Legislative competence for online purchase levy questioned, with interim protection granted subject to bank guarantee.

A levy introduced on goods purchased through online platforms was challenged as being beyond the State's legislative competence after the constitutional amendment and omission of Entry 52 of List II. On a prima facie assessment, the saving clause was treated as insufficient to authorise a new tax burden where the source of power had been extinguished, leaving the impugned provisions constitutionally vulnerable. Pending the writ petition, the Court granted interim protection, balancing the prima facie competence issue against revenue concerns by allowing online transactions to continue subject to a bank guarantee.

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Issues: (i) whether the amendment inserting the levy on goods brought through online purchase or e-commerce was, prima facie, beyond the legislative competence of the State in view of the constitutional amendment and the omission of Entry 52 of List II; (ii) whether an interim restraint was warranted pending the writ petition.

Issue (i): whether the amendment inserting the levy on goods brought through online purchase or e-commerce was, prima facie, beyond the legislative competence of the State in view of the constitutional amendment and the omission of Entry 52 of List II.

Analysis: The challenged amendment was viewed as introducing a fresh levy not already existing under the earlier regime. On a prima facie assessment, the saving clause in the constitutional amendment was held not to authorise introduction of a new tax burden through the impugned notification and amendment, particularly where the source of legislative power had been extinguished.

Conclusion: The impugned provisions were held to be, prima facie, beyond legislative competence and constitutionally vulnerable.

Issue (ii): whether an interim restraint was warranted pending the writ petition.

Analysis: In view of the prima facie conclusion on competence and the need to protect the revenue interest of the State, the Court found the case fit for interim protection. It balanced the competing interests by permitting the petitioner to continue transactions through e-commerce and online purchase against security in the form of a bank guarantee.

Conclusion: Interim relief was granted in favour of the petitioner on furnishing bank guarantee to the satisfaction of the authorities.

Final Conclusion: The order granted only interim protection and preserved the writ petition for further consideration on merits.

Ratio Decidendi: Where a newly introduced fiscal levy appears, on a prima facie reading, to travel beyond the surviving legislative field after a constitutional amendment, interim relief may be granted to preserve the subject matter, balanced by adequate security for the revenue.

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