Goa VAT Amendment Act 2020 Ruled Unconstitutional for Overstepping Legislative Boundaries and Violating Separation of Powers.

The Court declared the Goa Value Added Tax (12th Amendment) Act, 2020, unconstitutional, citing impermissible legislative override and violation of the separation of powers doctrine. It found the Amendment Act ultra vires, as it attempted to amend a repealed statute without revival and deprived petitioners of vested constitutional rights retrospectively. The Court ordered the respondents to implement prior judicial decisions within four weeks and deposit the due amounts with interest. Petitioners were permitted to withdraw these amounts upon providing bank details.

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Issues Involved:
1. Impermissible Legislative Override
2. Amendment to a Repealed/Lapsed Statute Without Its Revival
3. Legislative Competence
4. Manifest Arbitrariness
5. Deprivation of Vested Constitutional Rights with Retrospective Effect

Summary:

Impermissible Legislative Override:

The petitioners challenged the non-implementation of the Court's decisions due to the Goa Value Added Tax (12th Amendment) Act, 2020. They argued that the Amendment Act was an impermissible legislative override and violated the doctrine of separation of powers. The Court found that the Amendment Act did not remove the fundamental bases of the judicial decisions and was an attempt to legislatively overrule binding judicial decisions. The Hon'ble Supreme Court's principles in Shri Prithvi Cotton Mills Ltd. and other cases were applied, concluding that the Amendment Act was unconstitutional and breached the separation of powers doctrine.

Amendment to a Repealed/Lapsed Statute Without Its Revival:

The Court noted that the GVAT Act, 2005, was repealed by the Goa GST Act, 2017, except for goods in Entry 54 of the State List. The impugned Amendment Act of 2020 attempted to amend the repealed GVAT Act without reviving it. The Court referred to decisions of the Gujarat and Telangana High Courts, which held that a repealed law could not be amended without revival. Therefore, the Amendment Act was prima facie ultra vires and void concerning goods not included in Entry 54.

Legislative Competence:

The petitioners argued that post the Constitution (101st Amendment) Act, 2016, the State Legislature lacked competence to amend the GVAT Act concerning goods not included in Entry 54. The Court noted that several High Courts had held that State Legislatures lost competence to tax goods other than the specified six in Entry 54. The petitioners had an arguable case based on legislative competence, though this ground was not available to all petitioners.

Manifest Arbitrariness:

The Court found that the State's contention that interest on excess tax refunds would only become payable from the 91st day of the sanction order, without a time limit for issuing such orders, was arbitrary and unreasonable. This provision allowed the State to retain excess tax indefinitely without liability for interest, which was contrary to the principles laid down by the Hon'ble Supreme Court in cases like Union of India V/s. Tata Chemicals Ltd.

Deprivation of Vested Constitutional Rights with Retrospective Effect:

The Court held that the impugned Amendment Act, by giving retrospective effect, deprived the petitioners of their vested rights to interest on excess tax refunds. The right to receive interest was not merely statutory but also constitutional under Articles 14, 265, and 300-A of the Constitution. The retrospective effect of the Amendment Act was liable to be interfered with as it took away vested constitutional rights.

Conclusions and Relief:

The Court concluded that the impugned Amendment Act was an impermissible judicial override and unconstitutional. The respondents were directed to implement the judicial decisions in the earlier writ petitions within four weeks and deposit the amounts with interest in the Court. The petitioners were allowed to withdraw the amounts after furnishing bank details.

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