ouerreach thc Cottstitutionol scherte, as amended bA the 101"1 Constitution Anterrintertt- Bg thctt Const'itution Amendment, the only suruiuinq le.qislcttiue fietd to impo:;e taxes (saued exclusiuely uith the Stote l,egisleurres), frlds menhon in Dntry 54 (a,s substituted). Releuant to our cliscussion, it is onlg with resryCt to "alcoholic liquor for human c<,nsumption". Since ENA is not that, the State Legislature cannot cirtrnutent the Cotts, itutional schente l:q introducitg .l trt-1. o,? rt-s -sale, bg describing it a,s 'non-GST ctlcottol'.

¶706

102.2 In the ultimate analvsis, Alla'rralr;rd High Court while allorving the Writ Petitions declared thilt tl-rt: State had lost its legislat ive competence to enact lar,r,s to impose tax on sale of extra neu tral alcohol (trNA) upon coming rrrto c l'fect of the Constituti,;n Amendment Act. Thcrefore, thr at 1t nrpt to 1ev1,' tax on ENA post Constitution Amerrdment Act n:as ircirl to be ultra uires and irccordingly interfered n'ith.

¶707

103 The division ber-rcl'r of the Guj:u'at IIrqh Court in Reliance Industries Limited (2 supra) u,*r , rrin-lilring the challenge to the constitutional validity of Section B4A of the Gujarat Vrilue Added Ta-:l Act. 2003. The ch:.rllcrrrqr s as made on the ground that Section B-1 A n-as ultra uiri's ;r r tl Lrevond the legislative competence of the State under Entrr, 5-1 ,i{ List-ll of the VII Schedrrle to the Constit r-rt^jorr. Tl-re challenge u rn rnaric also on

¶708

7'7

¶709

the ground that Section 84 A u:rs^{manifestl-varbitrary and un-} reasonable and, therefore, violative of Article 14 of^the Constitution of India. In the^{present proceeding,learned counsel} for the petitioners had made it ven'^{c:lcarthat their challenge to} the Second Amendment Act is not on the^{ground of arbitrariness} or manifest arbitrariness; it is on the^{gror-rnd of lack of legislative} competence. Section 84 A of the^{Citqarat Value Added Tax Act,}

¶710

2003 is extracted as under:

¶711

"84A. Exclusiort^{ofpentx1irr s,,rrr.r'rt.ses} /J./^{NottulllstQttding} anAthing contained in thrs^Act, ori^{i.ssttt' ittt rt']ttcltt|rc Al)p{'llQte Aulhoitli or} tlw APpellate Tibunal or the Hlqlt^{(i.'itrl /ttrs.Jrr''('rtrrscler''isiortttthichis} prejudicial to the interesl of^re:Lrtrrrt. Irr^{.\r)//r.)oller ytroct:edirtgls QtLd an} appeal to the Appetlcte Tibututl^{ot ilLt lltrli' i.'t1t1 ot tlte SuPr(lnle Court} ogoinst sttch decision ofthe altltellatr'^{(li[!lr)iitlitllte ApP.'ll(l|e Tiburtal or} the High Court is pendhg, lltt'^{pertt).i r.,')/'riIlr('lrr'{'r'rrtlt..lat.'of tlPdecision} of the appellate authoity otld lllQt^oi ilit^{l!)pcl!Qt"'l'riburtulor tlte date of} decision of the AppelLate Tiburtnl turd lltttl^{ttl tlLt'tlicllt ('otlrt or tlrc dote of} the decision of the HiglL Co'1t1 .ttttl^{l]1.1t t)l Ilt(StiTrrcrtrt:(burt slTotLbe} excluded in computing the Tteriod^tu f^{et tu'tl tt)if l .s('( llr),? .J4or section.r'.5.}

¶712

(2) Nott ith,stattding^{(tttllllitqrrtrttQirtt'clttt tltis Act, ifanA} decision or order under secltort^7.1rrr -st'r'ltori^{/5 trttrolt'esan i.s.stte ott tuhich} the Reuision AuthoitA or Qppellote Qiltot-.tlt^{or llt lligll Courl has been} uen its dectsion utlLich is 7.trt:jrrrlicrrri^tr; llr{'^{rrla.a.sloJ reLletnteitl soile other} P ngs a on QPp.t(1 tl.., iln)i, CLrt,1 or tlLc.Sirj.,rirrre ftagQtn such decision of the Appeltote^{'t'ribtttrttl} or^{tlLe ]liqlt (oltrl is} Pending,^the peiod spent betueen the clote of Iit,' r/r'r^rsto'r ttf tlp^{,\l4tellote'filturtalond} the date of the decisiort of t11.. lhtt'tt^{t't)11t1 ot tlta dolc of tlrc d"cisiotl of the} High Court and the d\te of llv'^{r1i', t.srorr rri lht'SrtPrerrteCourlshaLlbe} excluded in computing the^{pcriod t)t} htttilttilott^{rc ferrecl ttt rtt sectron73 or} Section 75".

¶713

104 Guj arat High Cor,rrr iitrah'zed the^{provisionsof Article} 216-A of the Constitution of lnrlrrr^arndt ht^{citilnqe in Iir-rtry 54 of} List II, post the Cot-rstitutiorr Amcrldmetrt Act'^{ltmay be} mentioned that Section 8-1 i\ c:rrn e ro^{be adde d to tl-rc Gujarat}

¶714

¶715

Va-lue Adc cd Tiur Act. 2003 b-v virtue of the Gujarat Value Added Tax (Amr'r.rdmenti Ac:t, 2018 enacted on 03.04.2018 glving retrospective o1;eration lrom 01.04.2O06. Section 84 A provided for exclus orr of tl-rc periorl spent between the date of the decision of the Appellate Tribunzil and that of the High Court as well as the Supreme^(lourt in comptrting the period of limitation referred to in Section 7ii ol the saricl Act. Therefore, one of the questions which fell for consrrlc-ratiorl s as u'hether Section 84 A sf the Gujarat Value Acl,^{jecl j-ax} ,-\ct. 2003 r.r,as ultra uires and beyond the iegislativc competc'nce of thc State under Entry 54 of the List II of the VII ScheC trlr:. Aftcr rlrrc analysis Gujarat High Court held as follori's:

¶716

"t)1) 7'h, Ltttttl :i.l in list II in Schedule W of the Clorr;lilrrir(,rr rtt irrclitt u'rts ttntertdeal to extingutsh the power of Sl.rt is l() l,:r,ir ta-r|s^ orr salt: or purchase of goods except taxes orr lrt, srrlr.^,t,[ l.r't r,,l<,r r rtt products and alcoholic liqtor for humun <tn;sumpliort^'l'herefore, the power to amend ang law u;illi res'nr,,rl to li,t'u^(,J tl.y otl tlle sale or purcha-se of goods such as '-irrTiirt.l i..17,lr't 1,.-,ulcl bc saitl to haue been abolbtred u.tith llrr: ,{i-rr,'srrrd irrrrorrirrrt,nl it Entry 54 in List Il in Schedule VII of ll;t^{('r::1rlt,ti:tI} ttt lttdit.

¶717

91 llttuutrl t1tLttrr our eentest consideration to all the reletant ,sp{'ct-5'. el lhe ntatter, ute haue reached to the corrr/rr.:i,.,r !11 t ertt(1,. ).1(A of tle Con.stitution of Indio does not s(r,( s{ ('lr. rr .!4,1 r,/ !li, \tA'l'Act from being declared" inualid or ttllrr lir,,s i-s lolr.c/ ttboua, afticle 246A of the Constitution rr(1s ins, r.i,r.1 it -tt iii..: l0 )" Con stitution Amend.ment Act utith the solc t,r-rurir''r iir.r pri:ci.se object of subsurttirtg multiple indirect [o-y(] i cu,/ i(] r.,,1/r^, i\rt('Lur()tt pou)er lo the Porlia ntent and Sl(li,' l-.',r,::lG:i1r.(, :,) rrlu)o.se "goods arrcl seruices tax" itt ttct',;r,lt,ti,, tt illt iltL t,Cornrtrc:ndationS Of tlrc GOOdS and S('rl r( ('.i^',,r',( oirrrr.'r/ .:^tcrlrrle uncjer aflicle 279A of the ()rtn:;liltttt,':t tti lnrlrtt. TltL, rery etbject of sttch large scale refornt

¶718

ln9

¶719

luas to replece numl)L'r o.f trLdirect taxes being leuled bg the Llnion and the Stcte^{(.)ot:crnnrc:} rtt s and to remoue the cascading effect of ta,yes und J:roL,iclt' li;r ct cc.trnrnon ncLtional market for goods cLnd .t^eruice-s.^'l'his ts ctpparent from the statement of objects ctrrd rea.sor-s reft:retl lo by the Supreme Court in Mohit Minerctl Put. Ltd. [20 ] 81 58^(ls7R I lSC/ : l2O191 2^SCC 599.

