2019 (10) TMI 1200 - HC - VAT and Sales Tax

High Court defers action on tax law petitions pending Larger Bench decision on legislative competence

The High Court deferred action on petitions pending a Larger Bench's response on legislative competence regarding tax laws in Maharashtra, specifically on ... Non-compliance with pre-deposit - Section 26 (6B)(c) of the Maharashtra Value Added Tax Act, 2002 - retrospective effect of amendment - HELD THAT:- The Registry is directed to place papers and proceedings of the present two writ petitions before the learned Chief Justice to obtain suitable directions to place the following questions of law for the opinion of the Larger Bench of this Court. The petitions placed on board after the reference is answered by the Larger Bench. Issues involved:1. Legislative competence to enact tax laws with mandatory pre-deposit for appeals post-2016.2. Impact of Explanation to section 26 of MVAT Act on right to file appeals without deposit.3. Validity of Division Bench decision on mandatory pre-deposit for appeals pre-2017.Analysis:1. The High Court directed the Registry to refer questions of law to the Larger Bench regarding the legislative competence of the State of Maharashtra to enact the Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2017 and the Maharashtra Tax Laws (Amendment and Validation) Act, 2019. The key issue is whether these Acts, amending the Maharashtra Value Added Tax Act, 2002 to introduce mandatory pre-deposit for appeals against assessment orders post-2016, fall within the state's legislative competence.2. The Court raised a question on the impact of the Explanation to section 26 of the MVAT Act, introduced by the Maharashtra Tax Laws (Amendment and Validation) Act, 2019. This Explanation, effective from April 15, 2017, potentially affects the right of an assessee to file an appeal without a statutory deposit for assessment orders predating April 2017. The Court aims to determine whether this Explanation nullifies a previous Division Bench decision and its implications on the right to appeal without deposit.3. Another issue pertains to the correctness of the Division Bench decision in the case of Anshul Impex Pvt. Ltd. v. State of Maharashtra. The decision established that the right to file an appeal accrues on the date of the assessment order, suggesting that mandatory pre-deposit introduced post-April 2017 does not apply to assessment orders before that date. The Court seeks to assess whether this proposition is valid, considering the legislative power to impose conditions on the right to appeal and the need for a reevaluation of the Anshul Impex Pvt. Ltd. decision.The Court deferred further action on the petitions pending the Larger Bench's response to the questions referred for consideration. This comprehensive analysis outlines the intricate legal issues surrounding the legislative competence, statutory amendments impacting appeal procedures, and the validity of prior judicial decisions in the realm of tax laws in Maharashtra.