Saving clause for pre-GST liabilities upheld; no vested right prevents reopening of past assessments under the Kerala GST law.

Section 174(2) of the Kerala State Goods and Services Tax Act, 2017 was examined as a saving and repeal provision preserving pre-GST liabilities and authorising action in respect of past periods. The provision was held not to be ultra vires the State Legislature's competence and not contrary to Section 19 of the Constitution (One Hundred and First Amendment) Act, 2016. It was also held that the provision does not confer any vested or accrued right on dealers to resist reopening of assessments for liabilities arising before 16.09.2016. The legal challenge to reopening pre-GST liabilities therefore failed, and the connected writ appeals were dismissed.

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Issues: (i) Whether Section 174(2) of the Kerala State Goods and Services Tax Act, 2017 is ultra vires the legislative competence of the State Legislature and contrary to Section 19 of the Constitution (One Hundred and First Amendment) Act, 2016; (ii) whether Section 174(2) of the Kerala State Goods and Services Tax Act, 2017 confers any vested or accrued right to proceed to reopen assessments for enforcing liabilities arising before 16.09.2016.

Issue (i): Whether Section 174(2) of the Kerala State Goods and Services Tax Act, 2017 is ultra vires the legislative competence of the State Legislature and contrary to Section 19 of the Constitution (One Hundred and First Amendment) Act, 2016.

Analysis: The challenge concerned the saving and repeal provision preserving prior liabilities and enabling action in respect of past periods. The formulation of the question required examination of the competence of the State Legislature to enact such a saving clause and its consistency with the constitutional amendment relied on by the appellants. The issue was answered on merits against the dealers.

Conclusion: The provision was held not to be ultra vires and not contrary to Section 19 of the Constitution (One Hundred and First Amendment) Act, 2016.

Issue (ii): Whether Section 174(2) of the Kerala State Goods and Services Tax Act, 2017 confers any vested or accrued right to proceed to reopen assessments for enforcing liabilities arising before 16.09.2016.

Analysis: The question was whether the saving provision created a substantive right in favour of dealers or merely preserved the authority to act in relation to antecedent liabilities. The Court answered the question after adopting the reasoning recorded in the connected judgment and concluded that no such vested or accrued right survived in favour of the dealers.

Conclusion: The question was answered against the dealers and in favour of the Revenue.

Final Conclusion: The legal challenge to the reopening of pre-GST liabilities failed, and the connected writ appeals were dismissed.

Ratio Decidendi: A saving provision preserving pre-existing liabilities and enabling assessment-related ions for prior periods is valid if enacted within legislative competence and does not create a vested or accrued right in favour of the dealer to resist reopening.

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