¶720

Further sr:clion 1.3 to the Constitution Amendment Act prouides Jbr compensuliotl lt) the States for the loss of reuenue arising ort accotlnl ol tlLe irytlementation of the^goods and serzice-s ttt for a pcrkxl of .fiue yr:ars. Thus the entire^scheme of the Constitution Ante'rtr.lrntltt Act recogntzes^{impositionof onlg} "goods und -senrict:.s tux" Lurcler afiicle 246A of the Constitution of hdia. The plrcLst'^t lt(:^'qoods and seruices^{tax" is delined} under article 3(ttt Qa-\ tu) tit'en ang tax on supplg of^{goods or} seruic:e r.tr botlt excepl l(L{.r-s on^l.lrc supplll of alcoholic liquor for huntart corrstLnrt'ltiort. .!ric h sLtpply" cannot^be fragmented into dilferertt c()itj:)oncnt:; l)tl ll)t' Stete Legisloture^{and assume} poLuer to intpost utdt'1tt'r1rit'nl t(LY on the sale of^goods toithout refere:nu; to ll'tt:^(itxtLl:'; itrrl Seruices Tax Council.^Such Interprt:ttttiorr tuoukl be cottire4l to the entire scheme as^{u.tell as} the object errd purpo::r' ol thx Constitutton Amendment Act.^In Ject^{the prttr.,tsuttpro..:t,:litlit iitr cornpensationto the Statesfor} lhe loss o.l'ret,e.tttc dLl(' ta il!., cLoods and seruices tax utould ctlsct bc. ire:lettant il ih,' Slrrtc Leqislatures are independentlg enlporuerecl to etlocl sttlt's tr.t-t/ ualue odded tctx legislations^bg takin -cJ recourse to etliclc )l ttA of the Constitution^of India-

¶721

ln J'rrcl il l/?(' .si.rle Legislature has the^{power to} enoct tL(: ucLlue addt'ri lrr r latrs under anlicle 246A of the Con.stirulion of' htdto us rL,rlrrt:d on behalf of the State'^then Dntry 51 of l.ist ll o.l IitL Sct't nrh Schedule to the Constitution tulti<:h u,tts rrrrtin<:d lr llt('^(:,{let7t of six^products uhich^are outside tlle GST r,egurLa u;rLi be rewler-ed.-redaadqpi*-fue. lrcru fact^{that Entnl 51 q l)si llttJ tLLeSeuenthSchedule utas} re:lainecl in -so lar rts- ilr( .sr-\ rrotlttcts are concerned indicates lhat the 5als5 151,v/ rrltrL rtLitlttl tttx enactment is^{not permissible} under ttrticle 21(tA ol' :ltc'^{r i)r).slillrtion} of India. The^uociferous or(f1nrcti of lhe Stete ii)tr i)rlicle 246A of the Constitution can sttppotT the en{lcutlcni^!)t i)tt)ttisiorl urtder the^VAT Act falls Jlat in the J'al:e of the erisr,'rir,, oi Erttnl 5'1 of List II of the Seuenth Schedule to thc^{(lorr.srrlrrrt'ttt} ol htclia uhich sun-tiued the^lOls Corrslrluli,,r,.4tr,, irJrt, ' .r "'

¶722

105 Wc iu-e in ri-s1;cctfttl agreement with the^views expressed b.r' the single 1-,t'ni'ltcs of the Kerala High Court in Baiju AA (1O supra). Hindalco Industries Limited (3 supra), divisiorr

¶723

8i)

¶724

benches ol Allanabad High Court in M/s. Pankaj Advertising (16 supra|, Jain .Distillery Private Limited 14 supral and thc division bench of^tlr,rjar:rt I{igh Court in Reliance Industri,es Limited (2 supra). Not onll the Second Amendment Act cannot be traced to Articlc 24t't of tl're Constitution read with Entry 54 .:f List 1l ol the VII Schedrrle, the sarne cannot also be sustained as; a stand alone legislatrorr of thr: State under Articl e 246A of the^{(lonstitution} in thc abser,:c ,rf sirn ultaneous legislation by the Parliamer-rt

¶725

106 Lit rs now deal with Section 19 ol tht Constitution Amcndmt^'rt hcr. ri hich reads as under:

¶726

I o trt,i 1h star-rding anything in this Act, any provision of alv lan rclatinri to 1a\ or1 goods or services or on both in force in anr. Statc irrrrnccl rirerr- trcfore t]re cofilmencement of this Acl. rvhich is jllc()r)s st('nt rrith the provisions of the Constitution as amentk:cl Ix this..l.L t shrLil rlntjnue to be in force until amended or rc1;calcd b., a compe⁽ r.it I cgrslature or other competent authori:1. or untrl cripir-irlion o1 one year from such commencement, .",".hichcvr,-r is e.rt Iit r

¶727

107 St ct ion l 9 starts with a non-obstante <;lau sc . [t st s that not..i rtlrs;tarnding anything in the Constitutioi-r Arncndrnent Act, anv ir!'.)-isrorl of ar-ry law relating to tax on goods or scn'iccs or 0Ir lorh rlt force in arry State immecliziterir- bclbrc commen(;- rrrtnt ol- the Constitution Amendment Acr. s,hich is incortsisti rt^,r ii ir lite pr-ovisions Of the Constitutir:n ;,_-* .,.rnended b1' the Corstilittion Amendment Act shall continue to l.lc in forcc. until arnr rrlr:.{i !r repealed by a competent Legislirtlire or other

¶728

¶729

competent authoritv or until expiration of one .ear lrom sucl] com nlencement, s hichever is earlier.

¶730

108 Thus, the purpose of this provision is to^proviclc for^a s inrlos, or transition b-y suspending invaliditl' of inconsistctrt legislations existing immediately before commencement of the Constitr-rtion Amendment Act for a period of one -r'e:rr or till^srtch legislations are amended or repealed, whichever is eerrlier.^Tltc objcctive appears to be for a transition to the CST^{regimel>roltg]rt} into lorce bv the Constitution Amendment Act. All thert Sectiorr l!l cloes is to provide a period so as to eliminate or^{removc:rll laus} irrcorrsistcnt *-ith the GST regime within an outcr^{lrrrlitol- ollc} -e irr- pcriocl. Section 19 does not and cannot be construc(l to t'clipst: the amendrnents carried out in Entry 54 of List II to tlle^Vll Scht'rlr-rlc' or confer legislative competencc Lll)ol1 tlrt Stirtt' LeE{islatLlres for making amendments to the VAT Act in^resl)ect()f goo<ls other than the five petroleum products :rtrd alcohrll lor lrLrman consumption covered by the amended^{(substitr,rted) Entrr} 5-1 o[ Li st II .

¶731

10!) As erlready discussed above, corlsc(lllence^ol-

¶732

amendment of Entn, 54 of List II is denuding the S1.itt^{l,egislaturt-} c.rf tl're 1;o$ er to le-' tax on sale of goocls other thtltt those^:rs

¶733

¶734

provided^jn amended Entry 54; inva-lidation of State legislations existing a; on 16.09.2016 leq.ing tax on sale of goods other thal those finc ing place in amended Entry. 5.1. Sectiorr I 9 does not save or postpones deprivation or denuding of Icgislative competen le of State Legislature for ler,ying tax or r sale of goods other thal those mentioned in arnended (substitut,:d) Entrv 54 of List II. Sr:ction 19 only allows operation and lerl c,f ta-x r,rnder the VAT Act vrhich is inconsistent u,ith the GST regimt for a period of one year cr until the VAT Act is repealed or amended, rvhichever is earlier. This would mean that the State coulcl t ontinue to levy tax under the VAT Act for thc rvirrdori' period of on( 'cill-or till the VAT Act r,,as amended or repealcd to aligr-r it s'ith rirc C-; ST regime, u,hicheve' was earlier. This tratrsitional provision ,loris not e nable the State Legislature to make amendments to r ht: VAT Act in contraverrtion of the amended Entn- 5-1 of Lrst ll

¶735

I 1Cr At this stage, we mal reler to Arlir:li' )+3ZF of the Constitution. Part IXA deaiing with municipa-lities u as rnserted in t}-re Constitution by the Constitution (Sevcntt lour tlr Anicndment) Act, i9911 rvith effect from 01.06. i993. Articles .l.i.l P to Article 243 ZG romprises of Part lXA, all dcaling u'ith nrrr:ric'iprtlities. Bv the afr,resaid provisions rn r-rnicipalitics ;rrrrl nrr,rnicipal

¶736

li.1

¶737

administration were brought uncler tl-rc um brella of the Constitution. Article 243 ZF provides for corrtinuar-rcc of existing laws and municipalities. This provision is porz rnateria to Section 19 of the Constitution Amendmcnt Ac:t. Arti< le 2+3 ZF reads as

¶738

under:

¶739

243 ZF. Continuartce of' r'.ri.slirrg larus ctrtd Municipalities:- Notwithstartdiry artrltlrirtcl ttr tltis Part, anu prouision of any latu relatiru to Mttrticiprrlrt ies irt force it a State immediatelg before the cottntencenrett I oI tlte Conslituliort (Seuenty-fourth Amendment) Act. 1(){)). rllriclr is i/rconsislent with the prouisions of this Ptltl. sltctll t'ortttrtrte t() be tL force until,amended or repealed by a conrpt:lt,r Lt L<'clislctture or cttler competent authoity or untiL tltt: e.rlxrrtliLtn^{t ).1} on.' yettr frorn such commencement, whicheu<:r i,s <'ru licr:

¶740

Prouided that all the Murririlrtlitilr; er islirrrT irrtrrtt'diately before such commencemen f .shcll u)ntolu( till lhe c.rprration of their duration, unless sooner di.>^.-.^o/r.,r'r1 ltrl a rc'soltttion passed to that effect by the Legislatiue Assernlthl ol tltat State ctr, itt the case of o State hauing a Leglislat.iut' Oorortil. lttl ertch lnuse of the Legislahtre of that State.

