GST legislative competence upheld as inclusive definition of supply can validly cover sale under the Constitution.

Article 246A, read with Article 366(12A), empowers Parliament and State Legislatures to enact GST laws, and Section 7 of the CGST Act and the corresponding U.P. GST provision were upheld as within legislative competence; the constitutional challenge therefore failed. The inclusive definition of "supply" was treated as validly covering sale, so the argument that sale could not fall within GST was rejected. On natural justice, the assessment was sustained because the record showed supply of documents, inspection access, notices fixing hearing, and consideration of a detailed reply before the order was made; the writ interference was declined and the petitioner was left to pursue the statutory appeal.

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Issues: (i) Whether Section 7 of the Central Goods and Services Tax Act, 2017 and the corresponding provision in the U.P. Goods and Services Tax Act, 2017 were ultra vires for want of legislative competence, and whether the expression "supply" could include sale; (ii) whether the impugned assessment order was vitiated for breach of natural justice and denial of opportunity of hearing.

Issue (i): Whether Section 7 of the Central Goods and Services Tax Act, 2017 and the corresponding provision in the U.P. Goods and Services Tax Act, 2017 were ultra vires for want of legislative competence, and whether the expression "supply" could include sale.

Analysis: Article 246-A, read with Article 366(12A) of the Constitution of India, confers power on Parliament and the State Legislatures to make laws with respect to goods and services tax. The constitutional scheme introduced by the 101st Amendment, together with the Statement of Objects and Reasons, shows that GST was intended to subsume multiple indirect taxes and to operate as a comprehensive levy on supply of goods or services or both. Section 7 uses an inclusive definition of "supply" and expressly includes sale. The constitutional challenge failed because the enactments were within legislative competence and the presumption of constitutionality operated in favour of validity.

Conclusion: The challenge to Section 7 of the CGST Act and the UPGST Act was rejected. The provision was held to be valid and within legislative competence, and the plea that "supply" could not include sale was negatived.

Issue (ii): Whether the impugned assessment order was vitiated for breach of natural justice and denial of opportunity of hearing.

Analysis: The record showed that the petitioner was furnished relied upon documents, permitted to inspect the records, issued notices fixing date, time and place of appearance, and had submitted a detailed reply that was considered before passing the order. The availability of an appellate remedy under Section 107 of the U.P. Goods and Services Tax Act, 2017 was also noted.

Conclusion: The allegation of breach of natural justice was rejected, and the assessment order was not interfered with.

Final Conclusion: The writ petition failed on merits, and the petitioner was left to pursue the statutory appeal against the assessment order, if so advised.

Ratio Decidendi: Under Article 246-A of the Constitution of India, Parliament and the State Legislatures have competence to enact GST legislation on supply of goods or services or both, and an inclusive statutory definition may validly bring sale within the scope of supply; a constitutional challenge to such legislation must overcome the presumption of validity and establish clear lack of competence or violation of constitutional rights.

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