Constitutional validity of GST pre-deposit amendments fails as notices demanding the deposit are quashed.

The Bombay High Court held that the validating amendments inserting and enforcing a 10% pre-deposit requirement under Section 26(6A), (6B) and (6C) were constitutionally unsustainable because, after the GST regime came into force, the State lacked legislative competence to sustain the amendment in the manner attempted. Although retrospective curative legislation is permissible in principle, it cannot revive a provision once the underlying legislative authority has been displaced. As the Supreme Court had struck down the validating foundation, the basis for demanding the 10% pre-deposit disappeared and the consequential notices could not survive; the challenge succeeded and the notices were quashed.

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Issues: Whether the amendments inserting and validating the 10% pre-deposit requirement under Section 26(6A), (6B) and (6C) were constitutionally valid and whether the notices demanding such pre-deposit could survive.

Analysis: The impugned amendments were enacted after the GST regime had come into force, when the State had ceased to have legislative competence over the subject-matter in the manner sought to be exercised. Although curative legislation with retrospective effect is competent in principle, it cannot sustain an amendment once the underlying legislative authority has been displaced. The consequence of the Supreme Court's ruling striking down the validating amendments was that the foundation for insisting on the 10% pre-deposit disappeared, and notices issued on that basis could not stand.

Conclusion: The challenge to the amended pre-deposit provisions succeeds, and the consequential notices demanding such pre-deposit are quashed and set aside.

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