¶741

111 As per this Article. notuillrslrrrrrlirrrl arr-r'thing in Part to IXA of the Constitutionr an_' provision of liuv rclating. municipalities in force in a St;rtt irrtmerliatelr. before commencement of the Constitr,rtion {Se'('n1\ fourth Amendment} AcL, 1992, which is inconsistent rvitlr l)irrt lXA. sharll continue to be in force until amended or rel)('.rlecl b-r' ,r conrpctent Legislature or other competent authorit. or until t'xpiratrotr of one vear from such commencement, rvhiclrr:r'er- i-s erir-litr

¶742

8-l

¶743

L12 ln Bondu Ramaswamy (6 supra|, Supreme Court was considerirrg challenge to acquisition of land for formation of Arkavathi La-yotrt on the outskirts of Bangalore city by the Bangalore Development Authority under the Bangalore Development Authorit,r, Act, 1976. It vvas in that context Supreme Court considered the question as to whether provisions of the Bangalore Development Ar-rthoritv Act, 1976, more particularly, that of Section 15 dealing with the power of the authorit5r to draw up scherles fol deveiopn-rent o[ Bangalore Metropolitan area became i,roperative, r,oid or rvas impliedly repealed by virtue of Part IXA of the ConstitLrtion. Supreme Court held that Article 243 ZF is a provision en:rblirrg ctrntinuance of any provision of law relating to rnun icip:rlitics in spite of such provision being inconsistr:nt with tllc provisions of Part IXA of the Constitution for a specifir:d pcriorl ol olrc -'c:tr or until amended or repealed, whichevcr is e:rrlicr. Ir u':is helcl as follor,r,s:

¶744

'A'rv rjtiilutc or pro|isir.rrr rhereol which is inconsistent with any consti utionai provrsloD rvill be struck do$"n by courts. Consequently, if BDA f,ct or anv r)rovision of the IIDA Act is found to b€ inconsistent with ar.r] ir o'isrorr ol l'art l,\f (,1 th(. (]oltstitution, it $'ill be struck down by courts;1s vloiiltt(,,)l tht'lli)ltslrtutlolt_ ln regard to any provision of any larr, rtlatirr$ to r uni.ipalirrt,s. Alticle 2432F suspends such invalidity or postp(,ncs tl)r- rr't.riirirt, l,:rr' .r pt.r iorl oI onc year lrom 1.6.1993 to enable the crrmp.lcDt l,r'gislrr'rur. t,) rcllo.c the inconsistenc5 by amending or rcpealrne slr( lr I....'rcl.rlinq to nt rr rt rciltirlities to bring it in consonance ^tth the pr^'isrol]s oi I',irt l/\ ()i 1hl' L-rrn<llllrtion."

¶745

ti5

¶746

113 As has been held b1' the Supreme Court, Article 243 ZF suspends such invaliditv or postpones the invalidity for^a period of one vear to enable the cornpetent Legislature to remove the inconsistenc_r" bv amending or repealing such law relating^to municipalities to bring it in consonance with the^provisions of Part IXA of the Constrl ut iun.

¶747

L14 On the abovc an:rh sis s'e have no hesitation in holding that Sectior-r 19 of the Constitutiot-t Amendment Act cannot^be understood or canrlot bc construcd as a source of^legislative power. lt is also not a savurq pror-isiotr in respect of suspending legislative compctence to amtt-rcl thc VAT Act. This aspect^was gone into br' the G^{r-r jrrrat} H igh Court in Reliance Industries Limited (2 supra) ',r'herein it l.tas been held as follows:

¶748

79.5. Scction L() ol iht Constitution (One Hundred ---*^{and-Eirst) Amendrnent AcL. 2O16 cal also-nolbe-a-source-of} powcr to amend thc Statc VA1' lau,s. First, the power to amcnd ttnrlcr Scctiort I^(l is otrh' lirr a^period of one^year from the commcttccrncnt of tht ,,\tn('tr(inlr.-nt Act.

¶749

115 Evt'n in Sheen Golden Jewels (India| Rrt. Limited⁽⁷

¶750

supra) relied trpon b-r tlre^S1:rtr'. lctilrrecl single^{judge of the Kerala}

¶751

High Cor-rrt irelrl as foilou^s

¶752

l]1 ,rrr I(,r Lrs (,:ln)r'( i,,,1lr s(⁽ tlorr l() of the cA Act anri Sec:trrrn l; i ,,t llr(' hSCSI :\r' :1, ,.,r, :^, Itr.rttdillcs that anv inconsistent liru r-t'i:rrinq 1,) liL,)rr rir;oris .rr i ','r'r^,'sr!1 ,i)rce in anl' State^bclor(l l6.orl.-l{,1r) lrlrc.o;urDeDc(,r:r('rri ,rti ,⁽ i i, llsh.tll contilluetobe in forc. ''rrlltil iifir,'r,l, rl ',r' r'r:l)r:alt-rl lrr .r ,,rrr,,:, r,r I.,'gisl.lture or other comp(ltent ;illtjlijal]". :i,) tlrr. Sril1.'s \r'r,'. in:ir r,-,t1rjri,l 1,) atrlcn(l tlte inconsistenl

¶753

¶754

lau,s t(, brir)g rhern in harmonJ' with the CA Act. Otheruise, the States must rsllcal titel]:. And the] were given one year for achieving this. If the States lr) rrr.itlr.r, tlrosc inconsistent acts stand repealed-

¶755

1.1 2. I lcre. thc States acted; they amended a fer.,, ilconsistent Acts,^'l her also repealed a few more. As with the I(VAT Act, the rcpeai, if it \erc. I as rt()t |csulted in its abrogation or annihilation. So the operation of the so c;rlllcl srinsct clause (as provided in Section 19) has not denudcd the Srirle s p(,\ er to enforce the KVAT Act in its amended form- The Act remaired, ,.r'illr its remit reduced, though. Thus goes out oI reckoning the p.'titiorrers ilrlothcr asscrtion: that wi[h the repeal of the enactments. thc procedural mcchanisn.r has disappeared. It has not, The prospectivrn ol the anrr.ndmcnr undisputed, what remains to 6e examined is the State,s Ix)\,er^{to savt u,trat} had^happened belore the CA Act came into force or. r.nore precisell . until one ycar alter that Act came into force. tndeed, the CA Ar r ,ril|rr cd lhc Stare Acts in the same legislative field to coexist for one -citf. t trj ,,r |)trli,$ ltt.riotl.

¶756

l1.i So ltlrust trold that Section 19 of theCAAct is- trausitioDal as r'L r r.,\ ir.r',. i.,ecrr-.ir repcaling clause simpliciter, not a saving cla{rse 'Nothir ! rL!rr. l'lrat .iob of saving is done by Section 174 of rne KS()ST Act Well anrl rrlrl'. So the repeal las i1-bt,^-qs-Sectl-on 174 elaborates, allccted -th. pr .\ i.r r s r)])erarion of the amended Acts oi iepeatea Acts and orders or arr_\1hinq cirri.. tlorre or suffered thereunder." In other words, the rcpeal has not al ecte,i^-arrr right, privilege, obligation, or liability acquired, accrrrctl or^jucrrr rt'rl r-rrrrlt'r the amended Acts or repealg{. Acts or orders undcr sltch rr'1re.,l^.ri ,,r .r:rrlrIrIr:,cl Acts." Nor has it affected "anJ' tir-, sur-r:h,rlqc_ pcrralt,,. 1r;r,r. rrrt.rcst as are due or may become due or anv lbrfeiturc or lltrrisirni,;rr^rllrrlrr('(l oI inflicted in respiect of an1, offcn,:e or vroi:rtrr:tr ( ()nrirt 1','il ,,r, ,rrr.it lltc yrrovisions ofthe amended Acts or rcliealed A(.ts'.

¶757

L 16 Tl-rus. according to the Kerala High Court, Section 19 of the Constittrtion Amendment Act is a transitional provision. It is not .i s.r\ ing clause. States were required to amerrd tltc inconsistent 1.1\s to bring them in harmony with the Constitutiorl Amenclment Acr. If that was not done, then the States ri.erc required lo r1.irc.1l sllch inconsistent laws. For this a s.indor,r pel'iod o on(' -\ ( ar \vas given. If the States dicl neitlter. thosc inconsisl cnl l.tu s n ould then automatically stanci repealecl.

¶758

¶759

tt7 'l'herelore, lrom the above analysis u'e can safelr conclucic thzrt Section l9 of the Constitution Amendment Act is not a s()urcc of pou,er to enabie the State Legislature to cnact thc Second Amendment Act, which is clearly inconsistcnt u'itl-r tl-rc Con stitr rtic-rn Amendment Act.

¶760

118 Wc have already noted that the Consriturion Anrcnrlrncnt Act, more particularly Sections 1 to 1 1 and l3 to 20, t:irrnt- irrlo lorcc on and from 16.O9.2076. Therealter I'arlianrent t'rrirt:te rl tlre CCST Act and other related enactment s, most pnrr isions of strch enactments having come into lirrcc on an<l 1l-orrr O I^()7.1017. State ol Telangana also enactcd the T(iSl' Act \Ihilr nrirloritv of the sections came into force on 22.06.2017, Scctior-r 1 7-1 ol the TGST Act which provides lor repeal and savir-rg c?1orc into krrce on and from Ol.O7.2Ol7. Section 17.1 of thc T(}ST -\r't r-t::rris :r s unrier:

¶761

'' 17.1. llepeal Attd Sauing:- (1) Saue as othentise prctuided it llrr.s,Ar't. orr artd from the date of commencemeri of this Ar.:t.

