2019 (4) TMI 1754 - SC - VAT and Sales Tax

Supreme Court Upholds Legislative Conditions on Right to Appeal in Tax Laws

The Supreme Court upheld the constitutionality of Section 48(4) of the Chhattisgarh VAT Act, 2005, emphasizing the legislature's authority to impose ... Vires of sub-section (4) to Section 48 of the Chhattisgarh VAT Act, 2005 - HELD THAT:- Since under the interim orders, the petitioner had paid a sum of ₹ 5 crores; the amount so deposited shall be taken into account while arriving at the figure that the petitioner ought to deposit - Petition dismissed. Issues:Challenge to the constitutionality of Section 48(4) of the Chhattisgarh VAT Act, 2005.Analysis:The petition sought a writ of mandamus declaring Section 48(4) of the Chhattisgarh VAT Act, 2005 as unconstitutional and ultra vires Articles 14, 19(1)(g), and 265 of the Constitution of India. The provision in question outlined conditions for admitting appeals, including the payment of a percentage of the total balance due from the dealer. The State argued for the validity of the provision citing a previous judgment regarding a similar provision in the Indian Stamp Act, 1899. The Supreme Court referred to the previous judgment and upheld the constitutionality of the provision, emphasizing that the right to appeal can be subject to conditions as decided by the legislature.The Court highlighted that the right to appeal is a statutory right that can be circumscribed by conditions set by the legislature. Various precedents were cited to support the notion that the right to appeal can be conditional or qualified. The Court reiterated that if the language of a taxing provision is clear, the court cannot delve into the legislative intention. It was emphasized that hardship is not a relevant factor in interpreting taxing statutes. The judgment underscored that the legislature has the authority to amend laws to ensure proper realization of stamp duty.Moreover, the Court addressed a hypothetical scenario involving an erroneous determination of property value and the exorbitant duty demanded as a result. It was clarified that parties have the recourse to challenge such demands through writ petitions if they are deemed arbitrary or based on extraneous considerations. The judgment concluded by dismissing the writ petition challenging the constitutionality of Section 48(4) of the Chhattisgarh VAT Act, 2005, noting that the amount already deposited by the petitioner under interim orders would be considered in the final calculation.In summary, the Supreme Court upheld the constitutionality of Section 48(4) of the Chhattisgarh VAT Act, 2005, based on precedents and legal principles governing statutory rights to appeal and taxation statutes. The judgment emphasized the legislative authority to impose conditions on the right to appeal and clarified the recourse available to parties facing arbitrary or exorbitant demands in such scenarios.