Retrospective limitation extension under old VAT law was struck down as beyond competence and constitutionally arbitrary.

Section 84A of the Gujarat Value Added Tax Act was examined for three core defects: post-GST legislative competence, constitutional reasonableness, and validity as a validating provision. The provision was treated as an attempt to extend retrospective limitation under the old VAT regime after the constitutional shift under Article 246A, rather than as a measure confined to the retained field of taxation. It was also considered to undermine certainty and finality by permitting reopening of concluded matters indefinitely, making it manifestly arbitrary and unreasonable. The provision was further held not to be a true validating enactment because it did not cure an existing defect but merely revived time-barred revision powers. The writ applications were allowed and the provision was struck down.

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Issues: (i) whether Section 84A of the Gujarat Value Added Tax Act, 2003 was beyond the legislative competence of the State after the Constitution (One Hundred and First Amendment) Act, 2016; (ii) whether Section 84A was manifestly arbitrary, unreasonable and violative of Articles 14 and 19(1)(g); and (iii) whether Section 84A was a valid validating provision permitting reopening of time-barred revision proceedings.

Issue (i): whether Section 84A of the Gujarat Value Added Tax Act, 2003 was beyond the legislative competence of the State after the Constitution (One Hundred and First Amendment) Act, 2016.

Analysis: The constitutional scheme introduced by Article 246A created a simultaneous power to legislate on goods and services tax, while the amended Entry 54 of List II retained only a narrow field for specified petroleum products. Section 84A, however, was not a provision dealing with GST or with the retained commodities. It sought to revive and extend the revisional period under the pre-GST VAT regime for all other goods by excluding time spent in litigation in other proceedings. That was treated as an attempt to create a fresh fiscal consequence under a field from which the State had been denuded, and not merely as an ancillary saving measure.

Conclusion: Section 84A was held to be beyond the legislative competence of the State and invalid.

Issue (ii): whether Section 84A was manifestly arbitrary, unreasonable and violative of Articles 14 and 19(1)(g).

Analysis: The provision exposed dealers to reopening of concluded assessments for an indefinite period depending on the progress and outcome of proceedings in other cases. The Court treated this as destroying certainty and finality in tax administration, creating an excessive and oppressive burden, and upsetting settled arrangements made on the basis of concluded assessments. In that sense, the provision failed the test of fairness and reasonableness and operated in a manner that was manifestly arbitrary.

Conclusion: Section 84A was held to be violative of Articles 14 and 19(1)(g).

Issue (iii): whether Section 84A was a valid validating provision permitting reopening of time-barred revision proceedings.

Analysis: A validating statute must remove the defect that caused invalidity and must itself be within legislative competence. Section 84A did not validate any levy or cure any defect in an existing levy; instead, it merely enlarged limitation retrospectively so as to reopen matters already closed by lapse of time. The Court held that this was not a true validating exercise and that the legislature could not indirectly achieve by limitation extension what it could not do directly after the constitutional change.

Conclusion: Section 84A was held not to be a validating Act.

Final Conclusion: The writ applications were allowed, Section 84A of the Gujarat Value Added Tax Act, 2003 was struck down, and the revision notices issued under Section 75 were quashed.

Ratio Decidendi: After the constitutional shift under the goods and services tax regime, the State could not use retrospective limitation enlargement under the old VAT law to create fresh liability or revive time-barred revision powers in a manner that was neither within legislative competence nor constitutionally reasonable.

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