¶762

(i) The Tektngana Value Added Tax Act, 2O05 (Act 5 of 2O05): except in respect of goods included irt the Etttttl 54 of lhe State List of the Seuenth Sclecluk: to tlte (i]rr stilu lion,

¶763

{ii) T-he Telangana Entertainments Tax Act, 1939 (Act X o_f 1e39);

¶764

ItLr t The^'felangcuta Tat ort Entry of Motor Vehi<'les irttct Local ,'1n-a.s ,4cl. 1996 (Act 26 of 1996);

¶765

8li

¶766

(iu)^'I'he Telangana Tax on Entry of Goods into l.ocal Areas t ct, 2OO1 (Act 39 of 20O1);

¶767

(u) 'l'he Telangana Tax on Luxuries Ac4 1987 (Act 24 of 1987);

¶768

(ui) 1'he Telangana Horse Racing and Betting Ttt-r Regulations. i358F (Regulation XLD{ of 1358F);

¶769

(uii) 1'he Telangana Rural Deuelopmertt Cess Act, 1996 (Act 11 c'f 1996N fiereafter referred to as the repeale:d Acts) are lLerebu repealed.

¶770

(2) The repeal of the said Acfs artd tlrc antendnteru o.f the Acts specilied in section 173 (hereafter refened tr. as^".suc/r amenCment" or "amended Act", as the case meu be) to the extenl menlioned in sub-section (1) or secliorr I 73 slnll not-

¶771

(a) reuiue anythittg not in fon:e or existittg ut tfu: :.irrc ol such amrmdment or repr:al; or

¶772

(b) tffect t\e previous operatiort of the amended Acts or repec.led Acts and orders or anythitgl rl ulg done or su ff<'red there tnder; or

¶773

(c) affect ong right, piuilege, obligcttion, or liabiltttl ttcrytired, accrued or inanned under the amerrcled Acts or rcpealed Acts or onlers under such repealed or atnertd.ed Acts:

¶774

Prouided that ang tax exemption grantted as^qn irtct:rttiue ogaitst inuestment through a notificatiort shall nol cottlittttc rt.s piuilege if the said notificatiott is rescinded on or after the appointed dag; or

¶775

(d) ,tffect anA tax, surcharge, penaltly. fitte. ir ere:;t a:; ttre due or tn,aA become due or any forfeiture or ptLrtislurrcr I i t'r lrt'tl or itJTicted in respect of ang offence or uiolcttiort comntittecl ogrrirrsl the p, iouisiois of the aiiended Acts or repealed Acts. or

¶776

(e) c{fect ang inuestigation, itquiry, ueriJicotion (trtrluclitg sctut irty and audit), assessrr.erl, proceedings, adjudictttiort tutd any cther legal proceedings or recouery of offears or rentedq it resp?ct of any such tax, surcharge, penctlty, J rc, interest. irlltt, priuitege, obligation, liability, forfeiture: or puri.sltntt:nl. a-s aforcsaid, and ang sttch iwestigatiort, itquiry. t', nllt utiott (hrclrtding scnttiny antd audit). ass(,.ssril€nI prctc<'t rlin qs. adjdication and other legal proceeditTgs or recouery tf- rtrr c'rrrs or rernedg may be itstituted , corttirtuerl or enfor<:ed., cu ttl r uty

¶777

lt9

¶778

such tax, surcharge, pendltA, rttrc. inlerc-st. for.feiture or purtishment maA be leuied or inrposed rrs if llie.>^e Acts ltnd not been so amended or repealed;

¶779

(fl alfect any proceedings itclttdirtgl tLtctt relatitg to cut appeaL reuision, reuieu.t or reference, instirrrred bt _fort,. ott or after the appointed day under the said amerrclecl AcIs or repealed Acts and such proceedings shall be corrtittrterl uruler tlte said amended Acts or repealed Acts .rs if tltis Act lrcrl rrot r.ome into force^{and the said Acts had not been arnetvlerlor rt pealed.}

¶780

(3) The mention of the partianlar tnatters reft'rrer1 to itl sectiotl 173 and sub-section (1) shall not lte ltetk.l to ltre.jttrlice or affe-ct the general applicatiotl of section S. 8.4, 1r rtrtrl 19 of the Telangana General Clauses Act, l89l (Act I ol- 1891) tuith regard to the effect of repeal".

¶781

119 Thus, as per Section I7.+ (I) (r) thr, 'r\T Act stood repealed with effect from 0l .O7 .2017 ('\c( l)l l t'(.sPect of goods included in Entry 54 of the State l-rst in tlrt' Suventlr Schedule. When we refer to Entry 54 of the Statt I-ist i.L'., List ll it means the entry as it stood on 01.07.2017. \'r' hrrie :rlicLclv noticed that post the Constitution Amendment Act. [']ntrr'5.] ol List [[ has been substituted whereafttr the field of lcgislrLtion r.rnclt'r the said entry is confined only to taxes on thc sale ol' 1;etr-o)clrm crude, high speed diesel, motor spirit (petrol), natLrr:rl qrrs. :Lvi:rtion turbine fr-rel and alcoholic liquor lor hLlnr;rrr constrrnption; further claril-ving that this would not int:ltrrlt sirlr' ol srrch goocis in the course ol inter-State trade or comnrcr('c^()r s:rl(- irr tl-rc course of In ir)ternational trade or commerct' o1' sr[:]r qr)ods.^'l'hcrefore, tcrnrs ol Section 174 (1) (ii ol the l'(is l A('1. thc VA'l' Act stoocl

¶782

9t,

¶783

repea-led \1'1th effect from o1.o7 .20t7

¶784

except ir. respect of tire goods covered by the amended (establish,:d) trntry 54 ol List II

¶785

120 A-s a matter o[ fa.ct, we may observe that the very presence of Section 174 (ll (i) in the TGST Act buttresses the stand taken by the petitioncrs

¶786

141 ln Sheen Golden Jewels (India) hrt. Limited (7 sqp'ra) tl:e rlur:stion };r'iort' tlrl single bcnch of the Kerala High Court was '"i,hether- tirc Sttrtc hacl the legislative competence to enact Se(rtiort 171 of thc Kcrala Goods and Services Tax Act,2Ol7 and save the past tir-\i-LLi()n events u'hen Entry 54 List II stood omitted perrnancntl-\ u rllr r.lfcr:t from 16.O9.2O1.6. We may mention that Section 17-1 of tlre lr.er:rla Goods and Services Tax Act, 2Ol7 is pori rnLttt,tia t() SL-clion 174 of the TGST Act. The Court was called r-rpr.rn ro cxarnine constitutional validity of Section l7-+ ol thc lierirlir⁽ ioocls illrd Services T:x Act, 2Ol7 oo the anvil of Section l.l of tl'rt: Clr-rrrstitr-ttion Amendment Act. It was contend<'d that Stal r' hi tri no lcgislative po{'er to over ride Section 19. Kerala Hiqlr C,rrrrt 1oo]< thc vrcu, that while Section 19 is a transitio nal provisiorr: thc jolr of saving is clone bv Section 174. Though Seclion l 7-1 )rrrs rept zrJecl the Kerala Valur: Added Tax Act,

¶787

()l

¶788

2003, the repeal has r-rot aflected the previous operation of the repealed act. In other u'ords, tl-rc repeal has not affected any OIright, privilege, t>blieation liirbili$' acquired, accrued or incurred under thc repe:rled act. [r-r the above back drop, single trench of the Ke ralzL I I is]r^(lourt rr'^jectcd the contention that the State lacked the competcnce^1o cr-rgraft Section 174 into^the Kerala Goods and Serviccs^'l'rt-r ,\ct, 201 7 and accordingly upheld constitutional virlicl itv of^Sc'ct iort^{I 7 i}

¶789

t22 We see no conf'lict or contradiction between Section 19 of the Constitutiorr Amenrlmt'nt .'( l and Section 174 of the TGST Act. While Section 19 lras clt'lerri'cl invalidity of inconsistent legislations till sucl'r tirnc those .u⁽ ilrlrended or repealed or for a period of one vear rvhichevcr is eat-lier. Seclion 174 of the TGST Act has repealcd ?tmonsst otht't- t'l'titctmcnts the VAT Act with effect from 0 t .O7.2O¹ 7 cxceJ;t in t-r'spt'ct of^goods covered by the substituted Entrr 5-l of List II.^'l'h rrs Se'ction 174 of the TGST Act is in consonancc u ith Se't:tion I() oI tlrc' Constitution Amendment Act. The above position onl-r sul)l)i)r ts the case of the^petitioners that the State sas dcnucled of ils ,'onrpr:tcnce to legislate on GST after 16.09.2016 arrd ct:rtainlv rlttr-^{() 1 .O7} .'2O17^.

¶790

¶791

Rcpezrl ol arr er-ractment would mean that such an enactrnent is e'i:rsed frori the statute book; it would rro lr.rnger be in existence. This aspect uras gone into by the Gul arat High Court in Reliance Industries Limited (2 supra). It has; been held zrs

¶792

follou's:

¶793

''63.r' ffet1 of re1rcal at common lana-Repeal obliterates tlte slotl^(, a.s ir it has neuer been enacted:

¶794

68.,^(lrt,'lt:r tlu' corntton lau.t, a statute afier its repeal is conll.lleteltl oltliteratecl as if it has neuer been enacted, except a-s l.r I/le lr-,i,1.sfl( Iior?.s past and closed.

¶795

68.11 Clolt:s otl Statue Law, Vn Edttian, at poges 411-412 sl(rle^j rhd Tntrciple as urtder:

¶796

"Wl,crt ctn ,\ct o.f Parliament is repealed, said Lord Tenterdcn Itt Sl,trer:.s r,. 1-1lisorr 1829 9 (B&C) 75O,752;7 L.J,K.B. 335 it rrrrrsl l.re cr., r r-s ir,k:ri,r/ (except as to transactions post and closecl) as if [t lruri rrt t't'r cristed. That is the general rule'. T tdal C. ,/. ,st.?te.s ;/ri, r,rcr,plion more toidelg. He sags (in Ka11 u. {}ooautin lrlANltt INO'|/ O0O1/ 183O : 183O 6 uing 576 ; I Ll CP 21)), TlLc el'1,:ct of repealing a stahtte i-s to obliterate it crs cotttl-'letel!! .tt'otn tlr: records of tLe Parliament as if it had rteuer becrr ;:rrss,,c/; utrl it rnust be considered as a lanu that netter e-:i.st.rd ,?\ccpt .lor tlrc purpose of tlwse action which tl'ere corrrr'tenc:crl . ltrosecuted and concluded whilst it uns art existittg kut,..'

