Section 26(6A) of Maharashtra VAT Act 2002 declared void following Supreme ruling on legislative competence

The Bombay HC declared Section 26(6A) of the Maharashtra Value Added Tax Act, 2002 void, following the SC's decision in State of Telangana v. Tirumala Constructions. The SC had ruled that amendments requiring pre-deposit in VAT appeals made after July 1, 2017 lacked legislative competence. The HC allowed petitioners to approach the Appellate Authority/Tribunal within four weeks, filing appeals with applications for delay condonation and pre-deposit waiver. The petition was disposed of accordingly.

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Issues Involved:
1. Constitutional validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002.
2. Legislative competence of the State Government to amend the law retrospectively.
3. Applicability of pre-deposit requirements to pre-2017 appeals and revisions.
4. Impact of the Supreme Court's decision in The State of Telangana & Ors. Vs. Tirumala Constructions.

Summary:

Issue 1: Constitutional Validity of Section 26(6A) of the Maharashtra Value Added Tax Act, 2002
The batch of petitions challenged the constitutional validity of Section 26(6A), inserted by Maharashtra Amendment Act 31 of 2017, which mandated a pre-deposit for filing appeals. The Court noted the provisions of sub-sections (6A), (6B), and (6C) which required a mandatory pre-deposit of 10% of the disputed tax liability for appeals.

Issue 2: Legislative Competence of the State Government to Amend the Law Retrospectively
The Court referred to the case of Anshul Impex Pvt. Limited Vs. State of Maharashtra, where it was held that the amendment was inapplicable to periods before the amendment. However, the State subsequently amended the 2002 Act through an ordinance and later by the Maharashtra Tax Laws (Amendment and Validation) Act 2019, clarifying that the provisions would apply irrespective of the period to which the order relates.

Issue 3: Applicability of Pre-Deposit Requirements to Pre-2017 Appeals and Revisions
The Full Bench of the Bombay High Court in United Projects Vs. State of Maharashtra upheld the State's legislative competence to retrospectively amend the law to require pre-deposit for appeals, even for periods before the amendment. The Supreme Court, however, in The State of Telangana & Ors. Vs. Tirumala Constructions, held that the Maharashtra legislature lacked competence to amend the VAT Act after 01.07.2017, rendering the amendments void.

Issue 4: Impact of the Supreme Court's Decision in The State of Telangana & Ors. Vs. Tirumala Constructions
The Supreme Court's decision set aside the Full Bench ruling of the Bombay High Court, declaring the amendments to the Maharashtra VAT Act void for want of legislative competence after the GST regime came into effect. Consequently, the pre-deposit requirements were invalidated.

Conclusion:
The petitions were disposed of, allowing the Petitioners to file their appeals along with applications for condonation of delay and waiver of pre-deposit within four weeks. The Appellate Authority/Tribunal was directed to consider these applications in accordance with the law. The Court also provided limited protection against demand notices for a period of four weeks to enable the Petitioners to approach the Tribunal/Appellate Authority. All contentions of the parties were expressly kept open.

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