¶797

63.) llertttio:t on Saturday lnterpretation, 6th Editton, at page 276 :.r;tlctrns tlLe t,[fect of repeal as under:

¶798

" L.l.ft'tl oI r,:lx al:

¶799

4l rrlui:,r:r ioii 1l.,.,1 n,1,tcctl of an Act makes it as if it l'trtcl ttcittt f211,, 1:1s', t)i t). | ) /7)(, er.s post ond closed,....

¶800

i i , t -. , . i , : : i ' ;^. r , , .r .r',' l1lt,r tlrc repeal in purytortt,tl r,\€,f ! r../,:,'^jr is1,,1 ,il ,i 1 : . t-,,1 tij{iiitLl."

¶801

t,(^.r .1 -,, , i,,,, lir,irr./t of the Supreme Court^itt iltt't-u;,,rt; 6r'.,1 11,1;,, .: ' ; .r ;.. , ll.rrort u. Stete ,:,.1 l:;t)|1 . t:t.

¶802

9:l

¶803

MANU/SC:/0020/1951 : AIR 1951 SC 128 referred to a passage fronL the Crauford's book on Statutory Construcliort uthich reads as under:

¶804

''11 i.s rr,<,i 1 settled thot if a statute giuing a special rernedy is repealerl ttitlnul. a sauing clause in fauour of pending srzits all suil.s rnr{sl stop uhere the repeal finds them. If final relief hcts not beert qrartted. before the repeal Luent into effect, it cartnot be after. tf a crr.se is appealed, and pending the appeal the lau., is clmnqerl, the appellate court must dispose of the case under lhe luu., irt .force tuhen its decision was rendered. The effect o.f the reltetrl is to obliterate the statute repealed as completely cts if it lrctcl rtct,er existed, except for the purposes of those .r.rion-s or .srr it-s tt,lriclt utere commenced, prosecuted and cortcluclecl rlhile it u,rr.^ .rr1 existing law. Pending^judicial prc:<:t'r:dirt91s Itaserl ul.torr e statute cannot proceed after its repeal. l'hi.s nrk: lrtlrls trrtc ttrrtil the proceedings haue reached a finctl^jutlgrru:rtt in lltr: t'ortr1 of last resort, for that court, when it cornes to .uurour('(' ir.s clecision, conforms it to the laut then existirtg, ctrtrl rrtay tltt:re.ft:re. reuerse a judgment uthich wos con'ect u,hert prortortrtcrtl irr tlrc sttbordinate tribunal from u.thich tuhence tlrc a14x'rtl tt'trs takery if it appears that pending the rtppea! ct -strf^{tul{, rllrrclr rr.ras necessary to supportthe judgrrtent ctf tlrc} Iouter cotrrl lr.:.s been withdrawn by on absolute repeol.' Q:6OI)

¶805

(emphcLsis st L 1 4tl ie cl )

¶806

65.5 .,/rr.sti<'r, G.P.Singh in his Pinciples of StatutonJ h Lte4trt,l crl i<tt t. 12n, Editiort, 201O, while exarnirtirtcl tlrc (.on-sequ (,n (.(,.s o.f repeal has stated as follolus (at page 695):

¶807

''Llrtd<,r llrc cornrnon laut ntle the consequences of relx:al of a -sr.rttll(, erc u(.ryJ clraslic. Except as to transactiorts lr(.st or.7 c/rl.ser/. rr .statlrle after its repeal is as completely obliteratecl cts i.l' it lurd rtcuer been enacted. The effect is to destroq alL irt'lu.trtte iglts arrl cr1l cnuses of action that mag lvrue rtriscrL urttl<'r tlte rept,aled stcttltte. Therefore, leauing asir/e llte crr-sr:-s rL'ltere 1trocecd L-t1s were cotnmenced, proseatted cutd brotLc1ltt to tr.lrrtalitrt before the repeal no proceeding under tlu: rept'rtlecl -srarlrt(,^{can lx' tontrnenced or continuedafter the rept,ttl.'}

¶808

63.6 l'lttt^(4)ex coutl in Mohan Raj u. Dimbesu;ari .Snikia, M.\NL|/ S(:/ ti64 I / 2006 : AIR 2OO7 SC 232, has quoterl the abttut, ltrtssttcy:, utith approuctl in paragraph 23 uhiclt is cytoted belor L':

¶809

¶810

"23. It i.s tl-otD uell settled that such Repeelitlg Act sl:.ctll be constr ted to haue not taken anaay the accnted ight of tt persor.. In G.P.Singh's Pinciples of Statutory hTtetpretation, (1Ottr Edn.) 2006 at page 631, it is stated:

¶811

"Under the common laut rule the conseqtterzce-s o,f repeal of a stcttute ate uery drastic. Except as to transactiorts past artd closed, a statute afrer its repeal is as completely obl,iterated as if it had neuer been enacted. The effect is to destrog ail inchoa te ights and all causes of actiort that ntay lrctue iserr under the repealed statute. Tlerefore, leauing aside the cases uhere proceedings were ammenced, prosecuted and brought to a firnlitg before the repeal, no proceeding urtder ti'Le repealed statute cant be commenced or continued ctfter tlrc repeal'.''

¶812

68.7 The aforesaid principle is reiteratecl irr tlre^{(lonsliluliori} Berrch decision of the Supreme Court in lhe crzsc Ltf Kolhapur Canesugar Works Ltd. u. Union of htdia MANLI/ SC^/ C060i )OOo : [200r)] 1 19 ELT (Sc).

¶813

68.8 Thus, at common low, a stafitte become r?on-exisferul o,l its repeal, unless saved by some sauing prouisktn."

¶814

121 Question^{which therefore follo\l's ts s,her-herri rcpcaled} act can bc amended? Or to put it a little difft:rentl. ciut a repealeri act be saved by the General Clause s Act, lB97 or b.r'the Telangana General Clauses Act, 189 1?

¶815

125 Much reliance has been placed b1 the le:rrned Advocate^rieneral on Sections 8 and 8A of tl-re Telangal:i (lttreral Clattses A:t, 1891 in support of his contentior-r that desplrc r.c.pearl ol the VAT Act, the State had the competcncc, firstl-r', ro prcmulgale the Ordinance and seconCl-r', to ellercrt tht' St'c rtnd Amendment Act. According to Section 8. u'here anr- Act rt pcals

¶816

¶817

an,y other enactment, then the repeal shall not clTcct anvthing done or any offence committed or anv fine or pcnarltl incurrcd or trnl' proceeding taken before commencement of tl-re rcpealing Act; or reviving anything not in force or existins :rt the time u hen the repeal takes effect; or affect the previous operation ol any ('nactment so repealed or an-\rthing dlrl-r' rlonc or srri'ltrcrl under .rny enactment so repealed; or affect itn- r-reht, privilege, o bligation or liability acquired, accrucrl or- irrcL rrrc<l unrler any cnactment so repealed; or affect any fir-re , pcr-ral1-r. forieitr-rre etc, incurred in respect of any oflence cornmittccl i-rncle r any tnactrnent so repealed; or aflect alrI \ irricsiiqirtiorr. legal p rocccding or remedy ln respect of anr such riglrt. privilcge, obligation, liability, fine, penaltv, forfeitr-rrt' or' prrnishnrt'nt and an,1' such investigation, legai proceecling or rt'rncrl_r' ma_v be instittrted;'-corrtirrue*-or^' enforced ancl anv srrch lirre. penalfi'; ftrrfeiture or punishment may be imposecl irs r[ 1lr,' r't p<,aling Act lrrrcl not been passed.

¶818

I 2tr Section 8 of the Telalglrna^(iencr:rl Cll:rrrst's Act, 189 I is similar to Section 6 of the General ClaLisrs Ar:t. l8()7

¶819

)'27 Section 8 A of the Telang:rrr:r^{()cnt'r'al ('lar-rses} Act, 189 1 sa1-s that where any act repeals anl cn.rctment lrr rrfiich the

¶820

¶821

text of a ny previous enactment was amende d by express omission, insertion or substitution of any matter then unless a different intention appeers, thc repeal shall not a-ffect continuarrce of aly sur:h zrmendment made bl the enactment so repealed and in operatior-r at the time of such repeal.

¶822

128 Article 367 of the Constitution of India speaks about the interpretation of the Constitution of India. Clause (I) of Article 367 is rr:ler,arrt. lt savs th.lt unless the context otherwise requires, the General Clauses Act, 1897, sttbject to any adaptatio:rs ancl modification s that mav be made therein under Article 372, shzrll applr. for the interpretation of the Constitution as it apples for the^{'interprctalion} of an Act of the Legislature.

¶823

t29 Guj:rrat llieh^(lour-t in Reliance Industries Limited (2 supra) e;<amine:cl this ;rspect as s"ell ancl held that General Clauses Act, 1897 a1;1>lies onl-1' lor interpretation of the Constitution br.rt in rcspccl o[ othcr matters, such as, savings in the case of repeal etc s'hrch arc unrelated to int€:rpretation may not appllz b,y virtr-re of Article 367. Section 6 of the General Clauses Act, 1tt!i7 or Sc.crior.rs B/BA of the Telangana General Ciauses r\ct, 18t) I u'orrld ;rppl-r' onll to repeal of an enactment. A Constitulion Aln<,'nclnrenr r\r:t is rrot or cainnot ltr: tcrmed as an

¶824

¶825

enactment. Therefore. bt-r'ond u'l'rat is stated in Clause (l) of Article 367 of the Constittttion, provisions of the General Clauses Act, either the Ct-'r-rtrirl Act or thc Stzltc Act, u'ould not apply to the Constitution, includir-rg the Constitlttion Amendment Act since a Constitution Amentlnrcnl Ac:t is mirck' bv the Parliamentⁱⁿ exercise of its sor,ereign po\'ers trndcr Article 368 of the Constitution. lt has bet:n hclrl as Ibllou's

¶826

Applicability of thr'^(icucral Clauscs Act. 1897^lor the^{interpretation} of the Constituti<>n:

¶827

7l.l Article 367(1) of tlre^{('onstitrrtiorr} stirlcs th:rt the General Clauses Act, 1897 (subjcct to lhc ilditl)taliotts atrd mrtclification^{made under} article 372) shall apph for tirt' itrtcrlrt^('tiit iorl of^I he Constitution. The relevant exlract ts:rs utrrlet

¶828

"367. Interpretarion. {l) Llnless tlr('^('rrIIte\t othcrwise requires, the Generarl Clnrrscs -'\t't, l8()7, slritll, sultject to any adaptations and rrocli[<'atiorr s^I h:rl mar- be made therein under articlc 37J. irppiv lbr tht' uItcrpret.ltion of this Constitution as it a1;plics lirr thc intt'r Prelation of an Act of the kgislature of tlte Domitriotr oI ltrcltit

¶829

71.2 Thus, the^(icrrcral Clirust'Act rtpplit's^{onlv for the interpretation} 6f^{-Cons-titiltion.} The Ceneral Clalrses .{ct deflnes various-tefms-insection 3. Thesc rlcfinitions u'ill irpPh lirr thc interpretation when these words are t'mplovcd itr thc^{('ottsritution. Apart fromthe} defrnition, section l6^(lx)\'cr 1o a1;point to ittclttdc l)o1ver to suspend or dismiss), section 2I {l)owcr to rsstlc to itrclude^{power to} add^to, amend, vary or rescintl notilttlttiort.^{,rrtl,. r's. ltttlcs or byeJaws),etc.,} which are general rules^()l c()nstrtr(li()u irtrrl^{rr,hich are} otherwiseⁱⁿ accord with ltre cornrnon lau ttt:rv also^{.r1rph'for the interpretatiooof} the Constitutiorl.

¶830

71.3 Thercfore, Perlr:rPs, tlrc olhcr Inirlt(^r's sttclt as the^{savings in the} case of repcal (scction lr), rtriviti oi^tt irt'.rl^{urrilctnlcnts(section7),} construction of rt'lerctrtcs to tll(: r('l)cill.{l^{el)ltclmcnts(section8),} continuatior.t o[ trrrltr issttcd ttnclcr^I l]e^{r ( p('al('(l} altactment and^re- enacted^(section l-ll. t'tc.. \'hit'h rtre^{rtot t,lr1r'<l l() illterpretationmay} not applv bv virLLtt- of rrrticlc 3(r7.

¶831

¶832

7 1.4 F"rrthcr, section 6 applies only to repeal of an enactment. En:rctn t:rrt is delined under section 3(19) of the General Clauses Act to incl udc regulation or zrny provision contained in arry Act or regulat ()n. Horr.ever, Constitution is not an enactment.^'fhe Constjtution is su1:rerne :rnd is, in fact, the foundatjon of ali the enactnr c.nt.^'lhis has l:een observed by the Law Com:nission in its 60th Rrport on the Gencral Clauses Act 1897 in the context of scction 8 {ccin ;tru ctior-r of refcrences of repealed enactment). The relevant extract of tbc reporl. is as under:

¶833

" l . ilo tilfect of section 8 on article 367.-Will section 8 of the (ierrr:ral ()lauscs Act, which provides that \ihen an enactment is^-t'pealed and rc-enacted, references to the old enactment rvil irc constrlrt'd as rcferences to that, re-enacted one, makc irir. cljlli rrncc.) \''c rlo rrot think so. it should be not,:d that the urrris rLrrlcss tllc colttcxt otherwise requires' (in article 367) rr,..r1r tll.rt thr'^(ir.rreral Clauses Act, section 8, is to be trr Irrrl,'rl Lr c-r lrl its tcrms, section 8 of the General Clatrses .\r^' rr ill r)()t al)l)l\ to thc Constitution, because expressron '('r'!actm( nt rrvhrch ocr:urs in section 8) would not take in the ( o rslilulion. i.hiclr rs not arl 'enactment. ftE Constitution is su ).(,n( anrl is, in lact, t.l.e foundation of all,enactments. "

¶834

7l.J il.rrrs. s,.:cti,.rn^(r of the General Clauses Act 1897^qill not applv to tlre^(lr rst^jtrtriorr i( ortrirn r.'ieu, taken by the Allahabad High Court in thc , . sr: ri F:uz;urrl r,. I,loh:rn Singh, MANU/UP/OO18/ 1968 : AIR l(t(r8 \ll b7 i7 l). llorve\cr. no reasoninB has treen given to ailph' se('ti()r) t) of the tierrcrirl Clauses Act, 1897 to the Constitution).

¶835

71 .0^"h, aLor r' prinr:iplc about the non-applicability of the Gencrai (llaus,rs Act. ltl()7 is relevant and applicable even to thc Consi trrtiontJ Arnt:ndnrent Acts as they afe made by the Parliamenr in err rirse rf its trrrrstitucrlt powers under article 368 and not in c'reriis. of rrorrn;rl Icgislative powers undet article 245 of the Consl lt Ll t roll

¶836

71.7^"hc qrr(.sIion irs to lvhether section 6 applies to the Constitution is rcllr iirrt 1o rlett'r minc u hether after the repeal of the entry in thc lcgislltilc L1st. tlrc lrrrvs m:rde in pursuance of such legislativc porvers c;ur bc save d. That provision has pre-seRtff been maale under section 19 ol thc^{(lonstirutiolr} {One Hundred and First) Arnendmellt Act, 20l1).^'l'ltlls c{)n-tc..luiJlv also section 6 will not appl1, 16 the l>rescnt CitS(,

¶837

130 Orrct' it is hckl that the VAT Act stood repealed u.itl'r

¶838

el-fur:t tl-,>in 0 r .07.2() 17 cr.cept for the limited categories of goocls specifie(l in s,.rbstitrrreri Enrn' 54 of List II, question of amenclins

¶839

¶840

the repealecl act ir) resl)ect of those goods by virtue of the Seconcl Amendment Ac1 u'otrlcl not arise

¶841

r31 Thor-rgh there is no challenge to the Orclinancc, nonethelcss \'c rna: also examine the same since it is thc contention of the State that the Ordinarce was promulgatecl during the rr indolt' period ald the subsequent Seconcl Amenclmcnt .Act is given eflect to from the date of promulg:irnation of thc Orrlin;in(^('. thercl)' making it a valid piece of legislation

¶842

132 il siis stronglv argued by learned Advocate^(leneral that s ht'rr llrc^()rriinarnce rvas promulgated, State of Telnnganrr had thc leqislat ivc competence to SO promulgate the Orclin:rncc ancl tlrt' Sccorrcl Anrendment Act which was made subseqr:entlv uzis nothirrq lrrrt :,r r'ontinuation of the law as promulgatcd b-r rrav of^(Jrrlinanc e since it was ven effect to from the date ol promr-rlgamat ion of thc Ordinance.

¶843

'l'o appreciate the above contention, we ma-'note thelt thc CrrnstitLrtion Anrendment Act came into force on ancl l'ront 1t:).O{.1.^.)0 ii,. St'ctior-r 19 of the Constitution Amenclme nt Act proviclccl lor a u-irtdorr' period to the States to remove .in\ in(:()nsist(,,1 cpir(.t1tents lt-r,^q,ay of amendment or rctpeill rtr rrntil ('xl)lr:itiorr of orrt' -'(rar from snch commencement s hichcver ri.ars

¶844

r00

¶845

earlier. Telangana Ordinance No.2 of 2O l7 rvas promulgated by the Governor ol Telangana on 17.06.2017 to further arnend the VAT Act. Though the Ordinance was promulgaterl after coming ir-rto forcr: of the Constitution Amendment Act on 16.09.20I6, it \'AS SO pronrulgated within the windor,v period of one vear as provided by Section 19 of the Constitutior-r Amendment Act. At tl'ris stage we may mention that follow'ing t he Cor-rstitution Ame ndmr:r-rt Act, State of Telangana enacted t l-tt: TGST Act u'itl-r eflect frorn 01.O7 .20L7.

¶846

l.)_r Before we deal with the Telangana^()rciinalrce No.2 o[ 20 l 7. u't' mav note that power of the Co",erlr()r to protnulgate orclinirnc: is traceable to Article 213 of the Constitution ol' lndia Ar-ticlc 2 3 provides as follows:

¶847

n273. Power o,f GorJgn@r to promulgqte Ordinances during recess of Ieglsldture. (1) If at ang time, except uhen tle L"gislatit<1 A-s-s.nrbir/ of o Slnte^i.s rr sc.s-s,orl, or tuhere there is o Legislatiue Councrl in o Slnte, t'{.('l)l 1t'11.'tt bollt ltoLtst.s of the Legislature are in sessiort, tlut ortuerttot rs satr-\ladi tllrtl (:ircrlrrs lelrces eist uthich render it necessary Jbr hi',l to lek. tntmedrctte a( arrrl. it{' rrntl prt,trtulrlate such Ordinances as the circumslonc?s olrp('tu 1o lti,,L l|t rt'rytirc Drovicled that the Gouemor shall nol, witltottl u].Strtrcttori-s /rorf r ril(' l)rcsti/.',ir. prornulgote ang such Ordinance if-

¶848

(a) a Bill containing the same prouision.s utorttd und<:r th..s C()nstutrttron lwua required the preuious soncrlon of tlrc Presrcltr,t for llr: ittlro(lttchott thereof into the legislature; or

¶849

(b) he would haue deetnecl it trccess,.j.tll to ,1's.r14' Q Rtll^{(ottitlutitttt} tl'! sunLe prouisiorts for the consideratiotl of tlrc'. Prcstdettl: )r

¶850

(c) an ,qd of the Legislature of l.lrc Strlle c<ttLt<rirtirtg tltr' -srtnte /'rllt.siorrs t,'ortkl tutder this Conslituriolt ltttt'e |rc.<'rt int,alitJ rrrtle-s-s. httrturl ltt'trt raservetl frtr the consideration of th<, Presidt'nt. tl ltatl rect'irttl lir{^(1-ss.,rl()/ I/re I)r'r -sirlrnt.

¶851

lll Atr^{()rtlutcutcepromulgated} utuler tlis Qni(lt ':lLrtll^{ltLtte l]rc stttt.. la.(' i1lt.l} .'/i.ct r -s ar: Act of tlrc legislature ofthe Slale.i-ss.,rl(1/ lo lty llrt'^(;ottl n1ot lntt t't','t^tt sirc/r Orrirn,rnr:e

¶852

I0t

¶853

(a) shall be laid before the Legisltttiue As,scDri.rl-r7 o/'4,,r€, .Sr(le. or trlrera tlere i.s tr l,egi.slolire Counctl in the State, be.fore both t,lre //orrsc,s, ctrrd shall cease lo operote ot the exptration of six ueeks frorn the rt nsserrrblrl of tlte Lcqrslature, or r[ beJore the expirotion of that peiocl a r?solul[o\ rfusrq\tnttrrvl rt r,.^ p(-sse(i b]/ llrc l,egislatiue Assemblg and agreed to by tle Le,llslutrt,e Cortrtt'rl. if turg, rtpon tlte pe-ssing of the resolution or, as llrc cese it(tll lt<'. cnt tlu, resolututn lrcitq eqreed to by the Council; and

¶854

(b) mag be withdranun at anA time bg llte Gouernor

¶855

ExplanuliotL-Where the Houses of tlle Leqisknrtrc of o Slete l(tuurg o Legislatiue Council are summoned to reassentble on dtlf"ft'nf clrrle-s, t/tt' ltcnod of sLr ri,ecls shall be reckoned from the later of those dotes Jitr tlv:^ptLrposes of r,it i-s clrrrrse.

¶856

(3) ( and so far as an Ordinance under this orTit:le rnttkes cnrrl proulsiort rohiclr u'ortld ttot be ualid if enacted in an Act of the Lelttslettte ol tlt(, Slete essenfe(l to bq tlte^(;ouernor, it shatl be void:

¶857

Prourded that, for the purposes of the proulsiorts of llrs^{( (,I.slrlr],t(,t} |t'!.ttotq lo tl*' effect of an Act of the Legi"slature oJ'o Stote tt,/rtc/t rs rc!)u(lrenl 1., dn Act of Potliatrcnt or on existing lau-t u-tith respect to e nrctttet arutrtterrdctl tt tlu"^('oncurrent List, art Ordinance promulgated under this afticle ut 1)t1r.sr/11,1(!' ol tttsln,cliurs liotrt tlrc Pre.sident shall be deemed. to be an Act of tle l-eryslctlrtrt' o/ Ilr' .St.rl.' tr,/iic/t ,lta.s lte'ttL reserued for the considerqtion oJ the Presrtlerrl arr r,l rr.ss.'rr irrl io^{1tt1 lntr} r.^'

¶858

13.5 While clause (l) provides that il- tlre Ciovernor rs

¶859

satisfied u,hen the Legislative Assembl-r' of a St.ilr rs Ir,^rt irt scssion or \'here there is a Legislative Council in a Stiile . tht' sarne is I-tot in se'ssion. that circumstances exist ri l-ric'h⁽ all for irnme diate 11( tion, he may promulgate such Ordinancc. Clirttst' {2) clarifies thet an Ordinance so promulgated undt'r- Articlc 213 ol the Constitution shal1 have the same lorce ancl r'fl'r'r:t ;ts iur Act of the l-cr,.is1irt i: re of the State assented to b.r. tlrt'^(lovelrror'. I{orvever, r'('r\ sLlch Ordinance shall be lzrid bcfor,' tlrc I-cgis1:rtr-rrc and shilll ccase to operate at the expiration of sis it ec'ks lrom the r('irss('mbh of the Legislature. Clatrse 1.1) s;r!s tltat if an ()r rlj;ran<:e makes any provision \'lticlr \ ()Lrl(l rtol ltt' r'alicl if

¶860

1{)l

¶861

enacted a:i ar-l Act of the Legislaturc .rssented to by the Governor, it shall be void.

¶862

136 As noticed above, the Ordinance was promulgated by the Governor on 77.06.2O17, As per preamble to the Ordinance, it is stated that Government of lndia had enacted the CGST Act and Government of Telangala had enacted the TGST Act. But both the Acts had not beer.r brought into force. Referring to the provisionr; of the VAT Act, it is stated that it empowers the State Govbrnm,rEt to levy tax on alcolrolic liquor for human consumption and on petrolcunr products. According to the Constitution Amendment Act. ler.w of tax on those petroleum products and alcoholic liquor for h lrman consumption is within the coml>etence of the Stzrte Lcgislature. It further stated that repeal of the VAT Act excel)t in respect of the goods included in Entry 54 of List il of the VII Schedulc bl the TCST Act, which was yet to br: brought into lorce. u'oLrld nol affect any investigation, inqurry, verification (including scrutiny and auclit), assessment proceedirgs, adjudication alci irn.r' otl-rcr legal proceedings or recovery of arrears or remt dv in respect ol any such tax; surchargle, penalt.', flnr'. nrrrrcst, righr. privilege, obligation, liability, forfeiture or plrrIisIrrrrt,rrI ancl artv such irrrrestigation etc.,

¶863

I 1)-l

¶864

may be instituted, continucd or enforcccl and an-v such tax, surcharge etc, ma,v be lcviecl or imposccl irs if those Acts had not been so amended or repealecl. Such rt'pcal n'ould not also affect any proceedings inclucling th()sc rclating to appeal, revision, review or reference institLlted bcfon'. orr or after the appointed day under the said amcndcd Acts or repr-:rlc'd Acts and such proceedings shall be continucd unclt'r the amended Acts or repealed Acts. Therefbre, it uas considered necessary to strengthen certain provisions ol tlre VAT Act to overcome any limitations to help effcctivc rc'cnLi(' rt':rliz;tLion. Therefore, it was decided to amend certain 1>rovisions of Lhe VAT Act by undertaking a legislation. Sincc it^,.r rrs rlcciclecl to give effect to such decision immecliatcir. :rn<l .rs th(' Ltgislature of Telangana was not in session, tltcrr'lbrt'. tlre^(ior. t'r'not-. in exercise of powers conferred- by Clause^(l ) of .{rt'icle I1.3 of the eorrstihrtiorr' promulgated the C)rdinance rvlrich b:rsicallv extended the limitation from fotrr -'e.frs t() sir t t'lrr s in rtspect of assessments, reassessments, re'rsr()i1^('l c

¶865

1 4.7 It is r-rot r)ec(,ssar-' fi>t' Lts t,r^go into the aspect as to u,hether the OrdirrerncL. \'as larcl br'fr,rr rlt, .'\ssemblv or not and as to u,hether it ]-l.r d cc'asccl to op( r iit( .rlt cr six seeks from

¶866

I0{

¶867

reassembly ol the Lcgislature. It may also not be necessarl' for us to labour on thc aspect that the Second Amendment Act though published in the^'lelangana Gazette on 02.12.2017, was deemed to have corne into lorce r.r,ith effect from 17.06.2017 i.e. the date when tl-re^()rrlinance rvas promulgated. This is because lcgislative competence cannot flor,r.' from an earlier legislation, be it an ordinancr^()r ,1ll enactment. Legislative competence must be traceable to lhrr Corrstitution. Therefore, no reliance can be pla<:ed or r l lrc^()r <linzrnct' rn support of the contention that the Second \nrendment Act had derived cornpetence from the Ordinancc sin, r' il t lrs lr continuation of the law ald had comc into for-c,: lrorrr thc rlzrtc of promulgamation of the Ordinancc. Such a linc oi rcasorrinq. lrl our considered vierv, has no legal substalce. l-he rcforc. rt is immaterial that the Ordinance ,\ras not challcngt d in^(l;tr rI

¶868

138 l'h;rt .il)alrl . tlrt' ostensible objective of the Ordinancc as coul(l be disccrned from the preamble is to save any lnvestteir t1o I l . r sscssn l^('1l l rcco:ery of dues, legal proceedings ctc.. pending on tfrc <lat<' oi conring into force of the Constitution Amenclrr elrt Act u irrcir ts perfectly understandable and valici. Rut tl-ritt docs not nte iut rlrat lintitation across the board coulc.l bc

¶869

I05

¶870

cxtended bv s.av ol amendment to initiate fresh proceedings, such as, fresh revision procecdings, u,hich otherwise had become time barrecl.

¶871

139 Witl-r cffect from 16.O9.2016 the Constitution r,tas amenclecl bv lirtuc of thc Constitution Amendment Act. While Article 2.16A s'as inscrtcd immediately after Article 246, tl'rc carlier Entn 5-l oi List ll u,as substituted by the ne,,r, Entry 5'1, in the process dcr-rucling tl-re States from making any law except on the salc' of pt:troiertnr crude, high speed diesei, motor spirit (petrol), naltrral o.irs, :rriation turbine fuel and alcoholic liquor lirr' human corr srr rn 1;tion. Thus the States did not har.e tl-re conlpetencc t<.r mzrkt' lerrr' to levy VAT or such tax o1 2n1r goods othcr th.r1 the irbove goods. Section 19 of the Constitution Amenclnrc'nt Ac t. u hicir can be construed to be a sunset clause. proviclecl lor a u inclou' of one ],ear to remove the laws inconsiste nt u itl-r the Constrtr,rtior-r Amendment Act either by wav of' amenclrncnt or bv s'irv of repeal. The windoll' period w'as given to rcmo'(' thc ir-r <'o r-r sis tencies; not to prolong the inconsistencies Brrt u hirt tl-ie State of Tclangana did by promulgating the Orclinance \':1s nol to remove the inconsistencies in thc VA]'Act. As rnt'ntiorrrcl a1.rr.r','c, tire Ordin:rnce, 111 lact, introduced ce r',.r rin

¶872

106

¶873

provisioDs extending iimitation to enable initiation of lresh proccedinlls, such as, revisional proceedings rvhich a].e compietel-v inconsistent rvith the scheme of the Constitution Amendmer-rt Act. On this gr ound itself, the Ordinance carr be said to havc no legal corlse(luc r rce.

¶874

r40 Hollever, by the Second Amendment Act. more particularlv, by Section 7 thereof, the Ordinar-rce s':rs rep<ralc.d. As alrcacl.l' st ated above, the Second Amendment Act clrnnot dcrivc Iegislativr: competence from the Ordinance. It mrrst derive legislzrtive coml)etence from the Constitution. Unlortunatell'. after substitutron of Entry 54 of List II, State u'as denuclcci of suc--h comp('tence traceable to Article 246. As a stancl aronc lcsislation, it r:anno deril.e legitimacy traceable to Artick:^')46A ol' tlre Constitution as u,e11. Therefore, the Second Amencrrent Act ntacle <rrr 02.12.2(J17 though given retrospective eflect from 17.0(r.2017 *.mnot le sustained as the sa-rne is der'<licl of legisl:rtir.e compete r lce.

¶875

l4l Neediess to say, ivay back in 1964, Supremc Court in A.Hajee Abdul Shukoor (1 supraf vras categorica-l in holding that shile tl-rt'State Legislature is free to enact iar,vs which coulrl harc retrospcr:tive operation, its competence to make :r l;lv for a cerl:ritr

¶876

107

¶877

l egisiattve past period^{wou1d,however' dePendon its} present of time^nheu ancl not^{on what it possessed at the period} po\'er the^{enactmentwould be in operation'}

¶878

142 Insofar^{the decisionsrelied upon b"' the learned} Advocate^{General are concerned'we havealreaclv discussed shY} those^{u,ould not be applicable tothe facts and gror-tnds of} chalienge^{made in this bunchof writ petitions'}

¶879

143 FinaIIy^{we may also look into the intentior-rof the} Pariiament^{in enactingthe Constitution Amenclmerlt Acl' Thisis} bccause it^{would give us a clear idea as to u'hv the t'onstrttttion} Amendment Act^{was brought about and u'h1 1l're Sccond} Amenclment Act cannot^{besustainedbeirlgcomplctelv} inconsisten+, with the scheme^{of the ConstitutionAmendment Act} and being demrded*of.its-legislative competence. ln Baiju A.A. {1O^supraf ,^{Kerala High Court held as fol1ou's:}

¶880

There is yet alother aspect of the ma cr. it is tr ile that ,.r hen a Court judges the constitutionality ol a lcgislati\ c en.i( llnullI rt should try to sustain the validity of thc en:rctrnt)nt tl) tltc r,\tcnt possiblc ald it should strike dox,rr the lau. oniv t,hcrr it is irlpossible to sustain it, State of Bihar r.. llihar Distrllt,rv INIANU/^sc/0354 / 1997 : JT (1996) 10 sc 8s.+1. Ar rh. samc ri.r.. Llre'.. courr must proceed to deterrninc trrc i.rcnti.. .i trrt, P:rrliamcnt, not only from the languagc usccl in rhr. :iLi:rltrte but also irorn surrounding circumstarces and an trncler-sr trrr < ii,s .I tht: rnischief that was sought to be remediccl bv tlr(] stalutc_ \,hrn on. .ipl,lr,'s lhc said test to the evenls thrr ror,k l,l.r,, ,,rtr J rl,, r .t \ ,lC 16. it czrnnot but be noticed that the ,..,,-r- p,,r1rur" o j ihc CA.\ t.as r() i)rirrq itbout a change in the s1,s16p ui in.ii.",.i ,"r,,iirr',,, ,,,,,

¶881

¶882

r08

¶883

:ountry^{thrr.rugh the} inr rne plrasing our of r he '11.Y::":^of a Goods and sen-icc Tax, ar.rd HT,i[{;iii,#i;i,tlif^:ji,::,,Jfr uy rhe J",=";"ri.a?.,cenfe ard rn the said enactmerr .,.h."^{coozo ro.} r,i.r,.il systerr. of taxation r,r. - l"t"u"d. tr," .l",i""",i.ffi :i:"::":ff;: enactrrent of the CAA .,-u .ffto',^{of one year} lrom thc date of amended .;-.;;;; d:.tlll such time as the State Legislarures was ee rlier. when the .-1." .^ttsPectit "^{VAT lcgislat} ions. rvhichever m. i,,:l.tiy[ ::$[^{:iff ?]i: ff::i":: jij..jti} f :i: actnowrealla ;i; #""..^rf ^.limited^{operationrtelfeclivety} trre suu;ecToi t;;";"":i,fl il,::'#;i:.,""."""J::;,,1"::$::, T under the limited the Constitution. commoditics ht ro. rcspecl ,ur,;.t^"it-" of ail :;";J; othcr commoclities, r.vas retainedthe Iegislati.ze pou.er of thc State. rvas only in respect of taxes on the supply of goods or senices or both. o pi,o:". i;;Ijr;.l" be exercised simultatreously with the parli;unent ,_J ..,"rriltrterally or exclusiv,:ly. Thus, at rhe -^{rirnc of ..,p.,J-or- ii}XVaf Act, and 'simultanreous,enactmen r of rhc srare i.si a"i Jti ,'"..nrrg" "t.o". jlT.l::. saylnSs ciausc operare<t onty ro sar,,c rights, pnviieges, rmmurutles, action taken etc under the erstuhile elnactment as it stood at the time of its repeal, rvhich included the arnendments brought in through the Kerala Finarce Act. 2017. There could not have- been any further lcgislati.c e_\iercisc bv tllc Sitatc legislature in relation to tle repcaled Ii\ AT ,\cr.

¶884

144 !y'e are in respcctfui agreement^'s.ith the views

¶885

expressed by the Kerala High Court in Baiju A.A {1O supraf. Intention of Parliament in ushering in^{the GSTregime through the} constitution Amendment^{Act and cnactmentof the GGST Act and} simultaneous^{enactment oi various Slate CST Acts by the State} Legislatures is to^{avoid multiplicit-r' of taxes by subsuming thoS€} indirecttaxt,sinasinglera-rc;r]ledGST.Itisir-rthiscontextwe have analyz^{ed Section 19 of the ConstttutronAmendmentAct.} Viewed^{thus theameudtnetltsllrought} 1n b5.' the^Second Amendmenl^{Act, as disclrssedzrbotc , are r'r-hollf inconsistent with}

¶886

109

¶887

the scheme of the Constitution Amendment Act read with the CGST Act and the TGST Act.

¶888

145 Thus, upon thorough consideration of all aspects of the matter, u,e have no hesitation in holding that the Second Amendment Act is unconstitutional being devoid of legislative competence. It is accordingly declared as such. Consequently,^the notices issued and orders passed under Section 32⁽³⁾ of the^VAT Act which have been impugned in the present batch of writ petitions are hereby set aside and quashed.

¶889

146 Al1 the writ petitions are accordingly allowed. However, there shall be no order as to costs.

¶890

147 Miscellaneous petitions, if any, pending in all the writ petitions, shall stand closed.

¶891

UJJAL BHIryAN, CJ

¶892

SMT. JUSTICE P.MADHAVI DEVI

¶893

Date:05- 07-2022. Kusn$rks/Pln

¶894

Note: LR copy be marked (By order) pln

M/s.Tirumala Constructions v. The Commercial Tax Officer

Case brief

What is this about?

What did the court decide?

M/s.Tirumala Constructions v. The Commercial Tax Officer

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

The State of Ts.,Genl.Admn.,Hyderabad, and 3 Otrs. Vs Smt. v. Chinnaji, Hyderabad, and 4 Otrs.

Maddela Kishtaia and another Vs Bekkanti Devaiah and 5 others

Mr.Ramesh Panthakani Vs The Commissioner of Central Tax

M/s.Salora International Limited, Vs The Assistant Commissioner (Ct)

Divi Satya Sayee Babu Vs The State of Telangana

Secy, Ministry of Mines, New Delhi Vs N. Swadesa Rao, Hyd and 3 Ot